DP4938 Forms of Democracy, Policy and Economic Development

Author(s): Torsten Persson
Publication Date: February 2005
Keyword(s): democratic institutions, economic performance, growth promoting policy
JEL(s): F43, H11, O57
Programme Areas: International Macroeconomics, Public Economics, Institutions and Economic Performance
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4938

The paper combines insights from the recent research programs on constitutions and economic policy, and on history, institutions and growth. Drawing on cross-sectional as well as panel data, it presents new empirical results showing that the form of democracy (rather than democracy vs. non-democracy) has important consequences for the adoption of structural polices that promote long-run economic performance. Reforms into parliamentary (as opposed to presidential), proportional (as opposed to majoritarian) and permanent (as opposed to temporary) democracy appear to produce the most growth-promoting policies.