Working Paper: CEPR ID: DP4938
Authors: Torsten Persson
Abstract: 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.
Keywords: Democratic Institutions; Economic Performance; Growth-Promoting Policy
JEL Codes: F43; H11; O57
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| parliamentary democracy (D72) | better structural policies (H19) |
| parliamentary democracy (D72) | long-run productivity (O49) |
| proportional electoral systems (P50) | more growth-promoting policies (O25) |
| proportional democracy reforms (D72) | economic openness (F43) |
| age of democracy (D72) | better policies (D78) |
| age of democracy (D72) | economic performance (P17) |
| political institutions (D02) | current policies (J18) |
| political institutions (D02) | economic performance (P17) |