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Democracy and Economic Growth: A Meta‐Analysis
Author(s) -
Doucouliagos Hristos,
Ulubaşoğlu Mehmet Ali
Publication year - 2008
Publication title -
american journal of political science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 6.347
H-Index - 170
eISSN - 1540-5907
pISSN - 0092-5853
DOI - 10.1111/j.1540-5907.2007.00299.x
Subject(s) - democracy , economics , inflation (cosmology) , economic freedom , meta analysis , politics , political instability , human capital , estimator , regression analysis , econometrics , development economics , political science , economic growth , market economy , statistics , law , mathematics , medicine , physics , theoretical physics
Despite a sizeable theoretical and empirical literature, no firm conclusions have been drawn regarding the impact of political democracy on economic growth. This article challenges the consensus of an inconclusive relationship through a quantitative assessment of the democracy‐growth literature. It applies meta‐regression analysis to the population of 483 estimates derived from 84 studies on democracy and growth. Using traditional meta‐analysis estimators, the bootstrap, and Fixed and Random Effects meta‐regression models, it derives several robust conclusions. Taking all the available published evidence together, it concludes that democracy does not have a direct impact on economic growth. However, democracy has robust, significant, and positive indirect effects through higher human capital, lower inflation, lower political instability, and higher levels of economic freedom. Democracies may also be associated with larger governments and less free international trade. There also appear to be country‐ and region‐specific democracy‐growth effects. Overall, democracy's net effect on the economy does not seem to be detrimental.