IN THIS week's Free exchange column, which has just been published, we consider a question that is much debated at cocktail parties around the world. Does democracy hold back growth? Much evidence seems to suggest that it does. After all:
GDP growth in [China] at an average of 10% over the past decade, has easily outpaced that of its democratic emerging-market rivals. India saw annual growth of 6% over the same period; Brazil, just 2%.
In other words: democracies grow slowly; non-democracies grow quickly.
We report on new research that challenges this perception. The paper uses a huge dataset (175 countries over fifty years) and makes a number of statistical improvements (that are explained in the column) and concludes that "democratisations" (ie, when a country becomes democratic) improves living standards substantially. As the piece notes:
They find that a “permanent” democratisation—where there is no slide back into...Continue reading
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