In contrast to previous literature, which looks at the effect of democracy on long-run growth or short-run volatility of growth, the authors examine the effect of political institutions on medium-term growth episodes. These are episodes of accelerations and decelerations that characterise the growth experience of most developing countries. We find that the effect of political institutions on growth is asymmetric across accelerations and decelerations, and that democracies do not necessarily outperform autocracies in a growth acceleration episode, though they are likely to prevent large growth collapses. When the authors disaggregate the type of autocracy, they find that party-based autocracies outperform democracies in growth acceleration episodes, though they do not limit the fall in the magnitude in growth deceleration episodes in comparison to democracies.
This output was funded under the Effective States and Inclusive Development Research Centre programme
Sen, S., Pritchett, L., Kar, S. and Raihan, S. (2016) Democracy versus dictatorship? The political determinants of growth episodes. ESID working paper no. 70. Manchester: Effective States and Inclusive Development Research Centre, The University of Manchester, 50p
Published 8 December 2016