The Inter-Linkages between Democracy and Per Capita GDP Growth: A Cross Country Analysis
Journal Title: Research Journal Social Sciences (Online) - Year 2015, Vol 4, Issue 2
Abstract
There exist many theoretical and empirical ambiguities relating to the relationship between democratic form of governing and economic growth. In this study we try to resolve this debate empirically. Our analysis supports those who take conflict view on democracy and GDP growth. It is found that democracy negatively and significantly affects per capita GDP in all countries group (when democracy is added linearly), not free and free countries categories and negatively though insignificantly in countries at moderate level of democracy. Also inverted U relationship between democracy and per capita GDP is verified which means that per capita GDP is increasing in democracies at low levels but after a certain moderate level of democracy this relation turns negative. No evidence for the reverse causation from per capita to democracy is found in this empirical exercise and hence the Lipset hypothesis that prosperity leads to democracy fails to hold in this study.
Authors and Affiliations
MADEEHA GOHAR QURESHI, EATZAZ AHMED
Keywords
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