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Volumn 27, Issue 3, 1997, Pages 391-418

Democracy, political stability and economic growth

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EID: 0031485933     PISSN: 00071234     EISSN: None     Source Type: Journal    
DOI: 10.1017/S0007123497000197     Document Type: Article
Times cited : (274)

References (147)
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    • This school of thought has been particularly favoured by some scholars in Latin American politics. For a review of variants of the argument that democracy has failed to achieve economic growth in Latin America, see Youssef Cohen, Radical Reformers and Reactionaries: The Prisoner's Dilemma and the Collapse of Democracy in Latin America (Chicago: The University of Chicago Press, 1994), pp. 23-32.
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    • For example, see Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library, 1937); F. A. Hayek, The Road to Serfdom (Chicago: The University of Chicago Press, 1944); Seymour M. Lipset, 'Some Social Requisites of Democracy: Economic Development and Political Development', American Political Science Review, 53 (1959), 69-105; Milton Friedman, 'Capitalism and Freedom', New Individualist Review, 1 (1961), 3-10; L. von Mises, Socialism: An Economic and Sociological Analysis (Indianapolis: Liberty Classics, 1981); and William H. Riker and David L. Weimer, 'The Economic and Political Liberalization of Socialism: The Fundamental Problem of Property Rights', Social Philosophy and Policy, 10 (1993), 79-102.
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    • For example, see Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library, 1937); F. A. Hayek, The Road to Serfdom (Chicago: The University of Chicago Press, 1944); Seymour M. Lipset, 'Some Social Requisites of Democracy: Economic Development and Political Development', American Political Science Review, 53 (1959), 69-105; Milton Friedman, 'Capitalism and Freedom', New Individualist Review, 1 (1961), 3-10; L. von Mises, Socialism: An Economic and Sociological Analysis (Indianapolis: Liberty Classics, 1981); and William H. Riker and David L. Weimer, 'The Economic and Political Liberalization of Socialism: The Fundamental Problem of Property Rights', Social Philosophy and Policy, 10 (1993), 79-102.
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    • For example, see Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library, 1937); F. A. Hayek, The Road to Serfdom (Chicago: The University of Chicago Press, 1944); Seymour M. Lipset, 'Some Social Requisites of Democracy: Economic Development and Political Development', American Political Science Review, 53 (1959), 69-105; Milton Friedman, 'Capitalism and Freedom', New Individualist Review, 1 (1961), 3-10; L. von Mises, Socialism: An Economic and Sociological Analysis (Indianapolis: Liberty Classics, 1981); and William H. Riker and David L. Weimer, 'The Economic and Political Liberalization of Socialism: The Fundamental Problem of Property Rights', Social Philosophy and Policy, 10 (1993), 79-102.
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    • See Lucian Pye, Aspects of Political Development (Boston, Mass.: Little, Brown, 1966); and Robert D. McKinlay and A. S. Cohan, 'A Comparative Analysis of the Political and Economic Performance of Military and Civilian Regimes: A Cross-National Aggregate Study', Comparative Politics, 8 (1975), 1-30.
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    • See Lucian Pye, Aspects of Political Development (Boston, Mass.: Little, Brown, 1966); and Robert D. McKinlay and A. S. Cohan, 'A Comparative Analysis of the Political and Economic Performance of Military and Civilian Regimes: A Cross-National Aggregate Study', Comparative Politics, 8 (1975), 1-30.
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    • See Sirowy and Inkeles, 'The Effects of Democracy', p. 150. Also see Adam Przeworski and Fernando Limongi, 'Political Regimes and Economic Growth', Journal of Economic Perspectives, 7 (1993), 51-69, at p. 64.
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    • Political regimes and economic growth
    • See Sirowy and Inkeles, 'The Effects of Democracy', p. 150. Also see Adam Przeworski and Fernando Limongi, 'Political Regimes and Economic Growth', Journal of Economic Perspectives, 7 (1993), 51-69, at p. 64.
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    • Democracy and development
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    • Roger C. Kormendi and Philip G. Meguire, 'Macroeconomic Determinants of Growth: Cross-Country Evidence', Journal of Monetary Economics, 16 (1985), 141-63; and Abbas Pourgerami, 'Authoritarian versus Nonauthoritarian Approaches to Economic Development: Update and Additional Evidence', Public Choice, 74 (1992), 365-77.
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    • Adam Przeworski, 'Party Systems and Economic Development' (doctoral dissertation, Northwestern University, 1966); Irma Adelman and Cynthia Morris, Society, Politics and Economic Development (Baltimore, Md.: The John Hopkins University Press, 1967); Samuel P. Huntington and Jorge I. Dominguez, 'Political Development', in F. I. Greenstein and N. W. Polsby, eds, Handbook of Political Science, Vol. 3, Macropolitical Theory (Reading, Mass.: Addison-Wesley, 1975), pp. 1-114; Robert M. Marsh, 'Does Democracy Hinder Economic Development in the Latecomer Developing Nations?' Comparative Social Research, 2 (1979), 215-48; Erich Weede, 'The Impact of Democracy on Economic Growth', Kyklos, 36 (1983), 21-39; Daniel Landau, 'Government and Economic Growth in the LDCs: An Empirical Study for 1960-1980', Economic Development and Social Change, 35 (1986), 35-76; and John F. Helliwell, 'Empirical Linkages between Democracy and Economic Growth', British Journal of Political Science, 24 (1994), 225-48.
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    • Adam Przeworski, 'Party Systems and Economic Development' (doctoral dissertation, Northwestern University, 1966); Irma Adelman and Cynthia Morris, Society, Politics and Economic Development (Baltimore, Md.: The John Hopkins University Press, 1967); Samuel P. Huntington and Jorge I. Dominguez, 'Political Development', in F. I. Greenstein and N. W. Polsby, eds, Handbook of Political Science, Vol. 3, Macropolitical Theory (Reading, Mass.: Addison-Wesley, 1975), pp. 1-114; Robert M. Marsh, 'Does Democracy Hinder Economic Development in the Latecomer Developing Nations?' Comparative Social Research, 2 (1979), 215-48; Erich Weede, 'The Impact of Democracy on Economic Growth', Kyklos, 36 (1983), 21-39; Daniel Landau, 'Government and Economic Growth in the LDCs: An Empirical Study for 1960-1980', Economic Development and Social Change, 35 (1986), 35-76; and John F. Helliwell, 'Empirical Linkages between Democracy and Economic Growth', British Journal of Political Science, 24 (1994), 225-48.
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    • Alesina et al., Political Instability and Economic Growth; Cukierman et al., 'Seigniorage and Political Instability'; Charles L. Taylor, World Handbook of Social and Political Indicators (Ann Arbor, Mich.; ICPSR, 1985). Better terminology for irregular government change, major regular government change, and minor regular government change might be 'regime change', 'intergovernmental change', and 'intragovernmental change', respectively, but as this study replicates some previous research, the original terms for political instability are used here.
    • Seigniorage and Political Instability
    • Cukierman1
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    • Ann Arbor, Mich.; ICPSR
    • Alesina et al., Political Instability and Economic Growth; Cukierman et al., 'Seigniorage and Political Instability'; Charles L. Taylor, World Handbook of Social and Political Indicators (Ann Arbor, Mich.; ICPSR, 1985). Better terminology for irregular government change, major regular government change, and minor regular government change might be 'regime change', 'intergovernmental change', and 'intragovernmental change', respectively, but as this study replicates some previous research, the original terms for political instability are used here.
    • (1985) World Handbook of Social and Political Indicators
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    • Government capacity and private investment: A study of developing countries
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    • Yi Feng and Baizhu Chen, 'Government Capacity and Private Investment: A Study of Developing Countries', in Marina Arbetman and Jacek Kugler, eds, Political Capacity and Economic Behavior (Boulder, Colo.: Westview Press, 1996), chap. 5.
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    • Feng, Y.1    Chen, B.2
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    • Leaders, violence, and absence of change in Africa
    • See Henry Bienen, 'Leaders, Violence, and Absence of Change in Africa', Political Science Quarterly, 108 (1993), 271-82.
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    • Bienen, H.1
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    • The potential short-run negative effect of growth on democracy may be evidenced by a negative correlation between growth and civil liberties in the short run (annual) data (1978-90) for four Asian countries considered to have neo-authoritarian governments: Singapore, Malaysia, South Korea and Taiwan. The Pearson coefficient is - 0.305 (N = 52). By comparison, the Pearson coefficient for the whole sample is - 0.133 (N = 1,666). The data for civil liberties are from Raymond Gastil, Freedom in the World (Westport, Conn.: Greenwood, 1978-90) and the data for growth are from Robert Summers and Alan Heston, 'The Penn World Tables, Version 5.6' (1994), available on diskette from the National Bureau of Economic Research, Cambridge, Mass.
    • (1978) Freedom in the World
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    • available on diskette from the National Bureau of Economic Research, Cambridge, Mass.
    • The potential short-run negative effect of growth on democracy may be evidenced by a negative correlation between growth and civil liberties in the short run (annual) data (1978-90) for four Asian countries considered to have neo-authoritarian governments: Singapore, Malaysia, South Korea and Taiwan. The Pearson coefficient is - 0.305 (N = 52). By comparison, the Pearson coefficient for the whole sample is - 0.133 (N = 1,666). The data for civil liberties are from Raymond Gastil, Freedom in the World (Westport, Conn.: Greenwood, 1978-90) and the data for growth are from Robert Summers and Alan Heston, 'The Penn World Tables, Version 5.6' (1994), available on diskette from the National Bureau of Economic Research, Cambridge, Mass.
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    • Summers and Heston, 'The Penn World Tables, Version 5.6'; Taylor, World Handbook; Ted Robert Gurr, Polity II: Political Structures and Regime Change, 1800-1986 (Ann Arbor, Mich.: ICPSR, 1990); Arthur S. Banks, Cross-National Time-Series Data (Binghampton: The State University of New York, 1990); and Barro, 'Economic Growth in a Cross-Section of Countries'.
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    • Summers1    Heston2
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    • Summers and Heston, 'The Penn World Tables, Version 5.6'; Taylor, World Handbook; Ted Robert Gurr, Polity II: Political Structures and Regime Change, 1800-1986 (Ann Arbor, Mich.: ICPSR, 1990); Arthur S. Banks, Cross-National Time-Series Data (Binghampton: The State University of New York, 1990); and Barro, 'Economic Growth in a Cross-Section of Countries'.
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    • Summers and Heston, 'The Penn World Tables, Version 5.6'; Taylor, World Handbook; Ted Robert Gurr, Polity II: Political Structures and Regime Change, 1800-1986 (Ann Arbor, Mich.: ICPSR, 1990); Arthur S. Banks, Cross-National Time-Series Data (Binghampton: The State University of New York, 1990); and Barro, 'Economic Growth in a Cross-Section of Countries'.
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    • Summers and Heston, 'The Penn World Tables, Version 5.6'; Taylor, World Handbook; Ted Robert Gurr, Polity II: Political Structures and Regime Change, 1800-1986 (Ann Arbor, Mich.: ICPSR, 1990); Arthur S. Banks, Cross-National Time-Series Data (Binghampton: The State University of New York, 1990); and Barro, 'Economic Growth in a Cross-Section of Countries'.
    • (1990) Cross-national Time-series Data
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    • Summers and Heston, 'The Penn World Tables, Version 5.6'; Taylor, World Handbook; Ted Robert Gurr, Polity II: Political Structures and Regime Change, 1800-1986 (Ann Arbor, Mich.: ICPSR, 1990); Arthur S. Banks, Cross-National Time-Series Data (Binghampton: The State University of New York, 1990); and Barro, 'Economic Growth in a Cross-Section of Countries'.
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    • Does economic growth benefit the masses? Growth, dependence, and welfare in the third world
    • Standards of living might more appropriately be measured by GNP per capita, which adjusts GDP to remove net factor payments to foreigners, or by sustainable consumption levels. Since GDP is widely used and over the period of analysis the international differences in the rates of growth of per capita GDP and GNP are highly correlated, GDP is used in this study. Also, in addition to the growth rate of GDP or GNP per capita, the developmental goals of any country may include improvements in the living standard, health, education, employment, control of inflation, foreign debts, etc. Glenn Firebaugh and Frank D. Beck address some of these issues in 'Does Economic Growth Benefit the Masses? Growth, Dependence, and Welfare in the Third World', American Sociological Review, 59 (1994), 631-53.
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    • For the theoretical argument, see Robert E. Lucas, 'On the Mechanics of Economic Development', Journal of Monetary Economics, 2 (1988), 3-42; Paul Romer, 'Increasing Returns and Long-run Growth', Journal of Political Economy, 94 (1986), 1002-37; and Alwyn Young, 'A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore', NBER Macroeconomic Annual 1992 (Cambridge, Mass.: NBER, 1992), pp. 13-54.
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    • For the theoretical argument, see Robert E. Lucas, 'On the Mechanics of Economic Development', Journal of Monetary Economics, 2 (1988), 3-42; Paul Romer, 'Increasing Returns and Long-run Growth', Journal of Political Economy, 94 (1986), 1002-37; and Alwyn Young, 'A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore', NBER Macroeconomic Annual 1992 (Cambridge, Mass.: NBER, 1992), pp. 13-54.
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    • Cambridge, Mass.: NBER
    • For the theoretical argument, see Robert E. Lucas, 'On the Mechanics of Economic Development', Journal of Monetary Economics, 2 (1988), 3-42; Paul Romer, 'Increasing Returns and Long-run Growth', Journal of Political Economy, 94 (1986), 1002-37; and Alwyn Young, 'A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore', NBER Macroeconomic Annual 1992 (Cambridge, Mass.: NBER, 1992), pp. 13-54.
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    • A sensitivity analysis of cross-country growth regressions
    • Ross Levine and David Renelt, 'A Sensitivity Analysis of Cross-Country Growth Regressions', American Economic Review, 82 (1992), 942-63.
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    • Levine, R.1    Renelt, D.2
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    • Kormendi and Meguire, 'Macroeconomic Determinants of Growth'; Glenn Firebaugh, 'Growth Effects of Foreign and Domestic Investment', American Journal of Sociology, 98 (1992), 105-30; Levine and Renelt, 'A Sensitivity Analysis of Cross-Country Growth Regressions'.
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    • Kormendi and Meguire, 'Macroeconomic Determinants of Growth'; Glenn Firebaugh, 'Growth Effects of Foreign and Domestic Investment', American Journal of Sociology, 98 (1992), 105-30; Levine and Renelt, 'A Sensitivity Analysis of Cross-Country Growth Regressions'.
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    • Kormendi and Meguire, 'Macroeconomic Determinants of Growth'; and Friedrick Schneider and Bruno Frey, 'Economic and Political Determinants of Foreign Direct Investment', World Development, 13 (1985), 161-75.
    • Macroeconomic Determinants of Growth
    • Kormendi1    Meguire2
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    • Kormendi and Meguire, 'Macroeconomic Determinants of Growth'; and Friedrick Schneider and Bruno Frey, 'Economic and Political Determinants of Foreign Direct Investment', World Development, 13 (1985), 161-75.
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    • Schneider, F.1    Frey, B.2
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    • Cambridge, Mass.: National Bureau of Economic Research, Working Paper No. 3702
    • Stanley Fischer, Growth, Macroeconomics, and Development (Cambridge, Mass.: National Bureau of Economic Research, Working Paper No. 3702, 1991).
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    • Why does overcrowded resource-poor East Asia succeed - Lessons for the LDCs?
    • Anthony M. Tang and James S. Worley, eds, 'Why Does Overcrowded Resource-Poor East Asia Succeed - Lessons for the LDCs?' Economic Development and Cultural Change, 36 (1988), Supplement; Demetrios Moschos, 'Export Expansion, Growth and the Level of Economic Development', Journal of Development Economics, 30(1989), 93-102; and Levine and Renelt, 'A Sensitivity Analysis of Cross-Country Growth Regressions'.
    • (1988) Economic Development and Cultural Change , vol.36 , Issue.SUPPL.
    • Tang, A.M.1    Worley, J.S.2
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    • Export expansion, growth and the level of economic development
    • Anthony M. Tang and James S. Worley, eds, 'Why Does Overcrowded Resource-Poor East Asia Succeed - Lessons for the LDCs?' Economic Development and Cultural Change, 36 (1988), Supplement; Demetrios Moschos, 'Export Expansion, Growth and the Level of Economic Development', Journal of Development Economics, 30(1989), 93-102; and Levine and Renelt, 'A Sensitivity Analysis of Cross-Country Growth Regressions'.
    • (1989) Journal of Development Economics , vol.30 , pp. 93-102
    • Moschos, D.1
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    • Anthony M. Tang and James S. Worley, eds, 'Why Does Overcrowded Resource-Poor East Asia Succeed - Lessons for the LDCs?' Economic Development and Cultural Change, 36 (1988), Supplement; Demetrios Moschos, 'Export Expansion, Growth and the Level of Economic Development', Journal of Development Economics, 30(1989), 93-102; and Levine and Renelt, 'A Sensitivity Analysis of Cross-Country Growth Regressions'.
    • A Sensitivity Analysis of Cross-country Growth Regressions
    • Levine1    Renelt2
  • 86
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    • I use trade intensity rather than the share of exports in GDP, as it has been found by Levine and Renelt that all findings using the share of exports in GDP could be obtained almost identically using the total trade or import share. Thus, cross-country growth studies that use export indicators should not be interpreted as studying the relationship between growth and exports per se, but rather as between growth and trade defined more broadly. See Levine and Renelt, 'A Sensitivity Analysis of Cross-Country Growth Regressions', p. 959.
    • A Sensitivity Analysis of Cross-country Growth Regressions , pp. 959
    • Levine1    Renelt2
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    • Cambridge, Mass.: Harvard University Press
    • The opposite of the probability of government change is the concept of government durability, which implies the stability and efficacy of a government. See G. Bingham Powell Jr, Contemporary Democracies: Participation, Stability, and Violence (Cambridge, Mass.: Harvard University Press, 1986).
    • (1986) Contemporary Democracies: Participation, Stability, and Violence
    • Powell G.B., Jr.1
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    • note
    • Most variables in the logit model have the expected sign, even though not all are statistically significant (see Appendix 3). In particular, an increase in consumption levels decreases the likelihood of irregular government change. Riots, political repressions, deaths from political violence and unsuccessful attempts to change the government all signal the imminence of a political crisis and they increase the probability of irregular government change and major regular government change. Party competition decreases the probability of irregular government change, whereas it increases the probability of regular government change. The fractionalization of the legislature (as indexed by the number of all seats in the legislature divided by those of the largest party) increases the probability of all three kinds of government change. While non-civilian-controlled governments tend to have more irregular government changes and fewer minor regular government changes, a recent change in the constitution tends to decrease irregular government changes and to increase minor regular government changes in that particular nation. Continent dummy variables are also statistically significant, indicating that there are additional factors contributing to the instability of the political system which are not fully captured by the explanatory variables in the models. Compared with the OECD countries, Latin American nations tend to have either irregular change or minor regular change. Asian countries are more likely to have minor regular change and not to have major regular change. African countries are least likely to have major regular change.
  • 92
    • 85033085657 scopus 로고    scopus 로고
    • note
    • Log-odds ratios for the probability of government change are used in 3SLS estimation to avoid the heteroscedasticity problem, as the value of the probability of government change ranges from zero to one. The log-odds ratio is a monotonically increasing function of the probability of government change.
  • 93
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    • note
    • Statistically, they ensure that the 3SLS system is identified.
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    • Gurr's "Persistence and change" revisited: Some consequences of using different operationalizations of "change of policy"
    • Also see Robert Harmel, 'Gurr's "Persistence and Change" Revisited: Some Consequences of Using Different Operationalizations of "Change of Policy" ', European Journal of Political Research, 8 (1980), 189-214; and Ted Robert Gurr, Keith Jaggers and Will H. Moore, 'The Transformation of the Western State: The Growth of Democracy, Autocracy, and State Power since 1800', Studies in Comparative International Development, 25 (1990), 73-108.
    • (1980) European Journal of Political Research , vol.8 , pp. 189-214
    • Harmel, R.1
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    • The transformation of the western state: The growth of democracy, autocracy, and state power since 1800
    • Also see Robert Harmel, 'Gurr's "Persistence and Change" Revisited: Some Consequences of Using Different Operationalizations of "Change of Policy" ', European Journal of Political Research, 8 (1980), 189-214; and Ted Robert Gurr, Keith Jaggers and Will H. Moore, 'The Transformation of the Western State: The Growth of Democracy, Autocracy, and State Power since 1800', Studies in Comparative International Development, 25 (1990), 73-108.
    • (1990) Studies in Comparative International Development , vol.25 , pp. 73-108
    • Gurr, T.R.1    Jaggers, K.2    Moore, W.H.3
  • 101
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    • note
    • The two cultural variables also help identify the equation where they are excluded. Though they take the value of one or zero, they have the same statistical properties as other predetermined variables in identifying the system.
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    • Will more countries become democratic?
    • Samuel P. Huntington, 'Will More Countries Become Democratic?' Political Science Quarterly, 99 (1984), 193-218; and 'Clashes of Civilizations?' Foreign Affairs, 72 (1993), 22-49.
    • (1984) Political Science Quarterly , vol.99 , pp. 193-218
    • Huntington, S.P.1
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    • Clashes of civilizations?
    • Samuel P. Huntington, 'Will More Countries Become Democratic?' Political Science Quarterly, 99 (1984), 193-218; and 'Clashes of Civilizations?' Foreign Affairs, 72 (1993), 22-49.
    • (1993) Foreign Affairs , vol.72 , pp. 22-49
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    • Comparative national statistics
    • Chicago: Encyclopedia Britannica, Inc.
    • The source is 'Comparative National Statistics', Britannica Book of the Year (Chicago: Encyclopedia Britannica, Inc., 1994), pp. 783-5.
    • (1994) Britannica Book of the Year , pp. 783-785
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    • Kormendi and Meguire, 'Macroeconomic Determinants'; Scully, 'The Institutional Framework and Economic Development'; Barro, 'Economic Growth in a Cross-Section of Countries'; Alesina et al., Political Instability and Economic Growth.
    • Macroeconomic Determinants
    • Kormendi1    Meguire2
  • 106
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    • Kormendi and Meguire, 'Macroeconomic Determinants'; Scully, 'The Institutional Framework and Economic Development'; Barro, 'Economic Growth in a Cross-Section of Countries'; Alesina et al., Political Instability and Economic Growth.
    • The Institutional Framework and Economic Development
    • Scully1
  • 107
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    • Kormendi and Meguire, 'Macroeconomic Determinants'; Scully, 'The Institutional Framework and Economic Development'; Barro, 'Economic Growth in a Cross-Section of Countries'; Alesina et al., Political Instability and Economic Growth.
    • Economic Growth in a Cross-section of Countries
    • Barro1
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    • Kormendi and Meguire, 'Macroeconomic Determinants'; Scully, 'The Institutional Framework and Economic Development'; Barro, 'Economic Growth in a Cross-Section of Countries'; Alesina et al., Political Instability and Economic Growth.
    • Political Instability and Economic Growth
    • Alesina1
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    • Lucas, 'On the Mechanics of Economic Development'; Romer, 'Increasing Returns and Long-Run Growth'; Barro, 'Economic Growth in a Cross-Section of Countries'; and Young, 'A Tale of Two Cities'.
    • On the Mechanics of Economic Development
    • Lucas1
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    • Lucas, 'On the Mechanics of Economic Development'; Romer, 'Increasing Returns and Long-Run Growth'; Barro, 'Economic Growth in a Cross-Section of Countries'; and Young, 'A Tale of Two Cities'.
    • Increasing Returns and Long-run Growth
    • Romer1
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    • Lucas, 'On the Mechanics of Economic Development'; Romer, 'Increasing Returns and Long-Run Growth'; Barro, 'Economic Growth in a Cross-Section of Countries'; and Young, 'A Tale of Two Cities'.
    • A Tale of Two Cities
    • Young1
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    • For the former argument, see Cukierman et al., 'Seigniorage and Political Instability', p. 550; for the latter argument, see Londregan and Poole, 'Poverty, the Coup Trap, and the Seizure of Executive Power', pp. 163, 173.
    • Seigniorage and Political Instability , pp. 550
    • Cukierman1
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    • Is democracy bad for growth?
    • 1 June
    • Karen Pennar et al., 'Is democracy bad for growth?' Business Week, 1 June 1993, pp. 84-8.
    • (1993) Business Week , pp. 84-88
    • Pennar, K.1
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    • note
    • A classic example of this argument can be found in the recent democratization process in South Korea and Taiwan.
  • 125
    • 85033091223 scopus 로고    scopus 로고
    • note
    • For a system where all political instability variables (endogenous as well as predetermined) are excluded, the parameter estimates and standard errors for initial development and education in the democracy equation would be 1.127 (0.225) and 1.228 (2.044), respectively.
  • 126
    • 75849137003 scopus 로고
    • Issues in the comparative measurement of political democracy
    • Kenneth A. Bollen, 'Issues in the Comparative Measurement of Political Democracy', American Sociological Review, 45 (1980), 567-91; 'Political Democracy: Conceptual and Measurement Traps', Studies in Comparative International Development, 25 (1990), 7-24; and 'Liberal Democracy: Validity and Method Factors in Cross-National Measures', American Journal of Political Science, 37 (1993), 1207-30. In the last mentioned article (p. 1209), Bollen defines democracy as the extent to which a political system allows political liberties and democratic rule. 'Political liberties exist to the extent that the people of a country have the freedom to express a variety of political opinions in any media and the freedom to form or to participate in any political group. Democratic rule exists to the extent that the national government is accountable to the general population, and each individual is entitled to participate in the government directly or through representatives'.
    • (1980) American Sociological Review , vol.45 , pp. 567-591
    • Bollen, K.A.1
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    • Political democracy: Conceptual and measurement traps
    • Kenneth A. Bollen, 'Issues in the Comparative Measurement of Political Democracy', American Sociological Review, 45 (1980), 567-91; 'Political Democracy: Conceptual and Measurement Traps', Studies in Comparative International Development, 25 (1990), 7-24; and 'Liberal Democracy: Validity and Method Factors in Cross-National Measures', American Journal of Political Science, 37 (1993), 1207-30. In the last mentioned article (p. 1209), Bollen defines democracy as the extent to which a political system allows political liberties and democratic rule. 'Political liberties exist to the extent that the people of a country have the freedom to express a variety of political opinions in any media and the freedom to form or to participate in any political group. Democratic rule exists to the extent that the national government is accountable to the general population, and each individual is entitled to participate in the government directly or through representatives'.
    • (1990) Studies in Comparative International Development , vol.25 , pp. 7-24
  • 128
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    • Liberal democracy: Validity and method factors in cross-national measures
    • Kenneth A. Bollen, 'Issues in the Comparative Measurement of Political Democracy', American Sociological Review, 45 (1980), 567-91; 'Political Democracy: Conceptual and Measurement Traps', Studies in Comparative International Development, 25 (1990), 7-24; and 'Liberal Democracy: Validity and Method Factors in Cross-National Measures', American Journal of Political Science, 37 (1993), 1207-30. In the last mentioned article (p. 1209), Bollen defines democracy as the extent to which a political system allows political liberties and democratic rule. 'Political liberties exist to the extent that the people of a country have the freedom to express a variety of political opinions in any media and the freedom to form or to participate in any political group. Democratic rule exists to the extent that the national government is accountable to the general population, and each individual is entitled to participate in the government directly or through representatives'.
    • (1993) American Journal of Political Science , vol.37 , pp. 1207-1230
  • 131
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    • note
    • The following countries are in the Gurr index, but not the Bollen index average. Note that there are more than twenty-six countries here; in the simultaneous equations, the final number of observations used in calculations is determined by full observations of all variables in the equations: Algeria, Angola, Argentina, Australia, Austria, Belgium, Bangladesh, Bolivia, Botswana, Brazil, Burkina Faso, Burundi, Cameroon, Canada, Central African Republic, Chad, Chile, El Salvador, Guinea, Guinea-Bissau, Guyana, Kuwait, Lesotho, Malawi, Mauritius, Mozambique, Myanmar, Saudi Arabia, Tanzania, Togo, Zambia and Zimbabwe.
  • 132
    • 85033084352 scopus 로고    scopus 로고
    • note
    • Empirically, the net total effect of democracy on growth is found to be small. According to the result in Table 2, the direct and indirect impacts of democracy on growth have very similar absolute values, with the net total effect being - 0.0018. Again, according to Table 3, the difference is very small, with the net total effect being 0.0001. (The derivation from Table 2 is - 0.0018 = 1 × ( - 0.010) + ( - 0.114) × ( - 0.025) + (0.224) × (0.024), and the derivation from Table 3 is 0.0001 = 1 × ( - 0.001) + ( - 0.030) × ( - 0.017) + (0.038) × (0.016). While the first term on the right-hand side of the equation is the direct effect, the second is the indirect effect through the inhibition of irregular change, and the third is the indirect effect through the promotion of regular change. Note that the effect of minor regular change on growth is insignificant even at the 10 per cent level in both tables.) Two things deserve notice. First, considering the sampling and probabilistic characteristics of data analysis, the difference between the direct and indirect effects may well be statistically and substantively insignificant. Secondly, given the instrumental variable design employed here, the feedbacks between democracy, on the one hand, and investment and education, on the other, have been excluded. Helliwell found a positive effect of democracy on investment and education, both of which, in turn, exert a positive impact on growth. When due allowance is made for these interactions, the net total effect of democracy on growth is very likely to be positive.
  • 136
    • 0004246838 scopus 로고    scopus 로고
    • The works referred to in the definitions of the variables in Appendix 1 are as follows: Summers and Heston, 'The Penn World Tables'; Gurr, Polity II; Bollen, 'Issues in the Comparative Measurement of Political Democracy', 'Political Democracy' and 'Liberal Democracy'; Taylor, World Handbook; Banks, Cross-National Time-Series Data; Barro, 'Economic Growth in a Cross-Section of Countries'; 'Comparative National Statistics', Britannica Book of the Year (1994); Huntington, 'Clashes of Civilizations?'
    • The Penn World Tables
    • Summers1    Heston2
  • 137
    • 85033076820 scopus 로고    scopus 로고
    • The works referred to in the definitions of the variables in Appendix 1 are as follows: Summers and Heston, 'The Penn World Tables'; Gurr, Polity II; Bollen, 'Issues in the Comparative Measurement of Political Democracy', 'Political Democracy' and 'Liberal Democracy'; Taylor, World Handbook; Banks, Cross-National Time-Series Data; Barro, 'Economic Growth in a Cross-Section of Countries'; 'Comparative National Statistics', Britannica Book of the Year (1994); Huntington, 'Clashes of Civilizations?'
    • Polity II
    • Gurr1
  • 138
    • 85033091288 scopus 로고    scopus 로고
    • Issues in the comparative measurement of political democracy
    • Political Democracy
    • The works referred to in the definitions of the variables in Appendix 1 are as follows: Summers and Heston, 'The Penn World Tables'; Gurr, Polity II; Bollen, 'Issues in the Comparative Measurement of Political Democracy', 'Political Democracy' and 'Liberal Democracy'; Taylor, World Handbook; Banks, Cross-National Time-Series Data; Barro, 'Economic Growth in a Cross-Section of Countries'; 'Comparative National Statistics', Britannica Book of the Year (1994); Huntington, 'Clashes of Civilizations?'
    • Liberal Democracy
    • Bollen1
  • 139
    • 0039598903 scopus 로고    scopus 로고
    • The works referred to in the definitions of the variables in Appendix 1 are as follows: Summers and Heston, 'The Penn World Tables'; Gurr, Polity II; Bollen, 'Issues in the Comparative Measurement of Political Democracy', 'Political Democracy' and 'Liberal Democracy'; Taylor, World Handbook; Banks, Cross-National Time-Series Data; Barro, 'Economic Growth in a Cross-Section of Countries'; 'Comparative National Statistics', Britannica Book of the Year (1994); Huntington, 'Clashes of Civilizations?'
    • World Handbook
    • Taylor1
  • 140
    • 0003521701 scopus 로고    scopus 로고
    • The works referred to in the definitions of the variables in Appendix 1 are as follows: Summers and Heston, 'The Penn World Tables'; Gurr, Polity II; Bollen, 'Issues in the Comparative Measurement of Political Democracy', 'Political Democracy' and 'Liberal Democracy'; Taylor, World Handbook; Banks, Cross-National Time-Series Data; Barro, 'Economic Growth in a Cross-Section of Countries'; 'Comparative National Statistics', Britannica Book of the Year (1994); Huntington, 'Clashes of Civilizations?'
    • Cross-national Time-series Data
    • Banks1
  • 141
    • 0004128891 scopus 로고    scopus 로고
    • The works referred to in the definitions of the variables in Appendix 1 are as follows: Summers and Heston, 'The Penn World Tables'; Gurr, Polity II; Bollen, 'Issues in the Comparative Measurement of Political Democracy', 'Political Democracy' and 'Liberal Democracy'; Taylor, World Handbook; Banks, Cross-National Time-Series Data; Barro, 'Economic Growth in a Cross-Section of Countries'; 'Comparative National Statistics', Britannica Book of the Year (1994); Huntington, 'Clashes of Civilizations?'
    • Economic Growth in a Cross-section of Countries
    • Barro1
  • 142
    • 0040784580 scopus 로고
    • Comparative national statistics
    • The works referred to in the definitions of the variables in Appendix 1 are as follows: Summers and Heston, 'The Penn World Tables'; Gurr, Polity II; Bollen, 'Issues in the Comparative Measurement of Political Democracy', 'Political Democracy' and 'Liberal Democracy'; Taylor, World Handbook; Banks, Cross-National Time-Series Data; Barro, 'Economic Growth in a Cross-Section of Countries'; 'Comparative National Statistics', Britannica Book of the Year (1994); Huntington, 'Clashes of Civilizations?'
    • (1994) Britannica Book of the Year
  • 143
    • 0004160001 scopus 로고    scopus 로고
    • The works referred to in the definitions of the variables in Appendix 1 are as follows: Summers and Heston, 'The Penn World Tables'; Gurr, Polity II; Bollen, 'Issues in the Comparative Measurement of Political Democracy', 'Political Democracy' and 'Liberal Democracy'; Taylor, World Handbook; Banks, Cross-National Time-Series Data; Barro, 'Economic Growth in a Cross-Section of Countries'; 'Comparative National Statistics', Britannica Book of the Year (1994); Huntington, 'Clashes of Civilizations?'
    • Clashes of Civilizations?
    • Huntington1
  • 144
    • 0039598903 scopus 로고    scopus 로고
    • The works cited in Appendix 2 are: Taylor, World Handbook; Banks, Cross-National Time-Series Data; Summers and Heston, 'The Penn World Tables', 1994.
    • World Handbook
    • Taylor1
  • 145
    • 0003521701 scopus 로고    scopus 로고
    • The works cited in Appendix 2 are: Taylor, World Handbook; Banks, Cross-National Time-Series Data; Summers and Heston, 'The Penn World Tables', 1994.
    • Cross-national Time-series Data
    • Banks1
  • 146
    • 0004246838 scopus 로고    scopus 로고
    • The works cited in Appendix 2 are: Taylor, World Handbook; Banks, Cross-National Time-Series Data; Summers and Heston, 'The Penn World Tables', 1994.
    • (1994) The Penn World Tables
    • Summers1    Heston2


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