Political instability, freedom, and economic growth: Some further evidence

Economic Development and Cultural Change

Volumn 44, Issue 2, 1996, Pages 339-350

  De Haan, Jakob ^a   Siermann, Clemens L J ^a  

^a UNIVERSITY OF GRONINGEN   (Netherlands)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 4243064103     PISSN: 00130079     EISSN: None     Source Type: Journal    
DOI: 10.1086/452217     Document Type: Article

References (21)

1. David Marquand, "Political Institutions and Economic Performance," in Government and Economies in the Postwar World, ed. Andrew Graham and Anthony Seldon (London: Routledge, 1990).
2. Larry Sirowy and Alex Inkeles, "The Effects of Democracy on Economic Growth and Inequality: A Review," Studies in Comparative International Development 25, no. 1 (Spring 1990): 126-57.
3. Gerald W. Scully, "The Institutional Framework and Economic Development," Journal of Political Economy 96 (October 1988): 652-62; Roger C. Kormendi and Philip G. Meguire, "Macroeconomic Determinants of Growth: Cross-Country Evidence," Journal of Monetary Economics 16, no. 2 (September 1985): 141-63; Kevin B. Grier and Gordon Tullock, "An Empirical Analysis of Cross-National Economic Growth, 1951-80," Journal of Monetary Economics 24 (August 1989): 259-76; and Robert J. Barro, "A Cross-Country Study of Growth, Saving and Government," Working Paper no. 2855 (National Bureau of Economic Research, Cambridge, Mass., February 1989).
4. Gerald W. Scully, "The Institutional Framework and Economic Development," Journal of Political Economy 96 (October 1988): 652-62; Roger C. Kormendi and Philip G. Meguire, "Macroeconomic Determinants of Growth: Cross-Country Evidence," Journal of Monetary Economics 16, no. 2 (September 1985): 141-63; Kevin B. Grier and Gordon Tullock, "An Empirical Analysis of Cross-National Economic Growth, 1951-80," Journal of Monetary Economics 24 (August 1989): 259-76; and Robert J. Barro, "A Cross-Country Study of Growth, Saving and Government," Working Paper no. 2855 (National Bureau of Economic Research, Cambridge, Mass., February 1989).
5. Gerald W. Scully, "The Institutional Framework and Economic Development," Journal of Political Economy 96 (October 1988): 652-62; Roger C. Kormendi and Philip G. Meguire, "Macroeconomic Determinants of Growth: Cross-Country Evidence," Journal of Monetary Economics 16, no. 2 (September 1985): 141-63; Kevin B. Grier and Gordon Tullock, "An Empirical Analysis of Cross-National Economic Growth, 1951-80," Journal of Monetary Economics 24 (August 1989): 259-76; and Robert J. Barro, "A Cross-Country Study of Growth, Saving and Government," Working Paper no. 2855 (National Bureau of Economic Research, Cambridge, Mass., February 1989).
6. Gerald W. Scully, "The Institutional Framework and Economic Development," Journal of Political Economy 96 (October 1988): 652-62; Roger C. Kormendi and Philip G. Meguire, "Macroeconomic Determinants of Growth: Cross-Country Evidence," Journal of Monetary Economics 16, no. 2 (September 1985): 141-63; Kevin B. Grier and Gordon Tullock, "An Empirical Analysis of Cross-National Economic Growth, 1951-80," Journal of Monetary Economics 24 (August 1989): 259-76; and Robert J. Barro, "A Cross-Country Study of Growth, Saving and Government," Working Paper no. 2855 (National Bureau of Economic Research, Cambridge, Mass., February 1989).
7. Raymond D. Gastil, Freedom in the World (Oxford: Clio), various vols. See Sec. II for a discussion of these data.
8. Barro, pp. 21-22.
9. Augustin Kwasi Fosu, "Political Instability and Economic Growth: Evidence from Sub-Saharan Africa," Economic Development and Cultural Change 40 (July 1992): 829-41.
10. This model is very similar to the one used by Fosu, who also included exports as an explanatory variable. However, the inclusion of exports in an aggregate production function may be questioned. We are not aware of any sound theoretical justification for this approach and therefore have not included exports in our model. As suggested by one of the referees, we have also estimated the model by using the growth rate of investment minus the growth rate of the population, to take account of the correlation of the right-hand-side variables. This did not, however, affect our general conclusions.
11. International Monetary Fund, International Financial Statistics Yearbook (Washington, D.C.: IMF, 1990 and 1991), vols. 43 and 44.
12. R. Summers and A. Heston, "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988," Quarterly Journal of Economics 106 (May 1991): 327-68.
13. Sebastian Edwards and Guido Tabellini, "Explaining Fiscal Policies and Inflation in Developing Countries," Journal of International Money and Finance 10, suppl. (1991): S16-S48. We have also constructed a similar dichotomous variable based on the number of irregular government transfers (coups). Since this variable generally yielded the same outcomes, we do not report them here.
14. C. L. Taylor and D. Jodice, World Handbook of Social and Political Indicators (New Haven, Conn.: Yale University Press, 1983).
15. Arthur S. Banks, Political Handbook of the World (New York: McGraw-Hill), various issues.
16. We have also experimented using an average of five as a cutoff point, but this yielded similar results as for the models with PRI4.
17. Kormendi and Meguire (n. 3 above), p. 46.
18. H. White, "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica 48 (May 1980): 817-38.
19. Note the very poor fit of the regression for Asia. Apparently the model is not able to capture the highly diverging development patterns in Asia. We have tried various country-dummies to improve the fit, but this did not change our basic conclusion with respect to the significance of the coefficient of TRNS.
20. See Sec. II for further details on the construction of this dummy.
21. Mancur Olson, "Rapid Economic Growth as a Destabilizing Force," Journal of Economic History 23 (1963): 519-52, quote on 550.