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Democracy and Macroeconomic Performance in Underdeveloped Countries

Democracy and Macroeconomic Performance in Underdeveloped Countries In this study, the author examines how inflation and economic growth differ in more- and less-democratic regimes and in new and mature democracies. The analysis is based on a panel research design featuring annual data from a large sample of underdeveloped countries and two-way, fixed-effects regression analysis. The author's central finding is that more-democratic countries have higher inflation and slower growth than less-democratic countries. Inflation apparently is higher than more-democratic countries mainly because they have higher fiscal deficits and faster wage growth; this higher inflation marginally reduces economic growth in these countries. The author also finds that new and mature democracies do not have significantly different inflation and growth rates. The findings suggest that unrestrained political participation and the resulting demands placed on state officials undermine democratic performance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Comparative Political Studies SAGE

Democracy and Macroeconomic Performance in Underdeveloped Countries

GASIOROWSKI, MARK J.
Comparative Political Studies , Volume 33 (3): 31 – Apr 1, 2000
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References (47)

Publisher
SAGE
Copyright
Copyright © by SAGE Publications
ISSN
0010-4140
eISSN
1552-3829
DOI
10.1177/0010414000033003002
Publisher site
See Article on Publisher Site

Abstract

In this study, the author examines how inflation and economic growth differ in more- and less-democratic regimes and in new and mature democracies. The analysis is based on a panel research design featuring annual data from a large sample of underdeveloped countries and two-way, fixed-effects regression analysis. The author's central finding is that more-democratic countries have higher inflation and slower growth than less-democratic countries. Inflation apparently is higher than more-democratic countries mainly because they have higher fiscal deficits and faster wage growth; this higher inflation marginally reduces economic growth in these countries. The author also finds that new and mature democracies do not have significantly different inflation and growth rates. The findings suggest that unrestrained political participation and the resulting demands placed on state officials undermine democratic performance.

Journal

Comparative Political Studies – SAGE

Published: Apr 1, 2000

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