1997/07/01 by Yi Feng, YI FENG · 448 citations
Economics, Econometrics and Finance · Social Sciences · #Corruption and Economic Development #Democracy #Development economics #Economic system #Economics #Fiscal Policies and Political Economy #Fiscal Policy and Economic Growth #Government (linguistics) #Law #Macroeconomics #Political economy #Political instability #Political science #Political stability #Politics #Regime change #Stability (learning theory)
paper · doi:10.1017/s0007123497000197
published in British Journal of Political Science 27(3), 391-418 (Cambridge University Press)
openalex publication_date 1997/07/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01
This article investigates the interactions between democracy, political stability and economic growth. Two aspects of the study differentiate it from previous research. First, a simultaneous approach is adopted which combines the study of economic growth and political stability with that of economic growth and democracy. Secondly, a distinction is made between types of political instability, because different kinds of government change have different effects on economic growth and democracy. This analysis employs three-stage least-squares estimation, and utilizes aggregate data covering ninety-six countries from 1960 to 1980. The results indicate that democracy has a positive indirect effect upon growth through its impacts on the probabilities of both regime change and constitutional government change from one ruling party to another. In addition, the evidence indicates that the two kinds of political change mentioned above have significant and opposite effects on growth; that growth has a negative effect on regime change and a positive effect on the probability of the ruling party remaining in power; and that long-run economic growth tends to exert a positive effect upon democracy.