Democracy Does Cause Growth
2018/09/27 by Daron Acemoglu, Daron Acemoğlu, Suresh Naidu +2 · 1,494 citations
Economics, Econometrics and Finance · Medicine · Social Sciences · #Capital (architecture) #Corruption and Economic Development #Democracy #Democratization #Demographic economics #Development economics #Econometrics #Economic growth #Economics #Environmental health #Fiscal Policy and Economic Growth #Geography #Gross domestic product #Human capital #Income, Poverty, and Inequality #Instrumental variable #Macroeconomics #Medicine #Monetary economics #Per capita #Political science #Politics #Real gross domestic product
paper · open access · doi:10.1086/700936
published in Journal of Political Economy 127(1), 47-100 (University of Chicago Press)
openalex publication_date 2018/09/27 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/04
Abstract
We provide evidence that democracy has a positive effect on GDP per capita. Our dynamic panel strategy controls for country fixed effects and the rich dynamics of GDP, which otherwise confound the effect of democracy. To reduce measurement error, we introduce a new indicator of democracy that consolidates previous measures. Our baseline results show that democratizations increase GDP per capita by about 20 percent in the long run. We find similar effects using a propensity score reweighting strategy as well as an instrumental-variables strategy using regional waves of democratization. The effects are similar across different levels of development and appear to be driven by greater investments in capital, schooling, and health.
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