Democracy and Reforms

The authors use a sample of 147 countries to investigate the link between democracy and reforms. Democracy may be conducive to reforms, because politicians have the incentive to embrace growth-enhancing reforms to win elections. By contrast, authoritarian regimes do not have to worry as much about public opinion and may undertake reforms that are painful in the short run but bring future prosperity. This paper tests these hypotheses, using data on micro-economic reforms from the World Bank's Doing Business database. These data do not suffer the endogeneity issues associated with other datasets on changes in economic institutions. The results provide robust support for the claim that democracy is good for growth-enhancing reforms.

Bibliographic Details

Main Authors:	Amin, Mohammad, Djankov, Simeon
Language:	English
Published:	2009-02-01
Subjects:	AUTHORITARIANISM, AUTHORITY, BANKRUPTCY, BARRIER, BUSINESS CLIMATE, BUSINESS ENVIRONMENT, BUSINESS REGULATIONS, CIVIL LAW, COMMON LAW, CONTRACT ENFORCEMENT, CRIME, DEMOCRACIES, DEMOCRACY, DEMOCRATIC ENVIRONMENT, DEMOCRATIC REGIMES, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, ECONOMIC CRISES, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC LIBERALIZATION, ECONOMIC REFORMS, ECONOMICS, ELECTION, ELECTIONS, GOVERNANCE INDICATORS, INCOME, INSTITUTIONAL ENVIRONMENT, INTERNATIONAL TRADE, INVESTIGATION, LABOR MARKETS, LEGAL REFORMS, LEGAL RIGHTS, LEGAL SYSTEM, LIVING STANDARDS, MACRO LEVEL, MILITARY REGIMES, MINORITY SHAREHOLDERS, MORTALITY, POLITICAL ECONOMY, POLITICAL RIGHTS, POLITICIANS, PRIVATE INVESTMENT, PRIVATE SECTOR DEVELOPMENT, PRODUCTIVITY, PROPERTY RIGHTS, PUBLIC OPINION, RAPID GROWTH, RENTS, RULE OF LAW, SHAREHOLDER, SHAREHOLDER RIGHTS, THIRD WORLD, WAGES, WORLD DEVELOPMENT INDICATORS,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090210105038 https://hdl.handle.net/10986/4031
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