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Democracy Does Cause Growth

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Democracy Does Cause Growth

NBER,

5 min read
5 take-aways
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Empirical evidence suggests that, contrary to popular perception, democracy has a positive impact on per capita GDP.

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Editorial Rating

8

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  • Innovative
  • Scientific

Recommendation

In the wake of China’s emergence as an economic superpower, an increasing number of observers have called into question the role of democracy in enabling economic expansion. In fact, some believe it to be an impediment. The empirical evidence in this groundbreaking report from economists Daron Acemoglu, Suresh Naidu, Pascual Restrepo and James A. Robinson suggests that democracy has a positive and measurable impact on per capita GDP and that it doesn’t appear to hinder growth in lesser-developed countries. getAbstract recommends this scholarly study’s findings to executives and investors of all political stripes.

Summary

The relationship of democracy to economic growth is a long-standing subject of academic scrutiny and public debate. Some social scientists see a broad contradiction between democracy and capitalism, and several economists cite a number of problems with democratic rule, including political gridlock and interest groups that can stymie progress. Yet several studies have concluded that democracy encourages growth by constraining power-hungry despots, reining in political blocs that wield excessive clout, and increasing the availability of education and other public...

About the Authors

Daron Acemoglu is an economics professor at MIT, Suresh Naidu is an assistant professor of economics at Columbia University, Pascual Restrepo is a PhD candidate at MIT and James A. Robinson is a professor of public policy at the University of Chicago.

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