Democratisation and Growth

32 Pages Posted: 19 Sep 2008

See all articles by Elias Papaioannou

Elias Papaioannou

Dartmouth College - Department of Economics

Gregorios Siourounis

London Business School


This article challenges cross-sectional findings that democracy has a negligible effect on growth. We employ a new dataset of political transitions during the Third Wave of Democratisation and examine the within effect of democratisation in countries that abandoned autocracy and consolidated representative institutions. The panel estimates imply that on average democratisations are associated with a 1% increase in annual per capita growth. The dynamic analysis reveals that: while during the transition growth is slow, in the medium and long run it stabilises at a higher level. This evidence favours development theories of democratic rule and Friedrich Hayek (1960)s idea that the merits of democracy appear in the long run.

Suggested Citation

Papaioannou, Elias and Siourounis, Gregorios, Democratisation and Growth. Economic Journal, Vol. 118, No. 532, pp. 1520-1551, October 2008. Available at SSRN: or

Elias Papaioannou (Contact Author)

Dartmouth College - Department of Economics ( email )

Hanover, NH 03755
United States

Gregorios Siourounis

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

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