Democracy and Reforms

43 Pages Posted: 2 Mar 2009  

Paola Giuliano

University of California, Los Angeles (UCLA) - Anderson School of Management; IZA Institute of Labor Economics

Prachi Mishra

International Monetary Fund (IMF) - Research Department

Antonio Spilimbergo

International Monetary Fund (IMF) - Research Department; Centre for Economic Policy Research (CEPR); University of Michigan at Ann Arbor - The William Davidson Institute

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Abstract

Empirical evidence on the relationship between democracy and economic reforms is scarce, limited to few reforms and countries and for few years. This paper studies the impact of democracy on the adoption of economic reforms using a new dataset on reforms in the financial, capital, public, and banking sectors, product and labor markets, agriculture, and trade for 150 countries over the period 1960-2004. Democracy has a positive and significant impact on the adoption of economic reforms but there is no evidence that economic reforms foster democracy. Our results are robust to the inclusion of a large variety of controls and estimation strategies.

Keywords: economic liberalization, transition, political economy

JEL Classification: O57, E6

Suggested Citation

Giuliano, Paola and Mishra, Prachi and Spilimbergo, Antonio, Democracy and Reforms. IZA Discussion Paper No. 4032. Available at SSRN: https://ssrn.com/abstract=1351195

Paola Giuliano (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Prachi Mishra

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Antonio Spilimbergo

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6346 (Phone)
202-623-6336 (Fax)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

University of Michigan at Ann Arbor - The William Davidson Institute ( email )

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

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