Democracy and Regulatory Reforms

32 Pages Posted: 6 Nov 2013

See all articles by Mohammad Amin

Mohammad Amin

World Bank - Enterprise Analysis Unit

Simeon Djankov

London School of Economics & Political Science (LSE); Peter G. Peterson Institute for International Economics

Date Written: November 4, 2013

Abstract

We use a sample of 144 countries over the period 2003-2013 to investigate the link between democracy and regulatory reforms. Democracy may be conducive to reform, as politicians embrace growth-enhancing reforms to win elections. On the other hand, authoritarian regimes may not worry as much about public opinion and could undertake reforms that are painful in the short run but bring long-term benefits. We test these alternative hypotheses, using data on regulatory reforms from the World Bank’s Doing Business database. The results provide some support for the hypothesis that democracy is good for regulatory reforms. We also show that reforms are more likely just after parliamentary elections in poor and middle-income countries, thus providing further support for the democracy-reforms nexus.

Keywords: Democracy, Elections, Regulation, Reforms

JEL Classification: P11, P16, K20, L51

Suggested Citation

Amin, Mohammad and Djankov, Simeon, Democracy and Regulatory Reforms (November 4, 2013). Available at SSRN: https://ssrn.com/abstract=2349979 or http://dx.doi.org/10.2139/ssrn.2349979

Mohammad Amin

World Bank - Enterprise Analysis Unit ( email )

2121 Pennsylvania Avenue, NW
Washington, DC 20433
United States

Simeon Djankov (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

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