28 Pages Posted: 14 Jun 2015
Date Written: June 13, 2015
Previous studies have argued that democracy diminishes the extent to which contests over political leadership depress economic growth, by reducing the violence and uncertainty attendant on such contests. We reconsider the theoretical basis for this claim, highlighting the separate roles of executive constraint and electoral accountability. Exploiting panel data from 1850-2005, we show that the executive’s horizontal accountability to the legislature significantly moderates the economic downturns associated with leadership turnover, while its vertical accountability to the electorate does not. These results suggest that, in terms of moderating succession-related downturns and thereby promoting steadier economic growth, the health of legislatures is more important than the health of elections.
Keywords: Democracy, elections, executive constraints, political stability, economic growth
JEL Classification: H11, O57
Suggested Citation: Suggested Citation
Cox, Gary W. and Weingast, Barry R., Executive Constraint, Political Stability and Economic Growth (June 13, 2015). Available at SSRN: https://ssrn.com/abstract=2618059 or http://dx.doi.org/10.2139/ssrn.2618059