Economic Reform, Democracy and Growth During Post-Communist Transition

Fidrmuc, Jan

doi:10.2139/ssrn.279819

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Economic Reform, Democracy and Growth During Post-Communist Transition

39 Pages Posted: 13 Aug 2001

See all articles by Jan Fidrmuc

Jan Fidrmuc

Brunel University - Department of Economics and Finance; University of Angers - Lille - Economics & Management (LEM) - Centre National de la Recherche Scientifique (UMR CNRS 8179); CESifo (Center for Economic Studies and Ifo Institute); Global Labor Organization (GLO); Institute for Strategy and Analysis, Government Office of the Slovak Republic

There are 2 versions of this paper

Date Written: March 2001

Abstract

This paper explores interactions between growth, economic liberalization and democratization during transition. The results can be summarized as follows: (1) Liberalization has a strong positive effect on growth during transition (also when controlling for endogeneity of liberalization in growth). (2) Democracy facilitates economic liberalization. (3) Because of its effect on liberalization, democracy has a positive overall effect on growth. Nevertheless, the marginal effect of democracy (after controlling for progress in economic liberalization) is negative during early transition. (4) The progress in democratization in turn depends on past economic performance in a surprising manner-the relationship between past growth and subsequent democracy appears negative. (5) Economic performance is an important determinant of electoral outcomes and, in particular, of support for reforms.

Keywords: Democracy, liberalization, economic performance, elections

JEL Classification: E63, O11, P26, P27

Suggested Citation: Suggested Citation

Fidrmuc, Jan and Fidrmuc, Jan, Economic Reform, Democracy and Growth During Post-Communist Transition (March 2001). Available at SSRN: https://ssrn.com/abstract=279819 or http://dx.doi.org/10.2139/ssrn.279819