Democracy and the Variability of Economic Performance

54 Pages Posted: 18 Mar 2002

See all articles by Heitor Almeida

Heitor Almeida

University of Illinois at Urbana-Champaign; National Bureau of Economic Research (NBER)

Daniel Ferreira

London School of Economics - Department of Finance; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: March 5, 2002


Sah (1991) conjectured that more centralized societies should have more volatile performances than less centralized ones. We show in this paper that this is true both for cross-country and within-country variability in growth rates. It is also true for some measures of policies. Finally, we show that both the best and worst performers in terms of growth rates are more likely to be autocracies. These empirical results are unaffected by many robustness and specification checks. We argue that the evidence in the paper is consistent with the theoretical implications in Sah and Stiglitz (1991) and Rodrik (1999). The greater stability of growth rates and policy measures among democratic countries adds to an existing list of desirable features of democracies. Our evidence also corroborates the common view that some autocratic countries had the most impressive growth experiences. However, since the worst experiences are also associated with autocratic countries, in an ex-ante sense autocracy is no prescription for growth.

Keywords: Democracy, autocracy, growth, variability, fallibility, centralization of decision-making

JEL Classification: P16, P51, O40, O50, H11

Suggested Citation

Almeida, Heitor and Ferreira, Daniel, Democracy and the Variability of Economic Performance (March 5, 2002). Available at SSRN: or

Heitor Almeida (Contact Author)

University of Illinois at Urbana-Champaign ( email )

515 East Gregory Drive
4037 BIF
Champaign, IL 61820
United States
217-3332704 (Phone)


National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Daniel Ferreira

London School of Economics - Department of Finance ( email )

Houghton Street
London, WC2A 2AE
United Kingdom
(+44) 20 7955 7544 (Phone)


European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels


Centre for Economic Policy Research (CEPR) ( email )

United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics