Democracy Does Cause Growth: Comment

34 Pages Posted: 16 Apr 2019

See all articles by Markus Eberhardt

Markus Eberhardt

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP)

Date Written: April 2019

Abstract

I revisit the causal relationship between democracy and growth as recently studied in Acemoglu, Naidu, Restrepo, and Robinson (2019, ANRR). I demonstrate the sensitivity of their results to sample selection by dropping a small number of observations in a non-random fashion and use these findings to motivate a generalisation of their empirical approach. My own analysis relaxes the assumption of (i) a common democracy-growth relationship, and of (ii) the absence of strong cross-section correlation. Adopting novel methods for policy evaluation I find a robust positive long-run effect of democracy albeit with only around half the magnitude of that found in ANRR.

Keywords: democracy, Difference-in-Difference Estimator, growth, Interactive Fixed Effects, Political development, Spillovers

JEL Classification: O10, P16

Suggested Citation

Eberhardt, Markus, Democracy Does Cause Growth: Comment (April 2019). CEPR Discussion Paper No. DP13659, Available at SSRN: https://ssrn.com/abstract=3372858

Markus Eberhardt (Contact Author)

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP) ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

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