The Business Case for Democracy

26 Pages Posted: 14 Oct 2020

See all articles by Carl Henrik Knutsen

Carl Henrik Knutsen

University of Oslo - Department of Political Science

Date Written: October 2020


I present a business case for democracy, focusing on the impact of democracy on economic growth. This relationship is widely studied, and results are less clear for growth than many other development outcomes such as literacy or infant mortality. I discuss four factors pertaining to data quality and modelling choices, suggesting that several previous studies have underestimated the growth-benefits of democracy. I also discuss the relationship between democracy and economic crises and variation in economic performance. By mitigating abysmal economic outcomes and ensuring more stable performance, democracy is generally of benefit to risk-averse entrepreneurs, investors, workers, and consumers alike.

Suggested Citation

Knutsen, Carl Henrik, The Business Case for Democracy (October 2020). V-Dem Working Paper 111, Available at SSRN: or

Carl Henrik Knutsen (Contact Author)

University of Oslo - Department of Political Science ( email )

Moltke Moesvei 31
Olso, 0851

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