Economic Effects of Democracy. An Empirical Analysis

Rivista di Politica Economica , Vol. XI-XII, pp. 69-116, 2003

48 Pages Posted: 11 Feb 2005  

Francesco Decarolis

Boston University; Einaudi Institute for Economics and Finance (EIEF)

Abstract

This research analyses through the use of instrumental variables estimation whether democracy has an effect on variables belonging to three different categories: fiscal policy, inequality in income distribution and political instability. It shows there is no stable relation between democracy and fiscal policy variables between countries of the sample in the 1978-1988 period. Democracy, on the other hand, significantly affects the difference in middle class income share (positively) and in changes at the top of the executive (negatively).

Keywords: Democracy, Fiscal Policy, Inequality, Event Study, Instrumental Variables

JEL Classification: C21, E62, O15, O17

Suggested Citation

Decarolis, Francesco, Economic Effects of Democracy. An Empirical Analysis. Rivista di Politica Economica , Vol. XI-XII, pp. 69-116, 2003. Available at SSRN: https://ssrn.com/abstract=665287

Francesco Decarolis (Contact Author)

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

HOME PAGE: http://people.bu.edu/fdc/

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Due Macelli, 73
Rome, 00187
Italy

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