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Democracy, Institutional Maturity, and Economic Development

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  • Uk Heo
  • Sung Deuk Hahm

Abstract

type="main"> Despite a plethora of studies on the relationship between democracy and economic development, a dominant theoretical framework has yet to emerge. Economic development may lead to the transition to democracy and mature democratic institutions are likely to help economic development. Thus, in this article, we test the relationship among economic development, institutional maturity, and democracy. In a recent study, Gerring et al. (2005) developed a new concept, “democracy stock,” to incorporate institutional maturity. This concept is useful because institutional maturity matters. To address the issue of endogeneity between democracy and economic development, we investigate the relationship using a simultaneous equation method and data from 1950 to 2000. The empirical results show that democracy and economic development affect each other. Economic development not only helps democratization, but it also assists democratic systems to survive and mature. Mature democratic systems do help economic development.

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  • Uk Heo & Sung Deuk Hahm, 2015. "Democracy, Institutional Maturity, and Economic Development," Social Science Quarterly, Southwestern Social Science Association, vol. 96(4), pages 1041-1058, December.
    • Handle: RePEc:bla:socsci:v:96:y:2015:i:4:p:1041-1058
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    File URL: http://hdl.handle.net/10.1111/ssqu.12185
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    5. Akçay Selçuk & Karasoy Alper, 2020. "Determinants of private investments in Turkey: Examining the role of democracy," Review of Economic Perspectives, Sciendo, vol. 20(1), pages 23-49, March.

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