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Who does better for the economy? Presidents versus parliamentary democracies

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  • Richard McManus

    (Canterbury Christ Church University)

  • F. Gulcin Ozkan

    (University of York)

Abstract

Are certain forms of government associated with superior economic outcomes? This paper attempts to answer that question by examining how government systems influence macroeconomic performance. We find that presidential regimes consistently are associated with less favorable outcomes than parliamentary regimes: slower output growth, higher and more volatile inflation and greater income inequality. Moreover, the magnitude of the effect is sizable. For example, annual output growth is between 0.6 and 1.2 percentage points lower and inflation is estimated to be at least four percentage points higher under presidential regimes relative to those under parliamentary ones. The difference in distributional outcomes is even starker; income inequality is 12 to 24% worse under presidential systems.

Suggested Citation

  • Richard McManus & F. Gulcin Ozkan, 2018. "Who does better for the economy? Presidents versus parliamentary democracies," Public Choice, Springer, vol. 176(3), pages 361-387, September.
    • Handle: RePEc:kap:pubcho:v:176:y:2018:i:3:d:10.1007_s11127-018-0552-2
    DOI: 10.1007/s11127-018-0552-2
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    Cited by:

    1. Carola Conces Binder, 2021. "Political Pressure on Central Banks," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(4), pages 715-744, June.
    2. Rajeev K. Goel & Michael A. Nelson, 2021. "Direct and indirect influences of political regimes on corruption," Social Science Quarterly, Southwestern Social Science Association, vol. 102(4), pages 1569-1589, July.
    3. Ceyhun Elgin & Colin C. Williams & Gamze Oz‐Yalaman & Abdullan Yalaman, 2022. "Fiscal stimulus packages to COVID‐19: The role of informality," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(4), pages 861-879, May.
    4. Sutirtha Bagchi & Matthew J. Fagerstrom, 2023. "Wealth inequality and democracy," Public Choice, Springer, vol. 197(1), pages 89-136, October.
    5. Neha B. Upadhayay, 2020. "Are only men fighting trade wars? Empirical evidence from the Temporary Trade Barriers (TTB) data," Erudite Working Paper 2020-03, Erudite.
    6. Neha Bhardwaj Upadhayay, 2020. "Uncovering the proliferation of contingent protection through channels of retaliation, gender and development assistance," Erudite Ph.D Dissertations, Erudite, number ph20-02 edited by Julie Lochard & Catherine Bros.
    7. Rajeev K. Goel & Michael A. Nelson, 2020. "Presidential Versus Parliamentary Systems: Where Do Female Entrepreneurs Thrive?," Social Science Quarterly, Southwestern Social Science Association, vol. 101(5), pages 1773-1788, September.
    8. Rajeev K. Goel & Michael A. Nelson, 2023. "Which political regimes foster entrepreneurship? An international examination," The Journal of Technology Transfer, Springer, vol. 48(1), pages 126-146, February.

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    More about this item

    Keywords

    Constitutional economics; Form of government; Economic growth; Inflation; Income inequality;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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