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Democracy and Globalization Are not Prerequisites for Higher Income: A Cross Country Analysis

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  • Toshihiko HAYASHI

    (Asia Pacific Institute of Research)

Abstract

This paper reports results from a cross country econometric analyses over 150 countries pertaining to possible correlation between per capita GDP and democracy, corruption, globalization and human development indices. Our findings include 1) of the four indices, the human development index has the strongest influence on per capita GDP and its growth, 2) fighting corruption pays as higher levels of cleanliness and transparency tend to raise per capita GDP, but less so in lower income economies, 3) the globalization index does not show any significant correlation with per capita GDP, and 4) the democracy index is not significantly correlated with per capita GDP or growth. but in some country it can hinder growth. The moral of our investigation is that economic growth does not automatically lead to better democracy, and higher per capita income does not warrant higher level of democracy. Democracy is not a means to higher income, but rather, it is an independent value in itself.

Suggested Citation

  • Toshihiko HAYASHI, 2015. "Democracy and Globalization Are not Prerequisites for Higher Income: A Cross Country Analysis," APIR Discussion Paper Series 1005051, Asia Pacific Institute of Research.
    • Handle: RePEc:aps:wpaper:1005051
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    References listed on IDEAS

    as
    1. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, April.
    2. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
    3. Parisa Samimi & Hashem Salarzadeh Jenatabadi, 2014. "Globalization and Economic Growth: Empirical Evidence on the Role of Complementarities," PLOS ONE, Public Library of Science, vol. 9(4), pages 1-7, April.
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    More about this item

    Keywords

    per capita GDP; Democracy; Corruption; Globalization; Human Development;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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