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Democracy and Growth: Evidence of a new measurement

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  • Krieger, Tommy
  • Gründler, Klaus

Abstract

We present a novel approach for measuring democracy based on Support Vector Machines, a mathematical algorithm for pattern recognition. The Support Vector Machines Democracy Index (SVMDI) is continuous on the 0-1-interval and enables very detailed and sensitive measurement of democracy for 185 countries in the period between 1981 and 2011. Application of the SVMDI highlights a robust positive relationship between democracy and economic growth. We argue that the ambiguity in recent studies mainly originates from the lack of sensitivity of traditional democracy indicators. Analyzing transmission channels through which democracy exerts its influence on growth, we conclude that democratic countries have better educated populations, higher investment shares, and lower fertility rates, but not necessarily higher levels of redistribution.

Suggested Citation

  • Krieger, Tommy & Gründler, Klaus, 2016. "Democracy and Growth: Evidence of a new measurement," VfS Annual Conference 2016 (Augsburg): Demographic Change 145720, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc16:145720
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    References listed on IDEAS

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    Cited by:

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    More about this item

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

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