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Democracy and institutional quality: Theory and Evidence

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  • Krieger, Tommy

Abstract

We present a simple model that illustrates how democracy may improve the quality of economic institutions. The model further suggests that institutional quality varies more across autocracies than across democracy and that the positive effect of democracy on institutional quality is increasing in people's human capital. Using a new panel data set, covering 140 countries and the period from 1920 to 2015, and different measures of institutional quality, we present results from fixed effect and two-stage least squares regressions that confirm the predictions of our model.

Suggested Citation

  • Krieger, Tommy, 2019. "Democracy and institutional quality: Theory and Evidence," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203507, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc19:203507
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    Cited by:

    1. Ezcurra, Roberto & Zuazu, Izaskun, 2019. "Political equality and quality of government," MPRA Paper 96476, University Library of Munich, Germany.
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    3. Roberto Ezcurra & Izaskun Zuazu, 2022. "Political equality and quality of government," Kyklos, Wiley Blackwell, vol. 75(2), pages 269-293, May.

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    More about this item

    Keywords

    Democracy; Development; Economic Institutions; Human Capital; Institutional Quality; Political Economy; Political Transitions; Private Property Rights;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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