Democracy, Economic Growth and Techno-economic Change - Empirical Evidence for Neglected Indirect Effects

Abstract

The relationship between democracy and growth has been extensively debated by a number of scholars, and while the number of studies on the growth effects of democracy grows, the picture seems to get increasingly blurred, not clear: in contrast to. earlier findings, most of the results presented through the 1990s (but all covering earlier data) showed no or even a negative effect of democracy on growth. Through all theses studies, democracy has been discussed only as a single variable concept, often controlling for other societal measures as human capital or political stability. But as we know (and the data show), democratic institutions give rise to a number of societal developments, including education and political conflict resolution, which may foster economic development as well. The paper studies these indirect effects of democracy.