NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Democracy, Technology, and Growth

Philippe Aghion, Alberto Alesina, Francesco Trebbi

NBER Working Paper No. 13180
Issued in June 2007
NBER Program(s):   POL   EFG

We explore the question of how political institutions and particularly democracy affect economic growth. Although empirical evidence of a positive effect of democracy on economic performance in the aggregate is weak, we provide evidence that democracy influences productivity growth in different sectors differently and that this differential effect may be one of the reasons of the ambiguity of the aggregate results. We provide evidence that political rights are conducive to growth in more advanced sectors of an economy, while they do not matter or have a negative effect on growth in sectors far away from the technological frontier. One channel of explanation goes through the beneficial effects of democracy and political rights on the freedom of entry in markets. Overall, democracies tend to have much lower entry barriers than autocracies, because political accountability reduces the protection of vested interests, and entry in turn is known to be generally more growth-enhancing in sectors that are closer to the technological frontier. We present empirical evidence that supports this entry explanation.

download in pdf format
   (824 K)

email paper

This paper is available as PDF (824 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w13180

Users who downloaded this paper also downloaded these:
Persson and Tabellini w13150 The Growth Effect of Democracy: Is It Heterogenous and How Can It Be Estimated?
Helliwell w4066 Empirical Linkages Between Democracy and Economic Growth
Barro w4909 Democracy & Growth
Persson w11171 Forms of Democracy, Policy and Economic Development
Acemoglu, Johnson, Robinson, and Yared w11205 Income and Democracy
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us