Voice and Growth: Was Churchill Right?
NBER Working Paper No. 9749
The debate over whether political democracy is the least bad regime, as Churchill once said, remains unresolved because history has been ignored or misread, and because recent statistical studies have not chosen the right tests. Using too little historical information, and mistaking formal democratic rules for true voice, has understated the gains from spreading political voice more equally. This paper draws on a deeper history, reinterpreting five key experiences to show how the institutional channels linking voice and growth are themselves evolving with the economy. Up to about the early nineteenth century, the key institutional link was property rights and contract enforcement. Since the early nineteenth century, the human-investment channel has assumed an ever-greater role. This trend will probably continue. A telltale sign of damage to growth from elite rule is the under-investment of public funds in egalitarian human capital especially primary schooling, relative to historical norms for successful economies.
Published: Lindert, Peter H. "Voice And Growth: Was Churchill Right?," Journal of Economic History, 2003, v63(2,Jun), 315-350.