The Effects of Democracy on Economic Growth and Inequality: A review

Abstract

What effects does political democracy have on such development outcomes as economic growth and socioeconomic equality? Competing theoretical models have been proposed that represent each of the possibilities: democracy as facilitating development, democracy as a hindrance to development, and democracy as bearing no independent relationship to development outcomes. Each of these theoretical models is explicated and, then, the evidence from quantitative, cross-national tests of the effects is reviewed. Overall, the evidence provided by the approximately dozen studies for each outcome yields few robust conclusions with respect to the theoretical models. To guide in the evaluation of the evidence, the studies are in turn distinguished by such design characteristics as sample, period observed, measures used, and form of relationship specified. This procedure, while it does not produce definitive support for any of the models, does assist in interpreting the results of past research as well as generating fertile guidelines for future research. © 1990 Springer.