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Democracy, State Capacity, and Economic Growth

Author

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  • Knutsen, Carl Henrik
Abstract
This paper discusses how regime type and state capacity may interact in affecting economic growth. The empirical analysis finds a positive and robust effect of democracy on growth in Sub-Saharan Africa, a continent historically characterized by weak-capacity states. Furthermore, the paper identifies a robust interaction effect between democracy and state capacity on growth, both in Africa and globally; the effect of democracy on growth increases when state capacity is reduced. Democracy is estimated to have a positive effect on growth in weak-capacity states, but not in high-capacity states. Additionally, the results indicate that state capacity enhances growth only in dictatorships.

Suggested Citation

  • Knutsen, Carl Henrik, 2013. "Democracy, State Capacity, and Economic Growth," World Development, Elsevier, vol. 43(C), pages 1-18.
    • Handle: RePEc:eee:wdevel:v:43:y:2013:i:c:p:1-18
    DOI: 10.1016/j.worlddev.2012.10.014
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    References listed on IDEAS

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