Does democracy facilitate economic growth or does economic growth facilitate democracy? an empirical study of Sub-Saharan Africa

Narayan, Paresh Kumar, Narayan, Seema and Smyth, Russell 2005, Does democracy facilitate economic growth or does economic growth facilitate democracy? an empirical study of Sub-Saharan Africa, Journal of African economies.

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Title Does democracy facilitate economic growth or does economic growth facilitate democracy? an empirical study of Sub-Saharan Africa
Author(s) Narayan, Paresh Kumar
Narayan, Seema
Smyth, Russell
Journal name Journal of African economies
Total pages 40
Publisher Oxford University Press
Place of publication Oxford, England
Publication date 2005
ISSN 0963-8024
1464-3723
Keyword(s) causality
democracy
economic Growth
sub-Saharan Africa
Summary This paper examines the relationship between democracy and economic growth in 30 Sub-Saharan African countries. As our proxy for democracy we first use the democracy index constructed by Freedom House and then check the sensitivity of our findings using, as an alternative proxy for democracy, the Legislative Index of Electoral Competitiveness (LIEC). We find support for the Lipset hypothesis - in the long run, real GDP Granger causes democracy and an increase in GDP results in an improvement in democracy ??? in Botswana and Niger with both datasets, for Chad with the Freedom House data only and for Cote d???Ivoire and Gabon with the LIEC data only. Support for the compatibility hypothesis - in the long run democracy Granger causes real income and an increase in democracy has a positive effect on real income - is found for Botswana with the Freedom House data and for Madagascar, Rwanda, South Africa and Swaziland with the LIEC data. Support for the conflict hypothesis - in the long run democracy Granger causes real income and an increase in democracy has a negative effect on real income - is found for Gabon with the Freedom House data and Sierra Leone with the LIEC data.
Language eng
Field of Research 140209 Industry Economics and Industrial Organisation
HERDC Research category C1.1 Refereed article in a scholarly journal
Copyright notice ©2007, Paresh Kumar Narayan, Seema Narayan and Russell Smyth
Persistent URL http://hdl.handle.net/10536/DRO/DU:30024740

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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