Democracy, governance, and economic performance : theory and evidence / Yi Feng.

Format:

Book

Author/Creator:

Feng, Yi, 1956-

Language:

English

Subjects (All):

Democracy--Economic aspects.

Democracy.

Economic development--Political aspects.

Economic development.

Political science--Economic aspects.

Political science.

Physical Description:

xvii, 383 pages : illustrations ; 24 cm

Place of Publication:

Cambridge, Mass. : MIT Press, [2003]

Summary:

In this book Yi Feng combines political and economic analyses to study the effects of political institutions on economic performance. Traditionally, political scientists disregard details of economic conditions, while economists may not take into consideration a systematic explanation of political regimes. The growing interest in the interplay of political and economic systems, spurred by the political democratization and economic liberalization evident in many countries over the last twenty years, merits this new perspective.

The book examines the political determinants of economic growth, and, specifically, the controversial question of the relationship between democracy and quality of life. Feng systematically studies three variables of a political system -- political freedom, political stability, and policy certainty -- and relates them to economic development. He examines the political factors that may affect patterns of growth directly or indirectly.

Combining theory and country-specific case studies, Democracy, Governance, and Economic Performance demonstrates that political institutions and conditions do matter in economic growth. After establishing a theoretical foundation, Feng tests it by examining the direct effects of the three key political variables on economic growth and the indirect effects of democracy in terms of other variables (political instability, inflation, investment, education, income distribution, property rights, and population growth). He concludes by considering the policy implications of these results.

Contents:

1.2 A Basic Puzzle 3

1.3 An Analytical Structure 9

2 The Fundamental Political Environment for Economic Growth 15

2.1 The Basic Model 16

2.2 A Theoretical Discussion 21

2.3 Some Casual Observations 28

3 Measuring Political Freedom, Stability, and Certainty 39

3.1 Political Freedom and Liberal Democracy 40

3.2 Political Stability/Instability 51

3.3 Policy Certainty/Uncertainty 57

3.4 Joint Examination of Freedom, Stability, and Certainty 60

4 Testing the Political Determinants of Long-Run Economic Growth 65

4.1 Methodology 66

4.2 The Statistical Model 69

4.3 Empirical Results 73

4.4 Continental Effects 82

4.5 A Case Study: Thailand 86

5 Democracy, Stability, and Growth: A Simultaneous Approach 93

5.1 A Simultaneous-Equations Model 95

5.2 Data and Specification 103

5.3 Empirical Analysis: Three Sets of Nested Relationships 109

6 Political Institutions and Inflation: An Evaluation of Three Models 123

6.1 Political Freedom, Stability, and Capacity: Three Models 126

6.2 Preliminary Empirical Evidence 136

6.3 Model Specification and Data 141

6.4 Empirical Evidence 147

7 Political Institutions and Private Investment 157

7.1 The Political Environment of Private Investment 158

7.2 Specification and Data 169

7.3 Empirical Evidence: Domestic Private Investment 174

7.4 Empirical Evidence: Foreign Direct Investment 180

8 The Political Economy of Human-Capital Accumulation 189

8.1 Political Systems, Political Stability, and Human Capital 190

8.2 Measurement of Human Capital 198

8.3 Some Preliminary Data on Education and Democracy 203

8.4 Model Specification 205

8.5 Empirical Analysis 207

9 Democracy and Income Inequality Reconsidered 213

9.1 Theories and Findings on Democracy and Income Distribution 214

9.2 Measurement Issues 224

9.3 Model Specification 228

9.4 Empirical Evidence 241

10 Political Freedom and Economic Freedom 251

10.2 Literature Review 255

10.3 Method and Data 260

10.4 Empirical Results 263

10.5 A Case Study: Indonesia 268

11 Births and Politics 275

11.1 Literature Review 276

11.2 A Political-Economic Model 279

11.3 Empirical Results 281

11.4 A Case Study: China 283

12.1 Summaries of Major Findings 296

12.2 Some Policy Implications 299

12.3 Related and Future Research 307

Appendix 3.A Political-Rights and Civil-Liberties Indices 313

Appendix 3.B Institutionalized Democracy Index 315

Appendix 4.A A Brief Review of the Literature on Democracy, Stability, and Growth 319

Appendix 7.A Weighted Scores in the World-Event Interaction Survey Data Set 323

Appendix 9.A Coverage of Income Distribution by the Gini Coefficient 327

Appendix 10.A Measures of Economic Freedom 331.

Notes:

Includes bibliographical references (pages [333]-377) and index.

ISBN:

0262062356

OCLC:

50774269