The Relationship between Democracy and Economic Growth in Developed and Developing Countries: Panel Data Analysis

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 2

Year of Publication : 2020

Authors : Turgay Munyas

10.14445/23939125/IJEMS-V7I2P107

How to Cite?

Turgay Munyas, "The Relationship between Democracy and Economic Growth in Developed and Developing Countries: Panel Data Analysis," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 2, pp. 43-51, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I2P107

Abstract:

The question of whether there is a positive relationship between democracy and economic growth has always been debated. There are different approaches to this subject. This study was carried out to make a contribution to the debate on this issue. The study aims to investigate the relationship between democracy and economic growth from the perspective of developed and developing countries. In this study, Turkey, India, Brazil, Russia, Mexico, Indonesia, and South Africa were included in the sample group of developing countries, and Germany, France, England, Belgium, Canada, Japan, and Denmark were included in the sample group of the developed countries. The analysis of the study was carried out with panel data analysis. In the developed countries group, a bidirectional causality was found between democracy index and growth. Both variables are influenced by the past values of each other. In the developing countries group, while there was no causality from the democracy index variable to the growth variable, there was a causality from the growth to democracy index variable. Thus, unidirectional causality in the developing countries was obtained. Study findings are discussed in the results section.

Keywords:

Democracy Index, Economic Growth, Economic Development, Panel Data Analysis

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