Relationship Between Democracy And Economic Growth

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Economic growth of a country is something that depends on a number of factors. In this dissertation, I will investigate the effect of democracy and political freedom on economic growth. Both democracy and autocracy have various examples of leading countries to economic growth as well as deterioration of the economy. Along with the nature of the political regime in the nation there are several other factors that influence economic growth in a country. I will also look in detail at the effects of these variables on growth and will also later isolate their effects since the direct relationship between political regime and growth can be established. Looking at non democracy in countries such as China and the Arab countries, one may feel that democratic institutions are not important for economic growth. Some may even go ahead and term it as a disturbance in the path of growth, for instance in a paper written by Daren Acemoglu et al titled “Democracy Does Cause Growth”, the authors described the view that some consider democracy a hindrance. Robert Barro presents the academic view on the issue and says that the key lesson to be learnt is that democracy is not a key to growth and neither do more political rights mean that there are more chances of economic growth (Barro 1997, pp. 1 and 11). The literature written with regards to the relationship between democracy and growth mainly suggests that there is a relationship in existence. Robert J Barro published a paper in 1996 where he

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