The Relationship Between Democracy And The Gdp

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Ryan Knox December 1, 2014 Poli Sci 3000 Park The Relationship between Democracy and the GDP Democracy is often touted as the greatest change that a country can go through in order to achieve better financial success and therefore a more prosperous life for its people, so it is important to know what influence democracy has on a country and it’s economic success. After exploring previous investigations between democracy and the economy, and creating an empirical research design to evaluate the relationship between the growth or decline of democracy and the economic well being of the country; the final crucial step is to analyze whether a relationship between the two exists. It is my hypothesis that in evaluating the data, it will…show more content…
As both the independent and dependent variables are continuous, the most efficient method to test relationship is to examine their correlation coefficient using a regression test. Using the data shown in Table 3, I estimated a correlation coefficient of .123. This can be interpreted as showing that a nation’s democratic rating has a weak, positive effect on GDP growth, which can be seen the the scatterplot Figure 5. At first glance this would appear to provide support for our alternate hypothesis that a change in a nation’s democratic rating would have a direct influence on the economic growth of that nation as expressed through GDP. However with a P-value of over .384, which is many times larger than our desired .05, we cannot confidently reject the null hypothesis that there is, in fact, not a relationship between GDP and democratic rating. Though our initial test has appeared to conclusively disprove a relationship between the IV and DV, nothing in the political world exist completely separate from everything else. This means that there always is the possibility that there are outside forces influencing the dependent variable, in addition to the chosen independent, potentially tainting the results of our study and causing erroneous conclusions on the relationship between independent and dependent variables. In order to attempt to counteract these potential outside influences, I have included two control variables in to the
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