'Democracy, What Is It Good For?'

Democracy is good for growth:

Democracy, What Is It Good For?, by Daron Acemoglu and James Robinson: ...[There is] a consensus engulfing both academia and the popular press that democracy is at its best irrelevant for growth, and perhaps even a hindrance. ...

A recent survey of the recent literature ... concludes:

The net effect of democracy on growth performance cross-nationally over the last five decades is negative or null.

... Our paper ... (joint with Suresh Naidu and Pascual Restrepo) is out, and as the title suggests “Democracy Does Cause Growth, it sharply disagrees with this consensus. ...

Our baseline estimates suggest that a country that democratizes increases its GDP per capita by about 20% in the next 20-30 years. Not a trivial effect at all. ...

In all, the evidence seems to be fairly clear that democracy is good for economic growth.

Why? This is a harder question to answer. Our evidence shows that democracies are better at implementing economic reforms, and also increase education. They also probably increase the provision of public goods (though the evidence here is a little less robust).

But none of this is conclusive evidence. ...