Does democracy lower growth volatility? A dynamic panel analysis

Yang, Benhua

doi:10.1016/j.jmacro.2007.02.005

Cited by 38 publications

(20 citation statements)

References 21 publications

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“…Our findings point to clear evidence that democracy have a negative impact on economic growth in MENA countries. Our result is consistent with previous literature (Tavares and Wacziang 2001;Kurzman et al 2002;Doucouliagos and Ulubasoglu 2008;Tanga and Yung 2008;Yang 2008;Collier and Hoeffler 2009;Narayan et al 2011;Aisen and Veiga 2013). The negative impact of decomcracy on growth can be explained Emirates, the level of democracy is lower but the growth rate is higher.…”

Section: Empirical Studysupporting

confidence: 93%

“…They, also, find a statistically significant long-run relationship running from democratization to growth, which can be either positive or negative. Yang (2008), based on empirical analysis for a sample of 138 countries over the 1968-2002 period, concludes that in countries with high degrees of ethnic heterogeneity, democracy appears to significantly reduce growth volatility and in countries with low degrees of ethnic diversity such a relationship is not significant. Collier and Hoeffler (2009) found, that in developing countries, the combination of resource rents and democracy (measured by Polity IV) has been significantly growth-reducing.…”

Section: Review Of Related Literaturementioning

confidence: 99%

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Democracy and Economic Growth: Evidence in MENA Countries

Rachdi

Saidi

2015

Procedia - Social and Behavioral Sciences

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The debate on the effect of democracy on economic growth has been comprehensively growing since 1980s in theoretical and empirical literature. The existing literature provides conflicting views of this relationship. For this reason, the aim of this paper is therefore to empirically investigate this relationship in 17 MENA countries over the period 1983-2012. We explore this relationship by using fixed (FE)/random (RE) effects and generalized method of moments (GMM) system approaches. We show that a priori the sign of the effect is ambiguous. The major empirical is that democracy, measured by Institutionalized Democracy Score, Institutionalized Autocracy Score, Competitiveness of Executive Recruitment, Openness of Executive Recruitment and Executive Constraints have a robust and negative impact on growth in MENA countries.

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Section: Empirical Studysupporting

confidence: 93%

Section: Review Of Related Literaturementioning

confidence: 99%

Democracy and Economic Growth: Evidence in MENA Countries

Rachdi

Saidi

2015

Procedia - Social and Behavioral Sciences

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“…The lagged output per capita growth volatility is included to capture the inertia in the dependent variable (Yang, 2008a). The matrix of standard control variables includes the following variables.…”

Section: Modelsmentioning

confidence: 99%

Do remittances dampen the effect of natural disasters on output growth volatility in developing countries?

Combes

Ebeke

2013

Applied Economics

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This article examines whether or not remittance inflows help mitigate the effects of natural disasters on the volatility of the real output per capita growth rate. Using a large sample of developing countries and mobilizing a dynamic panel data framework, it uncovers a diminishing macroeconomic destabilizing consequence of natural disasters as remittance inflows rise. It appears that the effect of natural disasters disappears for a remittance ratio above 8% of the Gross Domestic Product (GDP). However, remittances aggravate the destabilizing effects of natural disasters when they exceed 17% of the GDP. Finally, the article shows that current and lagged remittance inflows significantly reduce the number of people killed by natural disasters and the number of people affected, respectively.

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“…In contrast to previous work computing volatility over a fixed time period such as 20 years or 5 years (e.g., Acemoglu et al, 2003;Kose et al, 2003, Bekaert et al, 2006Yang, 2008), this paper measures volatility over a five-year moving window. Such a moving standard deviation measure has been used in studying the stock market volatility (see, for example, Arestis et al, 2001), and though not perfect, serves our purpose well since we intend to compare the differences before and after the liberalization on a yearly basis and countries do not liberalize at the same time.…”

Section: Datamentioning

confidence: 99%

“…This study is also motivated by a main shortcoming of the volatility measure used in previous studies, in which volatility is proxied by the standard deviation of the annual growth rate of real GDP per capita over a long time period such as 10 years. As pointed out by Yang (2008) and Malik and Temple (2009), such a measure masks substantial year-to-year volatility and hence may confound the volatility effects. In addition, over the last 30 years the world has seen a decline in growth volatility Malik and Temple, 2009), failure to control this time effect properly may lead to a spurious negative association between democracy and volatility.…”

Section: Introductionmentioning

confidence: 99%