CFDP 2281R

Curse of Democracy: Evidence from the 21st Century


Publication Date: April 2021

Revision Date: August 2021

Pages: 50


Democracy is widely believed to contribute to economic growth and public health. However, we find that this conventional wisdom is no longer true and even reversed; democracy has persistent negative impacts on GDP growth since the beginning of this century. This finding emerges from five different instrumental variable strategies. Our analysis suggests that democracies cause slower growth through less investment, less trade, and slower value-added growth in manufacturing and services. For 2020, democracy is also found to cause more deaths from Covid-19.

Keywords: Democracy, Economic Growth, Public Health, Causality

See CFDP Version(s): CFDP 2281
PDF icon d2281-r.pdf