Sebastian Vollmer - Maria Ziegler
Political Institutions and Human Development: Does Democracy fulfil its “constructive” and “instrumental” role?

Abstract:Institutions are a major field of interest in the study of development processes. We contribute to this discussion concentrating our research on political institutions and their effect on the non-income dimensions of human development. First, we elaborate a theoretical argument why and under what conditions democracies compared to autocratic political systems might perform better with regards to the provision of public goods. Due to higher redistributive concerns matched to the needs of the population democracies should show a higher level of human development – if certain requisites permit their functioning. In the following we analyze whether our theoretical expectations are supported by empirical facts. First, we compare averages of life expectancy and literacy rates and test for significant differences between autocracies and democracies. Second, we estimate the densities of life expectancy and literacy for the respective political systems. After the descriptive part we run cross-country regressions checking whether being democratic has a positive impact on life expectancy controlling for the level of economic development. Finally, we perform a static panel analysis over the period of 1970 to 2003. The last model confirms not only the previous results that living in a democratic system positively affects human development even controlling for GDP. By analyzing interaction effects it also indicates that democracy’s performance itself is affected by the circumstances: i.e. the level of education, of social fragmentation, of income inequality and the distribution of the population within a country.

JEL: I10, I20, H11.
Keywords: human development, institutions, distribution, democracy.



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