BY: HEITOR ALMEIDA
New York University
Stern School of Business, Finance
DANIEL FERREIRA
University of Chicago, Department of Economics
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=303285
Date: March 5, 2002
Contact: HEITOR ALMEIDA
Email: Mailto:halmeida at stern.nyu.edu
Postal: New York University
Stern School of Business, Finance
Room 9-190
44 West 4th Street
New York, NY 10012-1126 UNITED STATES
Phone: 212-998-0279
Fax: 212-995-4233
Co-Auth: DANIEL FERREIRA
Email: Mailto:dsferrei at midway.uchicago.edu
Postal: University of Chicago, Department of Economics
1126 East 59th Street
Chicago, IL 60637 UNITED STATES
ABSTRACT:
Sah (1991) conjectured that more centralized societies should
have more volatile performances than less centralized ones. We
show in this paper that this is true both for cross-country and
within-country variability in growth rates. It is also true for
some measures of policies. Finally, we show that both the best
and worst performers in terms of growth rates are more likely to
be autocracies. These empirical results are unaffected by many
robustness and specification checks. We argue that the evidence
in the paper is consistent with the theoretical implications in
Sah and Stiglitz (1991) and Rodrik (1999). The greater stability
of growth rates and policy measures among democratic countries
adds to an existing list of desirable features of democracies.
Our evidence also corroborates the common view that some
autocratic countries had the most impressive growth experiences.
However, since the worst experiences are also associated with
autocratic countries, in an ex-ante sense autocracy is no
prescription for growth.
Keywords: Democracy, autocracy, growth, variability,
fallibility, centralization of decision-making