B.J.Pol.S. 36, 317–340 Copyright  2006 Cambridge University Press doi:10.1017/S0007123406000172 Printed in the United Kingdom Democracy and Economic Growth: How Regional Context Influences Regime Effects JONATHAN KRIECKHAUS* There is ongoing controversy as to whether political democracy inhibits or facilitates national economic growth. It is argued here that the answer to this question depends greatly on the regional political context within which democracy functions. In regions where social groups clamour for redistribution, as in Latin America, democracy may lead to populism and poor economic performance. Similarly, in regions where state elites are generally committed to promoting rapid industrialization, as in parts of Asia, democratic pressures may impede effective economic policy. However, in regions where patrimonialism is chronic, as in Sub-Saharan Africa, democracy may provide a useful mechanism for evicting grossly corrupt politicians and may therefore facilitate higher rates of economic growth. These regional arguments are tested statistically here and show that democratic governance constrains growth in Latin America and Asia yet facilitates growth in Africa. Sensitivity analyses indicate that these findings are fairly robust. Does political democracy influence national economic growth rates? Few questions in comparative politics have attracted so much attention. After all, democracy is perhaps the most significant political advance of the twentieth century and there can be little question but that economic growth is a central policy goal of modern states. Any causal link between democracy and growth would have enormous implications. In the 1960s and 1970s, for instance, it was common to condone authoritarian rule by arguing that there is an inherent trade-off between democracy and economic growth. There is now an enormous literature on the ‘regime debate’. 1 While the first generation of scholars found a trade-off between democracy and growth, by the 1980s many studies were concluding exactly the opposite, namely that democracy facilitates growth. The most recent wave of statistical studies has generally yielded null findings. Given such varied findings, and the recent prevalence of null findings, most scholars have concluded that democracy has no clear effect on growth one way or another. 2 My point of departure in this article is that although the statistical literature provides little evidence of regime effects, the case-study literature continues to suggest that democracy heavily influences economic growth. Specifically, many scholars of both Latin America and Asia have continued to argue that democracy inhibits growth, while scholars * Department of Political Science, University of Missouri-Columbia. The author thanks Cooper Drury, Patrick James, Christine Lipsmeyer, Marvin Overby and anonymous reviewers for their valuable suggestions; and also Jason Wells for his expert research assistance. 1 Fully forty-eight studies are reviewed in Charles Kurzman, Regina Werum and Ross E. Burkhart, ‘Democracy’s Effect on Economic Growth: A Pooled Time-Series Analysis, 1951–1980’, Studies in Comparative International Development, 37 (2002), 3–33. For good literature reviews, see Larry Sirowy and Alex Inkeles, ‘The Effects of Democracy on Economic Growth and Inequality: A Review’, Studies in Comparative International Development, 25 (1990), 126–57; Adam Przeworski and Fernando Limongi, ‘Political Regimes and Economic Growth’, Journal of Economic Perspectives, 7 (1993), 51–69. 2 Prominent examples include John F. Helliwell, ‘Empirical Linkages between Democracy and Economic Growth’, British Journal of Political Science, 24 (1994), 225–48; Adam Przeworski, Michael E. Alvarez and Jose ´ Antonio Cheibub, Democracy and Development: Political Institutions and Well-Being in the World, 1950–1990 (Cambridge: Cambridge University Press, 2000).