Political Regime Changes, Crises and Growth in Historical Perspective
Open AccessThe dissertation contributes to the literature on the anatomy of the relationship between institutions and growth by examining the role political regime changes play in predicting the onstart of growth "takeoffs" - significant turning points in a country's growth history. The link between institutions and growth is investigated further by examining the cross-country "political spillover" effects and their possible impact on growth. In addition, the dissertation takes a new look at the link between financial crises and the countries' long-term growth outcomes. Chapter 1 examines whether political regime changes as well as the quality of political institutions help predict the onstart of growth takeoffs. In this chapter I show that controlling for various economic factors, both democratic and autocratic regime changes are significant predictors of the takeoff initiation. This effect, however, is non-linear as I find evidence that countries with low income per capita levels benefit less from positive regime changes.Chapter 2 investigates why democratic transitions are often associated with vastly different economic outcomes. I examine the possibility of cross-country "political spillovers", testing in particular whether countries surrounded by relatively more autocratic neighbors also experience a more difficult economic adjustment process following democratization. Using the pooled mean group estimator methodology of Pesaran, Shin and Smith (1999) I find evidence that for countries which have experienced democratization, moving away from their neighborhoods on the political spectrum implies slower GDP per capita growth in the long run. Chapter 3 examines the association between different types of financial crises and the country's long-term growth. I find that currency crises are significant positive predictors of growth takeoffs, especially in the post World War II period. The currency crises episodes, however, were reducing the probability of growth takeoffs during the Gold Standard era. In addition, I find evidence in favor of the hypothesis that the prompt return to the original parity with gold following a currency crises - the so called "resumption rule" of the Gold Standard era may have contributed to the dampening of the economic activity in the long run.
- All rights reserved
Notice to Authors
If you are the author of this work and you have any questions about the information on this page, please use the Contact form to get in touch with us.