A time to throw stones, a time to reap: How long does it take for democratic reforms to improve institutional outcomes?

This post was written by Pierre-Guillaume Méon & Khalid SekkatCentre Emile Bernheim Université libre de Bruxelles (U.L.B.), on their ongoing research “A time to throw stones, a time to reap: How long does it take for democratic reforms to improve institutional outcomes?

Pierre-Guillaume Méon (Université Libre de Bruxelles)

Pierre-Guillaume Méon (Université Libre de Bruxelles)

Democracy, institutions and growth
The Arab Spring by ousting authoritarian regimes raises hopes and expectations of better wealth and inclusiveness. Scientific analyses show, however, that democratization alone does not guarantee economic success. The better quality of institutions that is expected to follow democratization would improve economic performance, inclusiveness and effective accountability of rulers. While the outcome of the process started by the Arab Spring is still uncertain, studying other processes of democratization around the world may shed light on its potential impact on the quality of institutions in Arab countries.

A number of breaking path researches (e.g. Barro, 1991 and 1996 and La Porta et al., 1999) has shown that democracy does not guarantee economic success. At the same time, however, a flurry of studies established the importance of the quality of institutions for growth and development (Keefer, 1993 and Mauro, 1993). The relation is not simply a temporal or spatial correlation but reflects a causal linkage running from the quality of institutions to growth and development (Hall and Jones, 1999 and Acemoglu et al., 2001).

Read more of this post

Advertisements

Africa’s challenge: The ‘jobless growth’

Edited by Zeinab Sabet and Shahira Emara

For over 40 years, Africa has not witnessed such a rapid growth as recently. Out of the world’s 10 fastest growing economies, 6 are African! However, such growth is not always coupled with a decrease in inequality or a remarkable reduction in poverty. While some African countries have experienced growth with significant reduction in poverty, poverty rate remains high in most countries regardless of their economic performance. In the latter cases, growth has been even named by some studies ‘jobless growth’. This is where the African challenge remains.

Witness Simbanegavi, Director of Research at the African Economic Research Consortium, argues that growth is not being channelled in the right way to benefit the vulnerable people. On the other hand, and unlike the Latin American region, Africa lacks strong social protection policies. According to Simbanegavi, what Africa needs now is a pro-poor growth coupled with improved social protection policies; only this paradigm can lead to an enhancement of the welfare of the poorest.

Read more of this post

ABCDE 2011: Keynote address by Daniel Cohen

Daniel Cohen, Professor of Economics at the École Normale Supérieure and Paris I University, and Director of the Centre for Economic Research and Application (CEPREMAP) of the Paris School of Economics offered his views on factor accumulation, culture and institutions in his keynote speech at the ABCDE 2011 event.

Daniel Cohen, Paris School of Economics (PSE), speaking at the ABCDE 2011

Daniel Cohen, Paris School of Economics (PSE), speaking at the ABCDE 2011

Mr. Cohen stated that the world has been changing quite significantly over the past few decades and that we are witnessing the “rise of the rest” in terms of population and GDP.

What are the causes of these changes and what the consequences on global economy and culture? According to Cohen, scholars tend to explain these changes through different elements, such as factor accumulation, productivity, the role of institutions and cultural shifts. Mr. Cohen presented an overview of the different theories. In his own opinion, everything matters. In particular, according to Mr. Cohen today’s globalization is primarily driven by exogenous policy changes (rise of India and China, in a large part due to the collapse of the Soviet model) and endogenous cultural shifts (demography, television and social media such as Facebook). Yet, the idea that peace and democracy are endogenously determined by prosperity goes too far. Peace and democracy have a life of their own.