New Paper Examines How Government Regimes Impact Economic Growth

September 23, 2011
by Doug Gavel

Which models of governance most stimulate economic growth? That is the question explored in a new Harvard Kennedy School Faculty Working Paper co-authored by Pippa Norris, Paul F. McGuire lecturer in comparative politics.

“Making Democratic-Governance Work: The Consequences for Prosperity” examines the ways in which different government regimes – through their political, fiscal and regulatory policies – affect domestic economic development. Norris examines economic data from years 1984-to-2007 in order to test the so-called “equilibrium thesis.”

“The equilibrium argument suggests that previous claims need to be synthesized into a unified theory where the combination of both liberal democracy and governance capacity is understood as contributing towards economic growth,” she writes. “In particular, electoral accountability increases the pressures on governments to deliver an effective performance, but public officials can only do so if the state has the technical capacity and skills to manage macroeconomic policies.”

Norris concludes that the data support the thesis, providing clear evidence that a democratic system of government, in which officials are elected by their constituents, combined with a robust and capable management capacity, results in highest economic growth rates.

“This model shows that both these factors have effects which are similar in strength; an improvement of 10% in the 100-point scales of liberal democracy and bureaucratic governance increases annual per capita growth in GDP by roughly 0.2 or 0.3% higher respectively,” she writes. “This may appear to be a relatively modest impact in itself, but since average growth rates for all countries throughout these years is 1.9%, the rise is not inconsiderable.”

Pippa Norris, the Paul F. McGuire Lecturer in Comparative Politics, is a political scientist focusing on democracy and development, public opinion and elections, political communications, and gender politics. She joined the Harvard faculty in 1992. Her contributions toward the humanities and social sciences have been recognized in the 2011 Johan Skytte prize (with Ronald Inglehart), known informally as the 'Nobel' prize in political science, and also the award of an Australian Laureate, in 2011.

The Working Paper is part of a book project, “Democratic Governance and Human Security: The impact of Regimes on Prosperity, Welfare and Peace,” forthcoming next year with Cambridge University Press.

Photograph of Pippa Norris

Pippa Norris, Paul F. McGuire lecturer in comparative politics

“The equilibrium argument suggests that previous claims need to be synthesized into a unified theory where the combination of both liberal democracy and governance capacity is understood as contributing towards economic growth,” Norris writes.

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