Jonathan Krieckhaus

Corruption, Democracy, and Economic Growth

Scholars have long suspected that political processes such as democracy and corruption are important factors in determining economic growth. Studies show, however, that democracy has only indirect effects on growth, while corruption is generally accepted by scholars as having a direct and negative impact on economic performance. We argue that one of democracys indirect benefits is its ability to mitigate the detrimental effect of corruption on economic growth. Although corruption certainly occurs in democracies, the electoral mechanism inhibits politicians from engaging in corrupt acts that damage overall economic performance and thereby jeopardize their political survival. Using time-series cross-section data for more than 100 countries from 1982–97, we show that corruption has no significant effect on economic growth in democracies, while non-democracies suffer significant economic harm from corruption.

Reconceptualizing the Developmental State: Public Savings and Economic Growth

Abstract Developmental state theory suggests that rapid economic growth can be achieved when states allocate financial resources to strategic industrial sectors. While not denying this mechanism, I argue that an equally important component of state-led growth is public sector efforts to mobilize financial resources for investment and growth. I support this argument with crossnational statistical evidence, and a Brazilian case study, both of which suggest that public savings substantially influence economic growth rates.

Democracy and Economic Growth: How Regional Context Influences Regime Effects

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 National Context Influence Democratic Satisfaction? A Multi-Level Analysis

Previous research, using standard regression analyses, suggests that national context affects citizens’ satisfaction with democracy. We note that these standard techniques are inappropriate for examining the interaction between national and individual-level data, and we show empirically that these techniques have in fact led to severely biased findings in past studies. We therefore utilize a multi-level model to reassess existing theoretical claims. We find support for the claim that a consensual political system reduces the difference in democratic satisfaction between winners and losers. We do not find support, however, for existing arguments that citizen satisfaction is influenced by economic growth, corruption, democratic longevity, or changes in political freedoms. More generally, we argue that the bias produced by traditional statistical techniques is so severe that scholars must discontinue their use in future research.

Globalization and human well-being

Over the past half-century we have witnessed a gradual trend towards increased globalization. This phenomenon includes such diverse processes as the greater mobility of capital, goods, and services, as well as increasing diffusion of ideas, technology, and norms. Given the ubiquitous and multi-faceted nature of globalization, we evaluate the effect of economic, social, and political global integration on a particularly important outcome – human well-being. Theoretically, we argue that globalization has a large number of different effects on human well-being, including multiple positive effects and multiple negative effects. Empirically, we analyze the impact of globalization on well-being using a pooled data set, including 132 countries over the time period 1970–2007. We find that, on balance, all three forms of globalization positively affect well-being.

Economic Inequality and Democratic Support

Does economic inequality influence citizens’ support for democracy? Political economy theory suggests that in a country with high inequality, the majority of the population will support democracy as a potential mechanism for redistribution. Much of the survey and area-studies literature, by contrast, suggests that inequality generates political disillusion and regime dissatisfaction. To clarify this disagreement, we distinguish between prospective versus retrospective evaluations as well as between egocentric versus sociotropic evaluations. We test the resulting hypotheses in a multilevel analysis conducted in 40 democracies. We find that citizens are retrospective and sociotropic, meaning that higher levels of economic inequality reduce support for democracy amongst all social classes. We also find a small prospective egocentric effect, in that the reduction in democratic support in highly unequal countries is slightly less severe amongst the poor, suggesting they believe that democracy might increase future redistribution.

Colonialism, Property Rights and the Modern World Income Distribution

Influential studies by Acemoglu, Johnson and Robinson claim that colonial legacies explain the origins of development-promoting property rights and thus account for the modern world income distribution. Specifically, they argue that European colonial powers engineered a global ‘reversal of fortune’, bringing property rights and prosperity to relatively uninhabited colonies while imposing inefficient institutions on locales with less potential for settlement. We re-evaluate their theoretical arguments and empirical findings and come to a different conclusion. We concur that British colonialism dramatically restructured four colonies, resulting in phenomenal economic success. For the majority of the world, however, colonialism had no discernible effect on property rights. We conclude that contemporary development studies must find another explanation for the modern world income distribution.