Party Strength and Economic Growth

• While a large literature suggests an important role for political parties in economic development, this is the first attempt to lay out a comprehensive theory and a reasonably comprehensive empirical test of the proposition. We argue that strong parties broaden the constituencies to which policy makers respond and help politicians solve coordination problems. These features help ensure better economic management, public services, and political stability. And this, in turn, enhances economic growth. Drawing on a novel measure of party strength from the Varieties of Democracy dataset, we test this theory on data drawn from more than 150 countries, observed annually from 1900–2012. We identify a sizeable effect which is robust to various specifications, estimators, and samples. The effect operates in both democracies and autocracies and is fairly stable across regions and time periods. We also find provisional evidence in favor of causal mechanisms pertaining to public services and political stability.

Subject headings

SAMHÄLLSVETENSKAP  -- Statsvetenskap (hsv//swe)

SOCIAL SCIENCES  -- Political Science (hsv//eng)

Publication and Content Type

vet (subject category)

ovr (subject category)