Summary:
Joint project of School of Economics, University of Zurich and CLDS
The goal of the project is to better understand the role of the level of development (measured by the distance from the frontier of cutting edge technology) in the causality relationship between democracy and economic growth and to answer the questions whether mechanism by which democracy influences economic growth changes with level of development. The objectives of the research are: (1) to provide a consistent theoretical explanation; (2) to establish comprehensive country level (for countries of the World) database with all available variables for empirical research of the role of the level of development, measured by income per capita that will follow; (3) to empirically, by econometric testing, verify the hypotheses formulated according to the theoretical explanation. These objectives will be accomplished in the five lines of research:: (a) changing mechanism of influence of democracy to economic growth depending on the level of development, i.e. distance from the technology frontier; (b) relations between political institutions and middle income non-convergence trap, i.e. whether and in which way political institutions have impact to the economic growth of the countries that are not poor any more but are not rich yet; (c) relations between different level/quality of democracy to the economic growth at the various levels of development; (d) case study of Serbia on relation between democracy, economic reform and economic growth; and (e) relations between political institutions, financial intermediation and economic growth, both in general and in the cases of middle income countries like China and India.
