| dc.description.abstract | Theoretical work on the institutional sources of economic growth regards decentralization and democracy in a positive light. Despite this, empirical work shows that neither fiscal decentralization nor national democracy is a robust predictor of per capita GDP growth. We argue that these theories have failed to bear fruit because they ignore the linchpin of decentralization and democracy, namely local democracy. Democracy at a local level enhances economic growth by enabling decentralized policy selection and incentivizing local politicians to select policies that benefit economic development, including the provision of local public goods. We test for the relationship using a novel measure of local democracy with global coverage and time series extending from 1900 to the present. We find robust evidence that local democracy nurtures growth. This relationship holds up when accounting for country- and year-fixed effects, when controlling for democracy at the national level, and when we treat our measure of local democracy as an endogenous regressor. Additional tests reveal that the relationship is clearer in contexts where our argument suggests that it should operate more strongly, namely (national- level) democracies and in periods and regions where local-level institutions have a more pronounced role in policy-making. | sv |
| dc.description.sponsorship | ThisresearchprojectwassupportedbyRiksbankensJubileumsfond,GrantM13-0559:1,PI:StaffanI.Lindberg,V- Dem Institute, University of Gothenburg, Sweden; by Knut and Alice Wallenberg Foundation to Wallenberg Academy Fellow Staffan I. Lindberg, Grant 2013.0166, V-Dem Institute, University of Gothenburg, Sweden; as well as by internal grants from the Vice-Chancellor’s office, the Dean of the College of Social Sciences, the Department of Political Science at University of Gothenburg; and the University of Florida Foundation in support of the Miriam and Raymond Ehrlich Eminent Scholar Chair in Political Science. We performed simulations and other computational tasks using resources provided by the Notre Dame Center for Research Computing (CRC) through the High Performance Computing section and the Swedish National Infrastructure for Computing (SNIC) at the National Supercomputer Centre in Sweden. We specifically acknowledge the assistance of In-Saeng Suh at CRC and Johan Raber at SNIC in facilitating our use of their respective systems. We thank Aníbal Pérez-Liñán, Michael Miller, Zdravko Petak, Michael Ting, Jan Teorell, participants at the 2016 APSA Annual Meeting in Philadelphia, 2016 IPSA Conference in Poznan, 2016 EPSA Annual Conference in Brussels, 2016 Danish Annual Political Science Conference in Velje, and the 2016 V-Dem Conference in Gothenburg for valuable comments and suggestions. We want to especially thank Tore Wig for comments and others throughout the process. Knutsen’s work on this project was funded by Research Council Norway Grant pnr 240505. | sv |
