Authoritarian Regimes and Economic Development: An EmpiricalReflection

Since the recent emphasis on institutions for overall economicdevelopment of the countries, the research in this strand has expandedenormously. In this study, we want to see the impact of politicalinstitutions on economic development in pure cross-country setting. Wetake the Human Development Index (HDI) as a measure of economicdevelopment and use two alternative measures of dictatorship. We findthat dictatorship is adversely affecting economic development in oursample of 92 countries. For instance, transition from extremedictatorship to ideal democracy would increase HDI by 17 percent.Moreover, our results are robust to alternative specifications and theproblems of endogeneity and reverse causation as is shown by the resultsof 2 Stages Least Squares (2SLS). JEL Classification: P16, H11, H41, H42Keywords: Economic Development, Human Development Index,Dictatorship