Institutions and economic volatilityDemocracy versus risk of expropriation

Resumo

Purpose: The purpose of this paper is to decompose the effects of democracy and risk of expropriation on economic volatility. Design/methodology/approach: The authors follow Acemouglu et al. and use settler mortality in former colonies in the seventeenth, eighteenth and nineteenth centuries as an instrument of 'risk of expropriation,' in addition to a democracy index to capture institutional effects on economic stability. Findings: The authors present empirical evidence that the economic performance of more centralized former European colonies is not more volatile than that of democratic ones, once the exogenous variation of expropriation risk across countries is included in the model Originality/value: The paper investigates the role of a spectrum of different institutions on economic stability. In this sense, the paper contributes to the literature analyzing the effect of property-rights protection, as measured by a risk-of-expropriation index, on the relation between democracy and economic stability. © Emerald Group Publishing Limited.

Ficha do documento

Tipo

Artigo científico

Ano

2009

Instituição

Fundação Getulio Vargas

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso restrito

DOI

10.1108/01443580910955060

Identificador

oai:repositorio.fgv.br:10438/25351

Palavras-chave

DemocracyEconomic changeOrganizationsVolatilidade (Finanças)