Democracy and Economic Development: A Comparative Analysis

Abstract

Modern-day economics is greatly influenced by the political landscapes, and the modern politics are largely reliant on the economic situation of countries. Both the terms are interlinked and each variable has complemented the other at every historical instance since the industrial revolution. The paper sketches multi-variate analysis on the different aspects of democracy and economy with regards to institutional development and the new political economy. The paper further tries to find the positive and negative implications of democracy on economic development and vice versa. The study will also provide arguments on the successes and failures of economic institutions on the democracy. The antithesis from the realist sociologists and political scientists is provided in each section in the literature review. The paper further analyzes how geography, demography, and history shape democratic and economic institutions, and why democracies never drive economic development in some countries and bear fruitful results in the other countries. The study will then conclude with the analysis on what kind of democratic institutions are favorable for economic development and what kind of political institutions impede economic development