The European Journal of Comparative Economics

ISSN: 1824-2979

EJCE Year: 2014, December. Volume: 11 - Issue: 2

The Democracy and Economic Growth Nexus: Empirical Evidence from Cote d'Ivoire

by Wadjamsse B. Djezou

Start page: 251 - End page: 266

Keywords: Democracy, Income, Cointegration, Causality

Jel code: O10; D72; C32; P16

Abstract:

This paper investigates the relation between economic growth and democracy for Cote d'Ivoire for the period 1960 to 2012. It analyzes both the long-run relation and the direction of causality. To this end, an autoregressive distributed lag (ARDL) model of cointegration and a Granger causality test have been implemented within a vector error correction model (VECM) framework. The results show cointegration in the long run when regime durability is taken into account. Indeed, for economic growth and democracy to move together in the long run, they need to be associated with regime durability. The tests for causality show long run causality running from GDP per capita and regime durability to democracy. In the short run, only the regime durability granger causes democracy. These results suggest that economic growth through strong institutions is a precondition for democratization.

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