Asmaa M. Ezzat, Marwa M. Gomaa, Rana Hosni

(Faculty of Economics and Political Sciences, Cairo university , Giza 12613, Egypt)

 

 

Abstract: The underlying study analyzes the impact of “Democracy” on “Quality of Government”; namely the ability of the government to perform its activities in an efficient way and without corruption. Previous empirical studies concerned with this issue point to a nonlinear relationship between the two concepts, claiming that there are certain characteristics of a society that are key in determining the impact of democracy on the government quality. In this regard, the current study tests whether democracy tends to affect the quality of government differently based on the level of economic development. Using panel data estimations, for a sample of 125 countries over the period (2000-2011), the results suggest that mere transition to democracy is not sufficient to enhance government quality. An advanced fully-formed mature democracy, together with a high level of economic development, is crucial to realize the benefits of democracy in terms of an improved quality ofgovernment. These results remain robust under alternative cross-sectional estimations and with alternative

measures of government quality.

 

 

Key words: democracy; quality of government; corruption; rule of law; government effectiveness; economic development; panel data

 

JEL codes: D72, D73, H11, K42, O50, P16