Democracy, Dictatorship and Technological Change [pdf], por Carl Knutsen (Universidade de Oslo):
This paper investigates how regime type afects technological change, arguably the most important determinant of long term economic growth. The paper's main hy- pothesis is that democracies have higher technology-induced economic growth than dictatorships. This hypothesis is deduced from a formal model where dictators are assumed to value both personal consumption and staying in office. In the model, dictators can restrict civil liberties and diffusion of information, which reduces economic growth, but increases dictators' probability of surviving in office. The model also implies that dictators enforce harsher restrictions on civil liberties if the global rate of technological change is low, if the capital shares of their economies are high, if their ability to discern politically dangerous from economically relevant information is poor, and if their positions in office are insecure. The hypothesis that democracies have higher technology-induced growth is tested on an extensive dataset, including data from more than 100 countries with some time series going back to the 19th century.
The hypothesis finds robust empirical support: Democracies produce higher Total Factor Productivity growth than dictatorships. The paper also discusses the hypothesis that dictatorships with high bureaucratic quality can mitigate democracies' advantage in generating technological change. This hypothesis finds only partial support.