Working Papers
Executive Constraints and Economic Growth. Working paper, 2024.
[ Abstract | Draft ]
Despite extensive research on the relationship between democracy and development, the specific democratic features driving economic growth remain unclear. This paper examines the impact of two forms of executive constraints: horizontal constraints, parliamentary oversight over the executive, and vertical constraints, citizen accountability through competitive elections. While previous work emphasizes horizontal constraints for property rights protection, I argue that vertical constraints drive the democracy effect on growth by fostering human development. Using dynamic panel analysis, I find that vertical constraints consistently increase real GDP per capita in the short and long run, whereas horizontal constraints have a negligible effect. I further explore causal mechanisms, showing that horizontal constraints promote capital investment while vertical constraints enhance living conditions, leading to higher education, increased public spending, and lower infant mortality rates. These findings suggest that democracy’s growth-enhancing effects stem more from citizen accountability rather than institutional checks on executive power.