There is no consensus on exactly which factors should decide whether a country is democratic or not, or how the degree of democracy should be measured. This project has attacked the problem by collecting data on very disaggregated institutional and non-institutional factors, such as changes to constitutional texts, the extent to which the executive branch may propose legislation, or how corrupt or effective public administration is. The research within the project has clarified the relative importance of a series of factors and how they interact, with respect the impact of democratic institutions on economic growth, the probability of conflict, and political stability. Among a large number of findings from the project, the following may mentioned: Large-scale political corruption often undermines the stability of formal democratic institutions, but democratic institutions, in turn, reduce corruption. Corruption may, however, stabilize semi-democracies and low-income democracies, since they allow powerful elites to circumvent weak formal institutions rather than overturning them. Another study confirms an earlier finding by project members; that semi-democracies are less stable than autocracies or democracies. The new study shows that this result holds also when confronted with a series of plausible alternative explanations, and conclude that this is among a very small number of 'stylized facts' in social science. The project has shown, moreover, that democratic institutions are better for economic growth than previous research indicates. One study finds that frequently used measures of democracy - that require that researchers must observe alternations between governments in order to define countries as democratic - underestimate the positive effect of democracy on growth. The reason is that governments that succeed in creating high economic growth do not lose elections. Consequently, measures that ignore this will classify economically successful democracies - such as Botswana - as non-democratic. Another study from the the project shows that democracy has a particularly beneficial effect on growth in countries with weak state capacity - democracy is more useful for growth in Benin than it would have been in China, for instance. Another finding from the project is a similar "substitution effect": Non-democratic countries with "good governance" - well-functioning public-sector institutions that are able to implement good policies - have a lower risk of conflict recurrence. In countries with weak state capacity, democracy is also good for peacekeeping.
This project focuses on conceptualization and measurement of democracy, and uses insights from this research to reanalyze how democratic institutions and sub-components of democracy affect economic growth, inequality, conflict and political stability. Nei ther theoretical nor empirical studies have taken into account democracy's multi-dimensionality to a sufficient degree, and previous studies on democracy's effects have mostly relied on problematic aggregate measures. We will address both these points by specifying in detail the salient sub-components/indicators of various conceptualizations of democracy, identify aggregation procedures, and explore the validity of new proposed aggregate measures. The set of indicators will be broad in order to allow for the construction of aggregates based on a range of conceptualizations. The project includes a considerable data collection effort, both to expand data coverage on existing indicators and to collect data on new indicators. The project will use both disaggr egated indicators and new aggregate measures to reanalyze questions on how democracy affects economic growth, inequality, conflict and stability. More precise specifications of which institutional components of democracy are salient for an outcome will he lp developing and applying more precise theoretical arguments and allow for better empirical tests. Finally, the study reviews existing aggregate democracy measures, develops new and more valid measures based on the conceptual work and proper aggregation methods, and uses these in empirical studies on democracy's effect. The project thus aims at contributing to our understanding of the democracy concept's structure, and to improve measurement of democracy and its sub-components. Furthermore, the project w ill contribute to the literatures on how democracy, and various constitutional- and other institutional structures, affect economic growth, inequality, conflict and stability of political institutions and regimes.