Democracy and the Quality of Economic Institutions: Theory and Evidence

Krieger, Tommy

doi:10.2139/ssrn.4217983

Cited by 1 publication

(2 citation statements)

References 49 publications

(56 reference statements)

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“…This study re-emphasises the theoretical debate and confirms that a truly democratic institution could help to grow both latent and established entrepreneurship in developing regions. A democratic regime improves the quality of institutions and guarantees the freedom of enterprises (Krieger, 2019). This study provides holistic knowledge of the moderating effect of political regimes in the entrepreneurship-institution nexus in the case of least-developed nations.…”

Section: Discussionmentioning

confidence: 99%

“…A democratic leader would be interested in strengthening institutional quality for effective governance. Krieger (2019) discussed this issue by presenting a theoretical model to justify that an improvement in the extent of democrati-sation may lead to an increase in the quality of institutions. Democracy improves institutional quality and further strengthens the relationship between entrepreneurship and institutions in a society because people’s preference is the priority compared to autocracy.…”

Section: Theories Relevant Studies and Hypothesesmentioning

confidence: 99%

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Institutions and Entrepreneurship in Africa: Does Democracy Matter?

Ajide

2023

The Journal of Entrepreneurship

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Previous studies on the relationship between institutions and entrepreneurship do not cover the relevance of democracy in strengthening the two variables. It is not clear whether democratic regimes promote entrepreneurship in Africa. This study contributes to the debate by examining the impact of democracy on entrepreneurship in Africa. It also provides fresh insights by analysing how democracy can strengthen the relationship between institutional quality and entrepreneurship. Panel data from 23 African nations over the period 2006–2018 is used for the study. The results based on the panel-spatial correlation consistent technique augmented with least square dummy variables (PSCC-LSDV) show that a democratic regime is more favourable for promoting entrepreneurship. Findings reveal that good institutions promote entrepreneurship, and democratic regimes strengthen the relationship. It is also found that democracy and institutional quality perform complementary roles in promoting entrepreneurship in Africa. The findings suggest that an African nation with a truly democratic system of government can encourage entrepreneurial activities within its economy by using the opportunity presented by democracy to strengthen its institutional quality.

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Section: Discussionmentioning

confidence: 99%

Section: Theories Relevant Studies and Hypothesesmentioning

confidence: 99%