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Investigating the Lee thesis: how bad is democracy for Asian economies?

  • Carl Henrik Knutsen (a1) (a2)


This paper discusses the hypothesis that democracy hurts economic growth and development, also known as the Lee thesis, and discusses why one could expect dictatorship to be particularly beneficial for growth in the Asian context. Three general theoretical arguments in support of the Lee thesis are then presented. However, the empirical results, based on panel data analysis on more than 20 Asian countries, do not support the hypothesis that dictatorship increases economic growth in Asia. There is no significant, average effect of democracy on growth. Asian dictatorships do invest a larger fraction of their GDP than democracies, but they are worse at generating high enrollment ratios in education after primary school.


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