Curse of Democracy: Evidence from 2020

Countries with more democratic political regimes experienced greater GDP loss and more deaths from Covid-19 in 2020. Using five different instrumental variable strategies, we find that democracy is a major cause of the wealth and health losses. This impact is global and is not driven by China and th...

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Bibliographic Details
Published in:IDEAS Working Paper Series from RePEc 2021-01
Main Authors: Narita, Yusuke, Sudo, Ayumi
Format: Article
Language:English
Online Access:Request full text
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Summary:Countries with more democratic political regimes experienced greater GDP loss and more deaths from Covid-19 in 2020. Using five different instrumental variable strategies, we find that democracy is a major cause of the wealth and health losses. This impact is global and is not driven by China and the US alone. A key channel for democracy’s negative impact is weaker and narrower containment policies at the beginning of the outbreak, not the speed of introducing policies.