The economic costs of transition to democracy in the Maghrib

This article shows that abandoning the current political system in Algeria and Tunisia is likely to be economically costly. These costs are estimated in terms of output per worker – a customary measure of labour productivity. The results – using an endogenous growth model – indicate that Algeria would have lost more than 20 per cent of its labour productivity during the Boumediènne–Benjedid period had it had the same level of democracy as the United States. Tunisia would have lost more than 15 per cent during the Ben Ali period. One possible explanation for this is that, as the two countries move from highly repressive regimes into more tolerant political systems, they begin to lose their political strength for adopting developmental strategies that would otherwise face little, if any, resistance under authoritarianism. The main policy implication is that for democratisation to be successful its disruptive effects must be part of all political liberalisation equations

Authoritarianism · Democracy · Democratization · Development economics · Economic system · Economics · Liberalization · Macroeconomics · Market economy · Political economy · Political science · Political system · Politics · Productivity · Economic Growth and Development · Economic Theory and Policy · Fiscal Policy and Economic Growth · Law