Chapter 9: Democracy or Dictatorship: Does It Make A Difference?

Question 1

The effect of regime type on economic growth

Answer 1

Not a strong consensus on whether democratic governments promote higher levels of economic growth than dictatorships

Question 2

The three factors mainly focused on when attempting to link regime type to economic growth

Answer 2

1) The protection of property rights

2) Citizens’ incentives to consume rather than invest

3) Dictatorial autonomy

Question 3

The Meltzer-Richard model

Answer 3

Below-average income = net beneficiary of the tax system

Above-average income = net contributor to the tax system

Question 4

How can democracy hurt property rights?

Answer 4

If the rich think the tax rate is too high, they will prefer to consume rather than invest, which stops economic growth

Question 5

Some criticism of the Meltzer-Richard model

Answer 5

May overstate the extent to which democratic politics will lead to large-scale redistribution

Question 6

Technological possibility frontier

Answer 6

Represents all the different divisions of what it is possible for the society to technologically produce

Question 7

A capitalist possibility frontier

Answer 7

When society’s resources are underutilized and there is a decline in societal output from what is technologically possible

Question 8

Przeworski’s model

Answer 8

There is a potential trade-off between equality and growth