The democracy and economic growth nexus: do FDI and government spending matter? Evidence from the Arab world

The purpose of the paper is to examine the direct and indirect links between democracy and economic growth. To do so, the authors estimate a dynamic panel simultaneous equations model on a sample of 16 Arab countries during the period 2002–2013. This study focuses on two particular channels through which democracy affects growth, namely FDI inflows and public consumption expenditure. The results show that there is no clear relationship between democracy and economic growth in the Arab countries, which confirms the skeptical approach. The ambiguity of this relationship can be explained by the fact that democracy promotes growth indirectly by stimulating FDI inflows and hinders growth by generating higher public consumption expenditure.该论文旨在考察民主与经济增长之间的直接与间接关联。为此，作者以2002-2013年间16个阿拉伯国家为样本，估计了动态面板联立方程模型。本研究聚焦于民主影响经济增长的两条特定路径，即外国直接投资（FDI）流入与公共消费支出。研究结果表明，阿拉伯国家的民主与经济增长之间并无明确关联，这一发现印证了怀疑论观点。二者关系的模糊性可由以下事实解释：民主一方面通过刺激外国直接投资流入间接促进增长，另一方面则因推高公共消费支出而抑制增长。