Civil Liberties, Democracy, and the Performance of Government Projects |
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| Authors: | Isham Jonathan; Kaufmann Daniel; Pritchett Lant H |
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| Institution: | Jonathan Isham is with the Institutional Reform and the Informal Sector (IRIS) Center at the University of Maryland, Daniel Kaufmann is with the Harvard Institute for International Development (on leave from the World Bank), and Lant H. Pritchett is with the Policy Research Department at the World Bank. The authors thank Deon Filmer and Phil Keefer for helpful comments, as well as seminar participants at Columbia University, the University of Maryland, the Northeast Universities Development Conference, and the World Bank. This article is a reworking of "Governance and the Returns on Investment: An Empirical Investigation" (World Bank Policy Research Department Working Paper 1550). |
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| Abstract: | This article uses a cross-national data set on the performanceof government investment projects financed by the World Bankto examine the link between government efficacy and governance.It demonstrates a strong empirical link between civil libertiesand the performance of government of projects. Even after controllingfor other determinants of performance, countries with the strongestcivil liberties have projects with an economic rate of return8–22 percentage points higher than countries with theweakest civil liberties. The strong effect of civil libertiesholds true even when controlling for the level of democracy. The interrelationship among civil liberties, civil strife, andproject performance suggests that the possible mechanism ofcausation is from more civil liberties to increased citizenvoice to better projects. This result adds to the evidence forthe view that increasing citizen voice and public accountability—throughboth participation and better governance—can lead to greaterefficacy in government action. |
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