Political Systems and Economic Development By: Hassan Memari

Political Systems and Economic
By: Hassan Memari
Research Question and Variables
• “What is the effect of a country’s political
system on its economic development?”
• The dependent variable is the economic
development of a country.
• The independent variable is the political
system of a country.
Selection Case Studies
• The political systems that I will compare are:
democracy, communism, and (absolute) monarchy.
• It would be incorrect/biased to include just the most
economically stable or well-off nations in each political
system. We must address each political system by
including a nation from each part of the “spectrum of
economic development”.
• Therefore, for each political system, I will include:
– one “poorly economically developed” nation
– one “moderately economically developed” nation
– one “highly economically developed” country.
First Question/Potential Problem
• How can we determine a nation’s level of economic
• “Economic development” refers to increases in the
standard of living of a nation's population associated with
sustained growth from a simple, low-income economy to a
modern, high-income economy
• Therefore since standard of living is one of the things that
factors into a country’s level of human development , I will
use the HDI (Human Development Index) to compare the
economic development of countries.
• Some may argue that one should use a nation’s GDP PPP
per capita to measure this. Well, I do not think this will be
a problem since the standard of living used in the HDI is
measured by the natural logarithm of a nation’s GDP PPP
per capita. Therefore the GDP is already accounted for in
some way.
Selection Case Studies
• Based on the most recent data for countries in the HDI,
the countries I will use (which are listed from most
economically developed to least) are:
• Democracy:
– United States (.956)
– Costa Rica (.854)
– India (.612)
• Communism:
– Cuba (.863)
– China (.772)
– Laos (.619)
• Monarchy:
– Qatar (.91)
– Saudi Arabia (.843)
– Swaziland(.572)
• The HDI combines three dimensions:
– Life expectancy at birth, as an index of population
health and longevity
– Knowledge and education, as measured by the
adult literacy rate (with two-thirds weighting) and
the combined primary, secondary, and tertiary
gross enrollment ratio (with one-third weighting).
– Standard of living, as measured by the natural
logarithm of gross domestic product per capita at
purchasing power parity.
• To see whether the political system of a nation affects its
economic development, I will examine the affects (positive
or negative) of the actions that a country took regarding
the three HDI criteria that were “in line” or adhered to their
proclaimed political systems
• If I observe that they had a positive affect and therefore
caused a nation’s government to continue with those
policies, then I think I will safely be able to say that the
political system of a nation affects its economic
• However, if I observe that these actions had a negative
effect and then caused the government of a nation to enact
policies that don’t adhere with its political system, then,
not only will I not be able to make this statement, but I will
also be compelled to answer my second
Second Question/ Potential Problem
• “How does one determine whether the political system of a
country affects that country’s economic development or if
the economic development affects the political system of a
• This is exactly why I included countries from different areas
of the “economic development spectrum”.
• In the end, I will not only compare if and how each political
system ( and its policies) affects economic development,
but I will also compare how each type of economically
developed country within a certain political system acted in
regards to the three HDI criteria.
• I will examine whether the less economically developed a
nation is, the more or less its policies toward the three
criteria adhere to its political system
• In other words, I will be examining whether its level of
economic development affects its political system/policies.
My thoughts
• In their piece “Political Regimes and Economic
Growth”, Mr. Adam Przeworski and Mr. Fernando
Limongi argue that each political system has its own
unique take on economic developments, both
positive and negative.
• I believe that in the end I will find that the effect of a
political system on economic development and vice
versa has a circular flow effect, in which the political
system and economic development both effect one
another, but that the way they are affected differ
according to each political system.
Thank you!