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- Title
Is there an optimal level of political competition in terms of economic growth? Evidence from Italy.
- Authors
Alfano, M.; Baraldi, A.
- Abstract
As competition in the economic market yields consumer benefits, political competition is supposed to be welfare-enhancing for citizens in terms promoting competence and good behaviour. Recent literature also underlines its costs, opening the possibility of a non-biunivocal way in which the degree of political competition affects economic growth. The parallel between economic and political competition allows the use of the normalized Herfindahl index as a measure of competition among political parties. Within the Italian regional elections scenario from 1980 to 2008, our findings confirm an inverted-U relationship between the degree of political competition and the regional growth rate. An 'optimal' level of political competition allows for a reduction in the trade-off between political accountability and government instability. Moreover, political competition can be used as a 'tool' for the growth enhancement of political corruption. However, the question posed by the findings is how to drive political competition to its optimal value.
- Subjects
ITALY; POLITICAL competition; ECONOMIC development; HERFINDAHL-Hirschman index; ELECTIONS; POLITICAL accountability
- Publication
European Journal of Law & Economics, 2015, Vol 39, Issue 2, p263
- ISSN
0929-1261
- Publication type
Article
- DOI
10.1007/s10657-012-9340-5