One of the most fundamental themes that combine the disciplines of political science and economics is the role played by democracy in the economic growth of a country. Does democracy accelerate or hinder growth? The literature is divided on this topic with both sides presenting strong empirical and theoretical views. This paper studies this issue in the context of South Asia. Our theoretical framework brings out the key characteristics that are often highlighted in both sides of the intellectual debate. Using econometric methods and tools such as Pooled, Fixed and Random Effects estimates, we aim to study the relationship between democracy and economic growth in South Asia over the period 1990-2018. After dealing with the often-ignored issue of endogeneity using Instrumental Variables, our results show that democracy has a positive and statistically significant effect on economic growth in the region.

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