The Impact of the Relationship between Government and Parliament on Gconomic Growth

Abstract

During last two decades, studies in the area of political economy focused more on how the political structure of a country can influence economic outcomes. It is reasoned that the higher the degree of political competition, the more the likelihood of implementing mature policies and parliament can do better its role to control and monitor the government and this has a positive impact on economic growth. On the other hand, when the degree of political competition decreases, the parliament either aligns with the government or confronts it, which in both cases the probability of implementing efficient and pro-growth policies will decrease. In this study, we examine the effect of political competition on economic growth. Accordingly, the alignment between the parliamentary and presidential political party was considered as a measure of the presence of the political parties and political competition and it is entered in an economic growth model alongside other variables. Estimation of the model during years 1988-2014 showed that alignment of legislative and executive branches has a negative relationship with economic growth or more clearly, the decline in political competition has had a negative effect on economic growth.

Keywords

• political economy
• economic growth
• political competition
• constitution