Social and Behavioral Sciences Commons^™

Curse Of Democracy: Evidence From 2020, Yusuke Narita, Ayumi Sudo

Cowles Foundation Discussion Papers

Countries with more democratic political regimes experienced greater GDP loss and more deaths from Covid-19 in 2020. Using five different instrumental variable strategies, we find that democracy is a major cause of the wealth and health losses. This impact is global and is not driven by China and the US alone. A key channel for democracy’s negative impact is weaker and narrower containment policies at the beginning of the outbreak, not the speed of introducing policies.