Hazar Vural Jane

Istanbul Aydın University,

İstanbul, Türkiye

E-mail: hazarjane@aydin.edu.tr 

ORCID 0000-0001-9584-3999 

Empirical linkages between democracy and economic growth: The case of Türkiye

Mortaza Ojaghlou

Istanbul Aydın University,

İstanbul, Türkiye

E-mail: mortazaojaghlou@aydin.edu.tr 

ORCID 0000-0003-4580-6182

Abstract. According to the Lipset modernization theory, as a nation’s wealth increases, so does its probability of maintaining a democratic system of government. However, some researchers believe that the correlation between democracy and economic growth is inverse, especially in developing countries. This is due to the fact democracy can be a costly endeavour, and it may not be possible to achieve economic growth and further democratic processes simultaneously. Finally, others argue that the more developed democracy is, the greater positive impact it has on economic growth.  Thus, the aim of this study was to investigate the possible relationships between democracy and economic growth in Türkiye, using annual data from 1996-2021. The results indicate that democracy has a positive influence on economic growth in the long term in Türkiye. Contrary to Lipset's hypothesis, economic growth does not appear to have a significant impact on improving democratic systems. The results show that not only this year's democracy has a positive effect on this year's economic growth, but also improving of this year's democracy also has a positive effect on next year's economic growth. Therefore, it may be concluded that the enhancement of democratic institutions in Türkiye would to be beneficial for the economy and would not impose a significant financial burden on the nation. However, no causal relationship has been found in the short term between the democracy index and economic growth in Türkiye. 

Received: May, 2024

1st Revision: April, 2025

Accepted: June, 2025

DOI: 10.14254/2071-789X.2025/18-2/4

JEL Classification: O43, P16, O11, F43, C22

Keywords: democracy, economic growth, Türkiye, Lipset modernization theory, long-term growth, democratic institutions