Democracy, Quality of Government, and Human Development: Complementary or Substitutable Effects?

‘Good institutions’ have been emphasized again and again as important for progress in human development. However, there is widespread skepticism regarding a positive impact of democracy and due to lack of appropriate data only few studies have focused on the quality of government as a potential determinant. Based on novel datasets on democracy and quality of government (provided by the Varieties of Democracy project) and human development (provided by the CLIO-infra project), covering most country-years from 1900 to 2014, we attempt to investigate the relationship between democracy, quality of government, and human development. More particularly, we use a range of statistical methods (mainly fixed effects models) to assess if the impact of electoral democracy on human development is conditioned by the level of quality of government (and vice versa). This expectation is, for example, based on the argument that incentives for democratic politicians to improve human development are of little help if the ability to successfully implement such policies is missing. Then again, we also assess an alternative line of argumentation. It proposes that the effects of democracy and quality of government, respectively, are substitutable, meaning that the combination of autocracy and low quality of government induces poor performance regarding human development, while having either high levels democracy (or democratic stock) or high levels of quality of government should promote human development (operationalized by the informant mortality rate).