The Effect of Democracy on GDP in OECD Countries

Abstract

Although many countries have implemented democracy in their government systems, with a variety of democratic index values, the performance of GDP in each country varies. For this purpose this study was conducted. This study is conducted in OECD coutries from 2015-2017 because OECD countries implements democracy fully  Using panel data method, the result of study say that,  democracy,  government effectiveness and FDI has a significant and positive  effect on increasing the value of GDP in countries that are members of the OECD. Government effectiveness is the most dominant variable affecting economic growth in OECD countries compared to democracy and FDI. Seeing this condition, the government must be able to improve the quality of its performance in order to improve good governance so that the development process can run smoothly and the community can feel the results that lead to increased welfare.