Degree Name

Doctor of Philosophy


School of Accounting, Economics and Finance


Economic growth as a necessary condition for economic development is concerned with an increase in the economy’s output. For many years, attempts have been made to identify the factors that most influence economic growth. Apart from the key role of economic factors in influencing growth, political variables are also pivotal. The main aim of this study is to investigate the conceptual and empirical issues of political variables, particularly democracy and political instability, in the context of cross-country economic growth analysis.

When it comes to conceptual issues, democracy has generally been considered from a political point of view only, despite the fact that it is a multifaceted concept that is not limited to its political aspects. This study therefore contributes to the existing literature on democracy and economic growth by providing a multi-dimensional index called “Comprehensive Democracy Index” (CDI), which includes the political, economic and social aspects of democracy. Since the main message of democracy is freedom, the new indicator – CDI – is built on three components: political freedom, economic freedom and social freedom. This indicator has been computed for 153 countries based on data from 2002 to 2012. The calculations show that out of 1661 observations, the lowest democracy level was 13.12 for Iraq in 2002 and the highest was 93.27 for New Zealand in 2005.

The main contribution of this study to the discipline of cross-country economic growth analysis is to urge researchers to consider conceptual and empirical issues concurrently in order to broaden their views and avoid potentially misleading results and conclusions.



Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily represent the views of the University of Wollongong.