ABSTRACT
The literature on how democracy and democratization should affect economic growth is immense and contains numerous contradictory arguments and results. The non-democratic regimes may be concerned about growth due to backward links to political regimes, which are discussed in the political science modernization literature. This chapter contributes to these debates through studying the interconnection between different levels of democracy and economic consequences investigating non-linear effects of democracy on growth. The economic growth effects of sub-national political regimes in Russia should be associated with selective application of the federal law, and informal coalitions between governors and business, which should be particularly likely for certain political regimes. The regions with intermediate political regimes perform worse than outright autocracies and democracies. The theoretical conclusions implied by the empirical results is that in Russia political stability was more important for growth than reforms and liberalization.
