Institutional Quality and Democracy: The Case of Bangladesh

Chowdhury Nawsheen Farooqui and A. F. M. Ataur Rahman

Bangladesh has passed quite some time as a democratic country. During this time it has also tried to develop its economic institutional quality. However, a direct relationship between these two parameters is yet to be established at either theoretical or empirical level. This current study investigates the influences of economic institutions on democracy. Using data of 2002- 2014 and econometric methods of cointegration (based on Engle & Granger, 1987) we found that governance indicators such as voice accountability, political stability, corruption, and government effectiveness have significant impact on democracy. However corruption has in general a negative effect on democracy.