MSMEs (Microsoft, Small and Medium Enterprises) and Democracy, a Panel Data Model
This paper focuses on different national economic development structures, such as microsmall-medium-enterprises (MSMEs) vs. big or state-owned enterprises and their relations with political development. A well-established literature argues that MSMEs are conducive to economic growth. Existing literature does not tell us much about the relationship between MSMEs and democracy. This dissertation examines the relationship between economic development structure and democracy. I demonstrate that we observe a negative correlation between high concentration of MSMEs and political development in the early stages of a country’s economic development (pre-takeoff or takeoff states stages), ceteris paribus. I provide a theoretical framework and causal mechanism that link MSMEs to limited political development due to collective action problems in a decentralized economy. This collection action problem encourages corrupt transactions between MSMEs and government officials that undermine prospects for functioning democracy. I use extensive quantitative analysis and detailed case studies to explain the mechanisms whereby MSME’s appear inimical to democratic governance, and under what conditions MSMEs may advance democratic decision-making.
Comparative Politics, Democratic Development, Less Developed Countries, Political Economy, Small & Medium Enterprises, Statistical Analysis, International Relations, Political Science
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