Democracy And Growth: Economic Determinants And The Moderating Effect Of Democratic Accountability On Economic Growth

Abstract

This study investigates the economic determinants of growth and the moderating role of democratic accountability in five ASEAN countries (Indonesia, Malaysia, Thailand, the Philippines, and Vietnam) from 2000 to 2022. Using a structural equation reduced form model, it analyzes the direct and indirect effects of trade openness, foreign direct investment (FDI), and government expenditure on education and health, with mediation by the agriculture sector and moderation by freedom of speech and accountability. Results show trade openness enhances growth directly but has negative indirect effects via agriculture. FDI has no significant impact. Education expenditure strongly promotes growth directly and indirectly, while health spending has only a direct effect. Democratic accountability strengthens the growth effect of education spending but weakens that of health. These findings highlight complex links among policy, governance, and sectoral change.