The African Business Review May-Jun 2014 | Page 29

have relayed on the conceptualization of Lijphart and Arend
(1999).

Moreover, even the indices that are derived from a
common conceptualization may experience differences, because
the authors of these indices adjust their indices according to a
particular aspect of the original conceptualization. For example,
the conceptualization of Dahl (1971) of democracy contains two
specific concepts:

The concept of participation, which reflects the following
criteria: Freedom to form and join organizations, freedom of
expression, right to vote and eligibility for public office.And the
concept of contestation, which includes the following criteria: The
right of political leaders to gain political support to compete with
other parties, the existence of alternative sources of information,
free and fair elections and the presence of institutions whose role
is to make government policies dependent on votes and other
expressions that reflect citizens’ preferences.

When an index focuses on the concept of contestation, as
is the case of the Polity IV index of Marshall and Jaggers (2001),
and another emphasizes the concept of participation, both indices
will not provide the same measure of the democratization degree
of a given country.

These differences in the manner to quantify this concept
had an effect in the empirical results which look into the impact
of democracy on development indicators or other governance
indicators ( like protection of property rights, level of corruption,
quality of bureaucracy, degree of political stability ...) and were
the cause of theoretical divergences.

This controversy sheds light in the importance of the quality
of democracy indicator and the influence of this choice on the
likelihood of the econometric results and theoretical conclusions.
For the purpose of this paper, we will go beyond the comparative
analysis of indices. However, we will present some arguments
that demonstrate the validity of the “Voice and accountability”
democracy index of Kaufmann et al. (2012). This index, among
other governance indexes, was prepared for the account of the
World Bank.

Kaufmann, Kraay, and Mastruzzi present estimates of six
dimensions of governance covering 199 countries and territories.
These indicators are based on several hundred individual variables
measuring perceptions of governance, drawn from 25 separate data
sources constructed by 18 different organizations (Kaufmann et
al., 2010).
The governance estimates (including ‘voice and
accountability’) are normally distributed with a mean of zero
and a standard deviation of one in each period. This implies
that virtually all scores lie between -2.5 and 2.5, with higher
scores corresponding to better outcomes (Kaufmann et al., 2010).
Collecting data from multiple sources makes Kaufmann, Kraay
and Mastruzzi’s specification of democracy very exhaustive.
But also, this index includes both participation and contestation’s
criteria. Among the sub-indicators that reflect the participation

criterion we mention:
- Freedom of association

- Freedom of speech, of assembly and demonstration

- Freedom of the Press

- Freedom of political participation
- Civil liberties


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It reflects the annual percentage change in the cost to the average consumer of
acquiring a basket of goods and services that may be fixed or changed
at specified intervals, such as yearly. Source: International Monetary
Fund, International Financial Statistics and data files.
Source: World Bank, Worldwide Governance Indicators. http://data/worldbank.
org/data-catalog/worldwide-governance-indicators. Data relating
to 1997 are calculated using the average of the years 1996 and 1998’s
data’s, those of 1999 from the average’s data’s relatives to the years 1998 and 2000
and those of 2001 from the average scores of 2000 and those of 2001.

Among the sub-indicators that reflect the criterion contestation
we quote:

- Accountability of Public Officials

- Equal opportunity, of excessive governmental intervention

- Effectiveness of national Parliament/Congress as a law making
and oversight institution Link between donations and policy

- Government censorship

- Democratic Accountability (that quantifies how responsive
government is to its people)

- How well the population and organized interests can make
their voices heard in the political system

- Policy and legal framework for rural organizations

- Dialogue between government and rural organizations

- Transparency of Government policy

These are the arguments that led us to use this index as the
conceptual quantification of our variable of interest, which we
will use to measure the impact of democracy on inflation, and
that will be the subject of the next section.

Especially since such a conceptualization of democracy
coincides with our perception of this concept (as we described in
the second section), that is, a concept that far from considering
democracy as a populist strategy, but as an institutional process
allowing to different socio-political and economic actors to
participate in