• Economic Growth
• Bargaining Power
• Leisure
• Political Participation
• Social Capital

This thesis investigates presumptive effects of the political
participation on the economic growth through social
capital accumulation. In the second section, by using
an endogenous growth model, we examine the issue with
a comparison of two economic systems; decentralized and
centralized economy in the latter of which the representative
household internalizes all externalities in social, productive
and private sector, in contrast to the decentralized
economy.
In the third section, we approach the same point by
adopting an efficient bargaining model in which we assume
that average level of the political participation is a contributor
to the labour union’s bargaining strength. Upon this
approach, we develop a comparative analysis by solving the
representative household optimization problem in two different
scenarios, with and without efficient wage hypothesis.
We demonstrate that there exists an effect of the political
participation resulting in a positive stationary growth
rate in all models. Moreover, we found the average level
of political participation to be correlated with the bargained
wage rate and the bargained employment rate under the ef-
ficient wage hypothesis.