There is no consensus among social scientists or policy makers on how the democratic properties of a political regime in a country affect the same country’s economic growth. The extremely complex phenomena of “political regimes” and “economic growth” are probably interrelated and connected in many different ways. If one wants to dig deep into the question of how democracy affects growth, one will have to reflect on arguments with genesis not only in different theoretical traditions, but also stemming from different subjects in the social sciences and humanities. The question of how democracy affects growth will depend among others on how one defines democracy; this study is relying on a relatively broad definition. The question can be broken further down into questions about which institutional or other aspects of democracy that affects growth. One can also ask through which channels, for example investments or technological change, growth is caused. The relationship under study is not independent of contextual matters, forcing a student of the subject to take historical, socio-structural and international conditions seriously.This study discusses the concept of democracy, different channels of growth and evaluates several theoretical arguments before presenting an empirical analysis. In the statistical part of the study, using OLS and WLS regression as well as a more advanced Pooled Cross-Sectional - Time-Series analysis on large global country-samples from 1970 to 2000, democracy is found to be significantly growth enhancing given some specifications of variables, models, methods and samples. However, there is no necessary or even robust relationship between democracy and growth. Other specifications give non-significant results. The channels of growth and their relation to democracy are thereafter estimated empirically by the technique of growth accounting. Further, analysis of variation show that democracies vary substantially less in their growth performances than more authoritarian regimes. The effects of democratization and “autocratization” processes within countries are also studied, and are generally found not to affect growth systematically. The study examines three of the world’s recent economic success stories, Singapore, Botswana and Mauritius, and tries to show how authoritarian traits of the regime in the first case, and democratic traits in the two latter, probably contributed to the growth of their respective economies. This seemingly contradiction disappears when taking into account the complexities and context-dependencies of the effect of political regime type on economic growth.