Why Do Countries Become/Remain Democracies? Or Don’t? (13): Prosperity

I already mentioned in a previous post how democracy is correlated with prosperity. There’s a much higher proportion of democracies among rich countries than among poor countries. The level of national income is the most important factor explaining inter-country variations in the degree of democracy. If we assume from this correlation that there is a causal link from prosperity to democracy, then low income is the most important barrier to democracy. But the causal link probably goes in both directions. Countries aren’t just democratic – or remain so – because they prosper (among other reasons), but it’s also the case that countries prosper to some extent because they are democratic (disproving the often heard claim that economic development requires authoritarian government).

The correlation between democracy and prosperity is obvious from this paper (at least for non-Muslim countries).

The stronger one of the causal links seems to be the one going from prosperity to democracy rather than vice versa. If you accept that, there’s an additional question (it’s one made famous by Przeworski and Limongi): are there more democracies among rich countries than among poor countries

  • because economic development increases the likelihood that countries will undergo a transition to democracy (this is often called modernization theory), or
  • because economic development makes democracies less likely to fall back into dictatorship?

Przeworski and Limongi found that affluence makes it very unlikely that a shift from democracy to dictatorship occurs, while Boix and Stokes find that there is an effect of affluence on the likelihood of a shift to democracy. Both effects are visible in this study.

It’s likely that the economic effect on transition towards democracy is a bit smaller than the effect halting the opposite transition. The reason is probably the fact that the transition from democracy to authoritarianism is in se much easier than the other way around. Some even say that democracy is inherently suicidal. Whatever the merits of that claim, it’s obvious that an authoritarian leader has the resources and the necessary lack of scruples to cling to power. Especially when his country becomes more prosperous. He can then use this prosperity to bribe the population into submission, and buy the arms and security forces when this doesn’t work.

Again, economic development isn’t a sufficient or even necessary prerequisite for democracy to appear or to survive. Things are more complicated than that and many other factors are in play, including conscious human activity and volition. People can decide to make or destroy a democracy at any level of economic development.

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