Does Democracy Promote Development? - Center For Global [PDF]

Motivation for the Study. Democracy under stress in several countries. (Venezuela, Georgia, Russia, . . .). Since projec

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Idea Transcript


The Fate of Young Democracies Ethan B. Kapstein INSEAD and Center for Global Development and Nathan Converse London School of Economics

Motivation for the Study Democracy under stress in several countries (Venezuela, Georgia, Russia, . . .). Since project began, democratic governments overthrown in Thailand, Fiji, and Bangladesh. Nascent democracies in Iraq and Afghanistan are vital to U.S. national security.

Goals of the Project Policy-oriented study of young democracies Survey existing literature Compile and analyze a new data set of young democracies

Output: Seminars attended by policy-makers (USAID, State Department, World Bank, etc.) Articles in policy-oriented journals (Journal of Democracy, Survival) Forthcoming book from Cambridge University Press

New Dataset: Young Democracies 1960-2004 1960s 1970s 1980s 1990s 2000- Total Total

Latin America W. Europe E. Europe Sub-Saharan Africa Middle East/N.Africa Asia

26

20

17

52

8

123

6 1 0 15 0 4

3 3 0 6 1 7

11 0 0 2 1 3

5 0 19 19 1 8

1 0 2 4 0 1

26 4 21 46 3 23

Today’s Talk Identify Correlates of Democratic Reversal Descriptive Statistics Regression Analysis

Lessons for Foreign Assistance Questions for Future Research

Possible Correlates of Democratic Reversal Initial Conditions (Engerman and Kenneth Sokoloff 2002)

Economic Performance (Haggard and Kaufman 1995, Svolik 2007)

Economic Policy (Przeworski 1991) Political Institutions (Przeworski et al. 2000, Bernhard et.al. 2001)

The Role of Time (Gerring et al. 2005, Persson and Tabellini 2006)

Democratic Reversal: The Role of Initial Conditions Per Capita Income Inequality

Ethnic Fragmentation

Percentage Reversed

60

Per Capita Income and Democratic Reversal

50 40 30 20 10 0 Less than $1000

Greater than $1000

Percentage Reversed

40

Inequality and Democratic Reversal

35 30 25 20 15 10 5 0 High Inequality

Low Inequality

Percentage Reversed

60

Ethnic Fragmentation and Democratic Reversal

50 40 30 20 10 0 High Fractionalization

Low Fractionalization

Initial Conditions: “Hard Cases” Of 28 democratizations with: Above average ethnic fragmentation Above average inequality Per capita income under $1000 54 percent lasted more than 5 years. 32 percent were sustained for at least 10 years.

“Hard Cases” Sustained for More Than 10 Years:

Country

Year of Democratization

Thailand Bolivia

1978 1982

Pakistan Nepal Benin Zambia Ghana Mozambique Malawi

1988 1990 1991 1991 1992 1994 1994

Economic Performance and Democratic Reversals Few relationships evident from descriptive statistics High growth does not prevent reversal and low growth does not guarantee reversal. Inflation rises more often in cases that were ultimately reversed.

Ave. Growth Rate, first 5 yrs.

Growth and Democratic Reversal 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Reversed

Sustained

Growth and Democratic Reversal, By Region Average Growth, First 5 Years

Percentage Reversed

Latin America Eastern Europe

3.7 -4.6

34.6 9.5

Sub-Saharan Africa Asia

3.8 4.8

63.0 56.5

Region

% of cases with increasing inflation

80

Changes in Inflation and Democratic Reversal

70 60 50 40 30 20 10 0 Reversed

Sustained

Economic Policy in Young Democracies Pressure to increase government spending. Economic reform (trade liberalization, privatization) is apparently not such a “Bitter Pill” after all. Transition to democracy generally yields rapid improvements in health and education.

% of Cases Increasing Gov't Consumption

Changes in Government Spending and Democratic Reversal 55 50 45 40 35 30 Reversed

Sustained

Percentage Reversed

90 80

Economic Liberalization and Democratic Reversal

70 60 50 40 30 20 10 0 Not Open

Open

Liberalized

% of Cases Reducing Infant Mortality

Changes in Infant Mortality and Democratic Reversal 95 90 85 80 75 70 Reversed

Sustained

Political Institutions and Democratic Reversals Weak constraints on executive power boost probability of reversal. Parliamentary systems do not automatically check abuses. Challenge is to build effective checks and balances.

Percentage Reversed

60

Political Institutions and Democratic Reversal

50 40 30 20 10 0 Presidential

Parliamentary

Constraints on Executive Power and Democratic Reversal Percentage Reversed

80 70 60 50 40 30 20 10 0

Weak Constraints on Executive Power

Strong Constraints on Executive Power

Democratic Reversal: The Role of Time Age of the democratic regime Decade in which democratization occurred.

Percentage of Reversals

Democratic Reversals: Cumulative Percentage Distribution 100 90 80 70 60 50 40 30 20 10 0 0

5

10

15

20

25

30

Percentage Reversed

Democratic Reversal by Decade 100 90 80 70 60 50 40 30 20 10 0 1960s

1970s

1980s

1990s

After 2000

Rates of Democratic Reversal 0.25

Before 1980 0.20

Reversal Rate

After 1980 0.15 0.10 0.05 0.00 1

2

3

4 5 6 7 8 9 10 11 12 13 14 15 Years after Democratization

Regression Analysis Examine the relative importance of the factors considered in our descriptive statistics.

Use a Weibull Proportional Hazard Model h t xt

pt p 1 exp

0

x1t

1

x2t

2

x3t

3

x4t

4

where: p = time dependence parameter x1 = economic variables x2 = institutional variables x3 = variables measuring initial conditions x4 = economic policy variables

Initial Conditions Regressions: Impact on Risk of Democratic Failure, Weibull Hazard Model Reporting estimated % change in baseline hazard rate resulting from a one-unit increase in the independent variable (10) (11) (12) (13) (14) Growth, 5yr Ave Log Inflation Executive Constraints Log GDP per capita Pre-1980 Infant Mortality

-0.174 (0.041) 0.220 (0.240) -0.269 (0.097) -0.296 (0.160) 4.693 (2.690) 0.024 (0.008)

***

-0.133 (0.044) 0.272 (0.320) ** -0.225 (0.120) -0.628 (0.086) *** 8.024 (3.970) ***

Gini Coefficient

***

-0.136 (0.045) 0.323 (0.320) ** -0.236 (0.120) *** -0.593 (0.110) *** 7.147 (3.690)

***

-0.134 *** -0.131 *** -0.130 *** -0.229 (0.047) (0.046) (0.045) (0.058) 0.266 0.282 0.286 0.528 (0.330) (0.340) (0.330) (0.340) * -0.215 -0.218 -0.227 * -0.290 (0.120) (0.120) (0.120) (0.110) *** -0.634 *** -0.639 *** -0.637 *** -0.550 (0.080) (0.082) (0.079) (0.120) *** 8.031 *** 8.026 *** 7.896 *** 7.491 (4.290) (4.410) (3.730) (3.730)

Time Dependence Parameter Observations

** *** ***

-0.097 (0.470)

World Growth

Government Consumption (% GDP)

*

-0.230 (0.740)

Post-Colonial

Sub-Saharan Africa

***

1.316 (3.110)

Oil Dependent

E.Europe

(16)

0.031 (0.039)

Ethnic

Lat.Am

(15)

-0.018 (0.130) -0.727 (0.230) -0.970 ** (0.043) -0.301 (0.340) -0.133 *** -0.139 *** -0.144 *** -0.141 *** -0.138 *** -0.141 *** -0.164 *** (0.037) (0.042) (0.042) (0.041) (0.044) (0.041) (0.044) 1.373 *** (0.17) 1052

1.179 (0.12)

1.176 (0.12)

1.185 (0.13)

1.189 (0.14)

1.177 (0.12)

1052

1052

1052

1052

1052

Note: Robust standard errors, clustered on democratic episode, in parentheses *** p

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