Learning Democracy

• In Event: Collective Action, Conflict, and Political Change from a Historical Perspective

Abstract

The relationship between economic development and democratization has proved quite challenging to understand. Scholars have often reached contradictory conclusions about whether democracy promotes economic development and, conversely, whether developed countries are more likely to democratize. Despite this controversy, a strong positive correlation between per capita income and democracy in the contemporary world remains a well-established empirical fact. This paper examines the ability of a learning model to explain the joint patterns of economic growth and democratization observed over time and across countries since the early nineteenth century. In our model, own and neighbors' past experiences shape elites' beliefs about the effects of democracy on economic growth and their likelihood of retaining power. These beliefs then influence elites' choices concerning whether to transition their country into or out of democracy. Using nineteenth-century data to calibrate initial beliefs, our model fits a large fraction of the transitions observed during the twentieth century. In particular, our results show that learning from neighbors' experiences is crucial in explaining recent waves of democratization. Our model also predicts reversals to authoritarianism if the world were presently hit by a shock of the size of the Great Depression.

Author

• Sergio Montero, University of Rochester