| Abstract: |
Since the “third wave” of democratization began in 1974, nearly 100 states
have adopted democratic forms of government, including, of course, most of the
former Soviet bloc nations. Policy-makers in the west have expressed the hope
that this democratic wave will extend even further, to the Middle East and
onward to China. But the durability of this new democratic age remains an open
question. By some accounts, at least half of the world’s young
democracies—often referred to in the academic literature as being
“unconsolidated” or “fragile”—are still struggling to develop their political
institutions, and several have reverted back to authoritarian rule. Among the
countries in the early stages of democratic institution building are states
vital to U.S. national security interests, including Afghanistan and Iraq. The
ability of fledgling democracies to maintain popular support depends in part
on the ability of their governments to deliver economic policies that meet
with widespread approval. But what sorts of economic policies are these, and
are they necessarily the same as the policies required for tackling difficult
issues of economic stabilization and reform? Conversely, what sorts of
economic policies are most likely to spark a backlash against young and
fragile democratic regimes? Do the leaders of young democracies face
trade-offs as they ponder their electoral and economic strategies? These are
among the questions we explore in this paper, which provides an overview of
the monograph we are currently writing on the economics of young democracies.
We do so first by exploring the hypothesized relationships between democratic
politics and economic policy, as well as the findings of several important
empirical studies with respect to the economic performance of young
democracies around the world. We then provide some descriptive statistics on
how the new democracies have fared in practice, making use of a new dataset
that we have compiled (and which, among other things, is more up-to-date than
most others cited herein). Do the data reveal any distinctive economic
patterns with respect to democratic consolidation and reversal? We will show
that they do. In particular, we find that deteriorating or stagnant economic
performance constitutes a red flag or warning signal that the country is at
risk of democratic reversal. Moreover, we find considerable variation in
economic performance, suggesting that the design of political institutions in
new democracies may have a significant influence on the probability of their
survival. |