Economic development

There is a robust body of research showing a strong, positive relationship between economic development and democracy (Lipset, 1959; Burkhart and Lewis-Beck, 1994). The richer the country, the more likely it is to be democratic. Figure 10.1 illustrates this relationship. It lists the twenty richest and poorest countries (and autonomous territories) in 2017 and their political system type. The countries with the highest per capita income tend to be democratic (with the notable exception of a handful of oil-rich states and Singapore). The countries with the lowest per capita income levels, however, feature far more autocracies. The positive correlation between democracy and development that we see in Figure 10.1 holds across the full sample of countries and over time. Przeworski et al. (2000), for example, find that they can correctly predict the political system type of more than 75 per cent of the 4,126 annual country observations in their 1950 to 1990 data sample just by looking at per capita income.

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Figure 10.1 Per capita income levels (PPP) and political system type, as of 2017.

Source: IMF and Geddes, Wright, and Frantz (2018).

While scholars recognize that there is a strong, positive correlation between development and democracy, they disagree about why. Economic development might make p. 190↵p. 191↵democracy more likely to emerge. Or conversely, we could also observe the same correlation between democracy and development if democracy emerges for any number of other reasons (including by chance), but is more likely to survive in wealthier countries (Przeworski et al., 2000). The earliest modernization theorists, including Seymour Lipset (1959), argued in support of the former—that economic development increases a country’s likelihood of transitioning to democracy. Lipset’s argument was simple: ‘democracy is related to the state of economic development. The more well-to-do a nation, the greater the chances it will sustain democracy’ (Lipset, 1959, p. 31). Contemporary proponents of this view concede that modernization will not automatically lead to democracy. They argue, however, that over the long term, the development process—including industrialization, urbanization, education, communication, mobilization, and a general accumulation of other social changes—make it impossible for leaders to maintain the extent of political control autocracy requires. Several studies provide empirical support for these views (Bollen and Jackman, 1985; Diamond, 1992). Economist Robert Barro, for example, concluded in a comprehensive empirical study in 1997 that ‘increases in various measures of the standard of living forecast a gradual rise in democracy. In contrast, democracies that arise without prior economic development … tend not to last’ (p. 160).

However, a number of influential studies support the second view—they argue that development does not cause democracy, but rather make it more likely to endure (Przeworski et al., 2000; Acemoglu et al., 2008). Proponents of this view argue that transitions to democracy are largely random—they occur for a whole host of reasons that differ across countries making any generalizations impossible to draw. For example, Göran Therborn (1977) emphasizes that many European countries democratized because of wars. Likewise, Przeworski et al. (2000) contend that ‘Some dictatorships have fallen in the aftermath of the death of a founding dictator, such as Franco, uniquely capable of maintaining the authoritarian order. Some have collapsed because of economic crises, and some because of foreign pressure, and perhaps some for purely idiosyncratic reasons’ (p. 8). Regardless of what precipitates the transition, democracy is more likely to ‘stick’ in more affluent countries.

As we noted at the outset of this chapter, wealthy democracies do not become dictatorships (see Diamond, 2008). And as Przeworski et al. (2000) put forth, no democracy with a per capita income greater than about $6,000 has failed (p. 98). Democratic failure in countries we now consider to be wealthy, such as Greece and Uruguay, occurred when these countries still had income below the $6,000 threshold. In the latter instance, though Uruguay is considered developed today, when its military seized power in 1973 its per capita income was under $1,500. Moreover, just as wealth makes democracy likely to endure, so too does its absence make democracy more likely to fail (Przeworski et al., 2000). The implication, therefore, is that wealth is a necessary condition for democracy to survive.

Relatively recently, studies have put forth that the relationship between democracy and development is more nuanced, as we discussed in Chapter 7. Development increases the chance of democracy, but only under specific conditions (Miller, 2012; Treisman, 2015). These arguments contend that greater development enhances the prospects of p. 192↵democratic transition conditional on the occurrence of a leadership transition. Should democracy emerge following such a transition, greater wealth also makes democracy more likely to endure the unstable period that typically comes afterwards.

How should we interpret these different explanations for the relationship between democracy and development? We believe it is safe to say that development plays an important and positive role in democratic development. Policies designed to promote economic growth and development are likely to create conditions conducive to the survival of democracy, should it emerge. Whether or not such development affects the timing of a democratic transition is likely to be debated for some time. At a minimum, however, such policies are likely to make democracy sticky. In other words, supporting development in autocracies is likely to make these countries more resilient to the numerous challenges they will face should democratization occur, thereby raising the prospects that the transition will endure (Svolik, 2015).

It is important to highlight, however, that efforts to enhance growth and development in autocracies do not come without costs. As we discussed in Chapter 6, economic growth makes autocracies more durable. When the economy is growing, authoritarian regimes have greater resources to secure the loyalty of their elite and security services, to placate the public, and fund the repression of the opposition and discontented citizens. For outside actors, therefore, efforts to encourage economic growth and development come with a trade-off—these efforts might initially strengthen the position of an incumbent dictator, but over time, they raise the likelihood that democracy will last once it emerges.

Given the importance of economic development for democratic consolidation, we briefly discuss the most frequently identified explanations for why greater wealth helps sustain democratic rule. Generally speaking, each of these explanations describes different causal sequences, or pathways, through which development increases the relative preferences of citizens and/or elites for democracy over dictatorship. The pathways are inter-related and taken together help explain the observed positive relationship between development and democracy.

Role of a middle class

Another factor that some researchers view as linking development and democracy is the middle class. Some scholars argue that development fosters the development of a more robust middle class, which then puts pressure on the government for the freedoms that democracy provides. Perhaps one of the best-known scholars to emphasize this is Barrington Moore. In his Social Origins of Dictatorship and Democracy (1966), Moore studied the development trajectories of England, France, the United States, p. 194↵Germany, Japan, China, and Russia and famously concluded, ‘No bourgeois, no democracy’. According to Moore, democracy materialized in England, France, and the United States because the urban bourgeoisie emerged as the most powerful political and economic actor. The aristocracy in these countries either did not oppose the bourgeoisie’s democratizing efforts or was destroyed by this group in a bourgeois revolution.

Some scholars view the relationship between development, the middle class, and democracy as direct: socio-economic modernization gives rise to the middle class, which in turn spearheads democratization in a nondemocratic society (Dahl, 1971; Nie et al., 1969; Walsh et al., 2004). Proponents of this view argue that the middle class holds different political preferences than the upper class. The upper class has abundant economic resources and close clientelist ties with political elites that lead them to support an authoritarian status quo. They oppose democratization in large part because it would threaten to redistribute their wealth. The middle class, in contrast, has limited economic resources and lacks connections to powerful patrons in the government. Out of self-interest, the middle class supports a democratic system that would protect their individual rights and moderate private properties from potential encroachment by the government and the upper class (Chen and Lu, 2011; Glassman, 1995, 1997). The middle class is also more likely than the poor to push for democracy, because the middle class has more leisure time and education, which enables it to participate in public affairs more effectively than the poor (Mills and Wolfe, 2000)

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Figure 10.2 Middle class in the world.

Source: OECD, 2010; figures are approximate.

In contrast to a direct and linear relationship between development, the middle class, and democracy, other scholars see it as a process that is highly contingent and fraught with conflict, negotiations, and occasionally setbacks (Acemoglu and Robinson, 2000; Dickson, 2003; Hattori and Funatsu, 2003; Rueschemeyer et al., 1992). Proponents of this view argue that the middle classes (see Figure 10.2 on the middle class around the world) do not necessarily support democracy in principle: like everyone else, they are self-interested actors who want to protect their property and position (Fukuyama, 2012). Instead, the middle-class view of democracy is dependent upon domestic socio-political and socio-economic conditions, which vary across countries. The extent to which the middle class will agitate for democracy has to do with a host of factors such as the economic dependence of the middle class on the state, its perception of its own well-being, its own class cohesiveness, relationships with other socio-economic classes, and its views of the potential for or recent experience with political instability (Chen and Lu, 2011). p. 195↵For example, if a country’s middle class is highly dependent on an authoritarian state for employment and income, then it is likely to favour the status quo and resist democratization. If these conditions were to change—potentially as a result of privatization and other efforts to reduce the state’s role in the economy—then the middle-class orientation towards democracy would also change.

China is an important example where the rise of a middle class has not (yet) brought democracy. The expectation in the West has been that giving China a stake in global institutions such as the World Trade Organization would bind it to the rules-based system that has been in place since the end of World War II. The West expected that economic integration would encourage China to develop a market economy and that, as it grew wealthier, its people would demand democracy. China has not developed a fully market economy, but its impressive growth rates have spawned a growing middle class. By 2030, the middle class in China is forecasted to make up 74 per cent of the population (Chen, 2013). By 2020 the ranks of China’s middle class are likely to outnumber the total population of Europe.

Despite the growth of China’s middle class, pressure to democratize has not materialized. Why? For one, many Chinese remember the bloody Cultural Revolution of the 1960s and have a deeply held fear of chaos. More recent events like the Arab Spring have hardened these concerns. The middle class therefore has perhaps not been willing to push for democratic freedoms and rights because of its concerns about triggering instability. China’s middle class may also feel threatened by the redistributive demands of the poor. As a result, it may support an authoritarian government that protects its class interests. Finally, high repression and fear raise the costs for anyone sympathetic to regime change, creating a formidable barrier against collective action. For these reasons, the growth of China’s middle class has not led to democracy as many modernization theorists would have expected. However, some observers contend that China’s middle class might still play an important role in pressuring for political change. Despite the factors that currently limit middle-class activism, several studies and commentaries document discontent among these segments of Chinese society (Economist Special Report, 9 July 2016). For example, many among the middle classes want more autonomy in their personal lives and are anxious about protecting their private property and assets in a country with weak regulation and rule of law. Although the Chinese middle class is not likely to rise up and fight for democracy any time soon, it is looking for change. Only time will tell if modernization theory’s expectations about the power of the middle class will come to pass in China.

Role of organized labour

Although the middle classes have featured prominently in modernization theory, some scholars argue that a robust middle class alone is not enough to ensure that democratization and consolidation will occur. Instead, influential research has argued that it is organized labour (rather than the middle class) that has consistently championed democracy and served as the critical catalyst. Consequently, some research argues that strong labour movements make democratic outcomes more likely (Rueschemeyer et al., 1992).

p. 196↵In their seminal research on democratization in Western Europe, North America, Latin America, and the Caribbean, Rueschemeyer, Stephens, and Stephens (1992) argue that democracy is most likely to emerge and deepen in those societies that have experienced massive industrialization and capitalist development. They argue that this is because these processes transform class structures, strengthening the working and middle classes and weakening the landed upper class. According to the authors, the middle classes were generally supportive of democracy and the rule of law but opposed extending these rights to or including the lower classes. The threat perception of the upper and middle classes was crucial in determining whether a country would transition to democracy and, if it did, whether it would consolidate. In those cases where the upper and middle classes felt that popular pressure threatened their interests, they opposed introducing democracy or actively sought to support authoritarian alternatives where it was already established. In sum, from this viewpoint it was the working classes, and not the middle classes, whose actions were decisive in establishing and maintaining democracy.

Other studies have highlighted the role of the working classes in democratization and consolidation but emphasize that it is the interaction of the working class with the political elite that matters most. For some, democratization is a multi-faceted process in which the working classes and political elites must negotiate and compromise (Collier, 1999). Przeworski and Wallerstein (1982), for example, see democracy as emerging from ‘class compromise’. They assert that such a compromise can emerge when ‘workers consent to the institution of profit and capitalists to democratic institutions through which workers can effectively press claims for material gains’ (p. 215). In sum, a number of scholars believe the working class plays an important role in democratic development; they disagree, however, about the relative importance of the various groups in the democratization and consolidation process.

In Box 10.1 we discuss the how economic development supported democratization in South Korea and Taiwan.

Changes in beliefs and values

The former President of Tanzania, Julius Nyerere, stated that, ‘Democracy means much more than voting on the basis of adult suffrage every few years; it means (among other things) attitudes of toleration and willingness to co-operate with others on terms of equality’ (Nyerere, 1998, p 27). These values—tolerance, equality, and others such as trust—are a foundation of democratic governance. Some scholars argue that modernization fosters their emergence. Put differently, they put forth that modernization changes people’s beliefs and values in ways that make democracy more likely to develop and endure (Inglehart and Welzel, 2005). The value change that development produces, therefore, is another factor posited to link development and democracy.

In their influential research on modernization theory Ronald Inglehart and Christian Welzel (2005, 2009) assert that, other things equal, ‘high levels of economic development tend to make people more tolerant and trusting bringing more emphasis on self-expression and participation in decision-making’ (Inglehart and Welzel, 2009, p. 36). p. 199↵Although factors such as political leaders and country-specific events shape levels of democracy, Inglehart and Welzel contend that economic development is also critical because it processes produce liberal or freedom-oriented values that increase mass demands for democratic institutions and more responsive elite behaviour. These attitudinal changes are closely related to education and the middle class. Some scholars who have highlighted the importance of the middle class, for example, argue that the middle class is important for democracy because these people rarely support extremist policies and are more tolerant of differences (Bollen and Jackman, 1985; Diamond, 1992; Lipset, 1960).

Subsequent research has found little empirical support for Inglehart and Welzel’s key finding, however (Conroy-Krutz and Frantz, 2017). Once factors such as sample selection bias, country-specific effects, and the endogeneity of values to democracy are considered, liberal and freedom-oriented values do not enhance democracy levels or democratization chances, and neither do they stabilize existing democracies (Dalhum and Knutsen, 2017). Instead, there is even some evidence that the causal arrow runs in the other direction. A country’s experience with democracy may ‘teach’ citizens to become more supportive of these types of values. In other words, time under democracy is associated with a learning process, which in turn explains the observed correlation between freedom-oriented values and democracy.

Economic inequality

In addition to levels of wealth, research has also suggested that the way that wealth is distributed within a country affects levels of democracy. The findings from this body of work parallel those from the modernization literature—namely scholars disagree about whether inequality affects the onset of democracy but widely agree that greater equality supports consolidation (Diamond, 1994; Solt, 2008). Theoretically, inequality should have cross-cutting effects on the likelihood that democracy emerges. Greater inequality raises the incentives for disadvantaged groups to press for more open and competitive politics. Yet the wider the income disparity in society, the more elites have to fear from a democratic transition and the more vigorously they will seek to repress challenges from below (Haggard and Kaufman, 2012; Houle, 2009). As we discuss shortly, research has produced conflicting empirical results. Some studies argue that inequality inhibits democratization. Others suggest inequality can encourage the onset of democracy, that it has a non-linear effect, or that it has no net effect at all. As we noted, however, there is broad consensus across multiple studies that once democracy emerges, economic equality is conducive to its deepening and survival (Houle, 2009).

Studies arguing that inequality hinders democratization are based on a fundamental assumption that economic elites are threatened by democratic reforms because they fear that a politically empowered citizenry will redistribute their wealth. This body of research shares much in common with our previous discussion about the relationship between the middle class and democracy. Highly unequal societies have a small and underdeveloped middle class, which means there are few actors willing and able to push p. 200↵for democratic reform. Most recently, Carles Boix (2003) found empirical support for the view that inequality makes democratization less likely. His research suggests that in addition to inequality, the nature of a country’s economic assets—whether assets can easily be moved out of the country or are immobile—also shapes the elite calculus about the costs of democracy. Democratization will be unlikely in those countries with high inequality and immobile assets. In very unequal societies, the redistributive demands of the worse-off citizens on the wealthy are particularly intense. As a result, the wealthy have a strong incentive to oppose democracy, which would enable the majority of the population to impose heavy taxes on them. The prevalence of highly immobile types of capital amplifies upper class support for the authoritarian status quo. Unable to shift assets abroad to escape the threat of high taxes, capital owners grow more resolute in their efforts to block democracy (p. 3).

The ability of elites to shift assets abroad is not just determined by the nature of their assets, but also by the extent of an autocracy’s integration into financial markets. Research underscores that those autocracies that are integrated into global financial markets are more likely to democratize, even amid high levels of inequality, because the country’s elites can diversify their asset portfolios (Eichengreen and Leblang, 2008; Freeman and Quinn, 2012). Asset diversification decreases both elite stakes in and collective action capacity for opposing democracy. This finding suggests that in a country such as Russia, the elite will have strong incentive to protect the authoritarian status quo. Russia has high levels of inequality and, given mounting Western sanctions against the political elite, is being cut out of Western financial markets. Facing high costs of redistribution and few options to mitigate those costs by moving their money abroad, the Russian elite are likely to strongly oppose democratization.

On the opposite side of the argument, a body of research claims that rising income inequality fosters democratization. Ben Ansell and David Samuels (2010, 2014) argue that democratization will be most likely when disenfranchised economic groups within society begin to grow and demand more from the state. As these disenfranchised groups accumulate assets and wealth, they leave behind the poorer segments of society, generating greater societal inequality. Moreover, these upwardly mobile groups seek to curb the power of the autocratic state and gain credible commitments that their new-found income and assets will not be confiscated. According to Ansell and Samuels (2014), ‘democracy is about fear of the autocratic state, not fear of the poor’ (p. 2). In other words, upwardly mobile groups have greater incentive to protect their new status from the predation by the government and therefore push for democratic safeguards. The authors underscore, however, that this argument applies to income inequality and not land inequality. Because land is more or less fixed in supply, high land inequality means the elite will be wary of higher taxation or even expropriation of their fixed assets under democracy (Ziblatt, 2008).

Finally, qualitative studies have produced conflicting results, suggesting that the relationship between inequality and democratization is non-linear, or that inequality has no systematic effect on a country’s propensity to transition. Using in-depth cases studies of Singapore, South Africa, the United Kingdom, and Argentina, Daron Acemoglu and James Robinson (2000, 2006) argue that the relationship between inequality and p. 201↵democracy resembles an inverted U-shaped curve. Democratization is unlikely in authoritarian governments with low levels of inequality because the demand for it is tempered. It is equally unlikely at high levels of inequality because high inequality increases the incentives for authoritarian elites to repress political demands for redistribution. At moderate levels of inequality, however, democratic transitions are most likely. Another study using qualitative research examining Third Wave transitions (1980–2000) argues that inequality has little explanatory power (Haggard and Kaufman, 2012). It finds that just more than 50 per cent of the democratic transitions during this period conformed to the causal mechanisms specified in the distributive conflict models. In other words, about half of the Third Wave transitions to democracy occurred without the presence of distributional conflict.

Though research has been largely inconclusive about the relationship between inequality and democratization, most scholars agree that social equality facilitates democratic consolidation (Houle, 2009). Put differently, inequality raises a country’s risk of backsliding from democracy to dictatorship. Data show that those democracies that are able to reduce levels of inequality last an average of eighty-four years. Those democracies where inequality grows, in contrast, survive just twenty-two years (Houle, 2009, p. 43). In countries in Central America such as Guatemala, El Salvador, and Honduras, high levels of inequality have made it difficult for democracy to deepen. Economic inequality makes democracy fragile because it creates incentives for elites to subvert it so that they can capture a larger share of the country’s wealth (Tilly, 2003). In unequal democracies, redistribution is more extreme than in equal societies, making democracy costlier for elites. Indeed, research shows that high levels of inequality in a democracy raise the likelihood of coups (Houle, 2016).

The relationship between inequality and democracy is an important one and adds additional nuance to the expectations that modernization theory produces. Specifically, work on inequality suggests that democracy can survive in relatively poor countries if income is distributed equally. In his research, Christian Houle (2009) underscores that since World War II many poor countries where wealth was distributed relatively equally, perhaps most notably India, have successfully established and sustained democracy. At the same time similarly poor but economically unequal countries, such as Nigeria, Peru, and Turkey, have oscillated between dictatorship and democracy. The key difference between these two groups, Houle asserts, is that inequality made it difficult for the latter group to sustain democratic regimes. Similarly, other scholars have noted that high levels of inequality in Latin America have posed challenges for democratic consolidation there (Karl, 2000) (for more on this relationship between inequality and regime type, see Figure 10.4). Costa Rica and Uruguay have experienced relatively stable periods of democratic consolidation, perhaps in large part because they are two of the more economically equal societies in Latin America. South Africa is considered to be a success story of democratization, but persistent inequality continues to cause high levels of social and political instability, challenging the quality of its democracy (Sisk, 2017).

Inequality is clearly not just an issue plaguing the developing world, and research shows that inequality in developed democracies erodes their democratic quality as well. This dynamic is particularly concerning given that inequality has been rising in all of p. 202↵the world’s upper and middle-income democracies since at least the 1980s. Greater inequality concentrates power in the hands of the rich, which is readily converted into greater political influence. Studies show, for example, that elected representatives are more responsive to the demands of the rich, including in the United States (Bartels, 2016). Robert Dahl and others theorized that as a result of their frustration and resentment, poorer citizens do not press for more political and economic equality, but instead become disengaged from politics (Dahl, 1971; Pateman, 1971). Numerous studies support this claim by documenting the negative effects of inequality on a range of political activities. Inequality has been found to reduce interest in politics, views of government responsiveness, and participation in elections (Boix, 2003; Goodin and Dryzek, 1980; Solt, 2004).

The data in Figure 10.3 illustrate the relationship between inequality and the quality of democracy. (Here we use a continuous measure of political system type to capture p. 203↵differences in ‘levels’ of democraticness, given the emphasis in the literature on democratic quality.) Those countries with the lowest inequality, as measured by the GINI coefficient, are all full democracies. In contrast, high inequality has been a barrier to democratic deepening.

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Figure 10.3 Most democratic countries in the world, GINI index and per capita incomes (nominal).

Source: Economist Democracy Index, OECD, IMF.

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Figure 10.4 Economic inequality and political system type.

Source: World Bank, Economist Democracy Index.

Economic growth

As we did in our discussion of authoritarian breakdown in Chapter 7, we distinguish here between levels of development and acute changes in economic conditions. In addition to levels of economic development, scholars posit that changes in economic growth rates and inflation affect democratic development. Economic recessions, for example, are one of the most robust predictors of the breakdown of democracy (Przeworski and Limongi, 1997; Przeworski et al., 2000; Svolik, 2008, 2015). One study finds that between 1848 and 2008, a democracy was more than twice as likely to revert to dictatorship during an economic decline than during a period of economic growth (Svolik, 2008). Likewise, another study finds that most democratic failures are accompanied by some economic crisis: in twenty-eight out of thirty-nine instances of democratic failure, there was a drop in income during at least one of the two preceding years (Przeworski et al., 2000). Economic crises have precipitated democratic backsliding in several countries in Latin America. Democracy weakened in Ecuador after a severe economic downturn led to a coup to oust the maligned leader Jamil Mahuad in 2000. The rise of autocrat Alberto Fujimori in Peru and the 1973 coup that ousted democratically-elected leader Salvador Allende from power in Chile were also both preceded by an economic crisis (Harmer, 2011).

Economic crises are especially dangerous for young and poor democracies; when democracies break down, nine in ten do so before they are twenty years old and/or when their annual GDP per capita is less than $4,900 (Svolik, 2013). More consolidated democracies, in contrast, tend to be more immune to such downturns. In consolidated democracies, an economic crisis may lead to low levels of public satisfaction with the incumbent government, but not necessarily fuel public dissatisfaction with the way democracy works. For example, the global financial crisis beginning in 2008 hit Ireland and Iceland hard, but both governments were able to weather the storm (Cordero and Simón, 2016).

Why would an economic crisis in a democracy lead to breakdown? After all, unlike in a dictatorship, voters in a democracy have the opportunity to remove those leaders that deliver poor economic results. Milan Svolik (2013) articulates an argument linking economic decline with democratic failure. He argues that in new democracies, popular dissatisfaction with the performance of individual politicians turns into doubts about the value of democracy as a political system. Because newly democratic politicians do not have established reputations, voters are quick to conclude that ‘all politicians are crooks’. Politicians, in turn, respond by conforming to these expectations and act like crooks even if most of them may be willing to perform well in office if given the appropriate incentives. Once a new democracy descends into the trap of pessimistic p. 204↵expectations, even voters who are initially optimistic about the ability of elections to motivate accountable behaviour rationally conclude that their particular democracy cannot deliver governance that is more responsive than that under a dictatorship. Citizens grow unwilling to defend democracy against attempts to subvert it, thus eliminating a key check on politicians or parties with authoritarian ambitions.

Just as economic troubles can undermine democracy, so too can positive economic performance sustain it, even in less developed countries (Cheibub et al., 1996). Democracies are more likely to survive when they grow at a faster rate (e.g. more than 5 per cent annually) than when they grow at a slower one. According to one study (Cheibub et al., 1996), poor democracies (those with per capita income under $1,000) are expected to last less than five years if their income falls, compared to 12.5 years if their income grows. In sum, economic growth is particularly important for sustaining democracy, especially if democracy emerges in developing countries.

Clientelism

In the final section of this chapter, we discuss how perverse economic incentives can obstruct democratic consolidation. Under dictatorship, many regimes rely, in part, on the distribution of patronage to maintain support. Patronage can be dispensed in many forms, including cash hand-outs, public sector employment, access to public services like housing or healthcare, and preferential access to lucrative state contracts. Regardless of the form patronage takes or how it is distributed, the underlying logic is straightforward: politicians (the patrons) supply benefits in return for the recipient’s (the client’s) support. This process enables autocrats to create political subservience and socio-economic dependence on the regime (Grzymala-Busse, 2008; Wintrobe, 2000). Political systems that are based on this logic—the exchange of political goods and services for votes—are often called clientelist systems. Particularly in personalist dictatorships, such as Georgia under Eduard Shevardnadze (1995–2003) and Kyrgyzstan under Askar Akayev (1990–2005), clientelist networks are deeply entrenched and serve as the lifeblood of the political system.

When new democracies emerge in these settings, clientelist networks are difficult to dismantle—especially the underlying culture of patronage-based politics. Both Georgia and Kyrgyzstan experienced democratic transitions following protest movements in 2003 (the Rose Revolution) and 2005 (the Tulip Revolution). Clientelist legacies in both countries however, have obstructed their democratic development. Not only do elites become accustomed to using political office for personal gain, but their political experience and approach to politics is informed by these patterns of contingent exchange. Citizens also grow used to this pattern of politics and come to expect politicians to provide patronage (Shefter, 1994). Despite the transition to democracy, clientelism remains a familiar tool for building loyal networks of supporters.

Definitions of clientelism emphasize four elements (Hicken, 2011). First, clientelist exchanges are based on personal relationships. Although these networks may be complex and ‘reach from the summits of national politics down to the municipal level’ p. 205↵(Kitschelt, 2000, p. 849), they are at their core highly personal in nature. Second, clientelism is conditional—a quid pro quo. It is rooted in the regular exchange of resources for votes. Third, definitions of clientelism emphasize the asymmetry between client and patron. In some cases, the power imbalance is severe; clients, especially poor rural ones, have few opportunities to withdraw from the relationship. Patrons have tools to enforce client compliance, such as social ostracism and the withholding of benefits. Clients, in contrast, have few options to force a patron to honour his or her commitment. Doing so requires a large number of clients to coordinate their threats to withdraw support. Finally, clientelist exchanges are repeated and ongoing. The iterative nature of these relationships allows politicians to observe which voters keep their promises and which can be swayed, enabling them to calibrate the size of their offers (Kitschelt and Wilkinson, 2007; Stokes, 2007). Such repeated interactions also create trust between the parties over time.

Clientelism is distinct from other forms of political exchange, such as pork barrel politics or populist promises to redistribute resources to marginalized segments of society (Hicken, 2011). All of these tactics are carried out with electoral considerations in mind: politicians expect that the benefits they hand out will help them win elections. The primary distinction between clientelism and these other political tactics, however, is the nature of the targeted groups. Pork barrel politicians and populists make promises to entire groups or constituencies. Importantly, no member within the targeted group can be excluded from the benefit on the basis of a lack of support for the politician or party. Clientelism, in contrast, is more individualized and particular. Clientelist states structure their networks in ways that allow patrons to target benefits to individuals or small groups of voters and monitor their political support. Allen Hicken (2011) uses an example from Singapore to illustrate clientelism’s targeted nature. In the 1980s, the Singapore government changed its vote-counting system to allow the government to tally and report votes at the ward level, which in Singapore roughly equates to an apartment block. As the vast majority of Singaporeans live in public housing, the change gave the government access to detailed data about the distribution of its support. The ruling People’s Action Party subsequently tied housing services to support for the regime. Apartment complexes that supported the opposition could expect to be last on the list for upgrades and improvements (Tremewan, 2016). Similarly, in Nigeria (see Box 10.2) deeply engrained clientelism and corruption are considered major factors hindering democratic development.

p. 206↵Clientelism has profound negative implications for the quality of democracy and how citizens view their government (Hicken, 2011). Stokes (2005), for example, argues that clientelism undermines democratic accountability. Rather than voters holding parties and politicians responsible for their performance, parties and politicians hold voters accountable for their vote. As a result, voters in clientelist systems are, on average, more cynical and disillusioned than their counterparts in non-clientelist settings (Kitschelt and Wilkinson 2007, Kitschelt et al., 2010). Clientelism also hinders political party development, which impedes democratic development. In particular, clientelist leaders do not invest in the development of programmatic political parties, defined as parties that compete based on a policy platform. Instead, leaders in clientelist systems compete based on charisma and their own individual networks. The failure to build programmatic parties is detrimental to democracy because these parties produce lower electoral volatility, lower party-system fragmentation, and higher levels of party–system institutionalization (Kitschelt et al., 2010).

Clientelism also distorts economic incentives. Empirical research shows that clientelist governments underprovide public goods and are more corrupt (Keefer, 2007). Such governments are less interested in providing public goods because they cannot exclude non-supporters from enjoying the benefits of these services. Instead, they spend a greater proportion of their budgets on targeted expenditures, such as jobs and public works projects (Keefer, 2007). As a result, clientelist systems are associated with large public sectors and public sector inefficiency (Gimpelson and Treisman, 2002; Grzymala-Busse, 2008; Hicken and Simmons, 2008). Finally, numerous studies have found a strong link between clientelism and corruption, or perceptions of corruption (Hicken, 2011). Matthew Singer (2009) contends that clientelism may drive corruption in three ways. First, clientelism—or certain forms of clientelist exchange such as vote buying—may be illegal. Second, by undermining the ability of citizens to hold public officials accountable, clientelism may foster a culture of impunity and make it difficult to punish individuals for corrupt behaviour. Third, the demand for resources to support clientelist exchange may increase the incentives of politicians to raise funds through illicit means.

In sum, those new democracies that emerged from autocracies with deeply entrenched clientelist networks are likely to struggle to overcome these practices. Clientelism constitutes significant barriers to democratic consolidation.

Conclusion

This chapter has focused on the relationship between economic factors and democracy. Although it remains unclear whether economic development causes democracy, there is broad consensus that wealth sustains democratic systems. Likewise, research is inconclusive about whether inequality influences democratization, but there is strong agreement that inequality is detrimental to the quality and duration of democracy.

Economic recessions are also one of the most robust predictors of the breakdown of democracy. Severe financial crises are especially problematic. On the eve of the Great p. 208↵Depression in 1929, for example, Germany was one of the world’s leading industrial powers, the labour force was well educated, and communications and mass media were extensive. Germany rated highly on all of the most robust economic indicators that scholars posit to be conducive to stable democratic systems. And yet, just four years after the crash of the New York stock exchange in 1929, Adolf Hitler seized power and obliterated German democracy.

The German example is extreme, but it underscores the fragility of democracy. A severe global financial crisis, akin to but more significant that the 2008–09 global financial crisis, could further fuel the flames of xenophobia and authoritarianism. Already public support for populist parties and leaders has been on the rise across Europe without the presence of major economic hardship in these countries. It could take just one major event—such as a major global trade war or economic default in Italy—to trigger such a global financial crisis. As this chapter has outlined, that would create socio-economic conditions inhospitable to democracy.

Finally, we would like to conclude this chapter where we began it—with the example of democratic decline in Turkey. Turkey is one of the most affluent countries in recent times to experience democratic failure. Scholars are likely to debate whether Turkey debunks our long-standing conventional wisdom that economic development safeguards democracy for some time. Certainly if democratic backsliding gives way to democratic failure in Hungary and Poland it would trigger a major re-evaluation of our understanding of development’s relationship with democracy. As we will discuss at length in Chapter 14, democracies are dying differently today than they have historically. Although economic development is likely to remain an important guardrail for democracy, time will tell whether it continues to provide the guarantee that we long assumed it would.