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Home » Democracies and how they thrive
Politics & Elections

Democracies and how they thrive

EconLearnerBy EconLearnerNovember 13, 2023No Comments6 Mins Read
Democracies And How They Thrive
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Meanwhile, Russia’s invasion of Ukraine is causing Western democracies to reexamine some of their most fundamental assumptions about how democratic rules prevail.

So what do we know about democracies? How do they stack up against other kinds of governments? And how can they be strengthened? Here’s a summary of our research on the topic.

Democracies are more flexible

“A common perception is that a democracy should be superior to dictatorships because they are able to choose the best people,” says Georgy Egorov, a professor of managerial economics and decision sciences. That is, democratic regimes should oversee greater economic success and have greater longevity. But that’s not always the case, according to a 2012 study by Egorov and colleagues.

Where democracies have an edge, researchers find, is in their ability to adapt to changing circumstances.

Imagine a country made up of generals and economists. The country goes to war and the generals form a government. In this scenario, the government is effective whether it is formed as a democracy or a dictatorship because the best wartime leaders—the generals—are already in place.

But now imagine that the war ends and the country experiences an economic recession. A democracy can adapt by electing economists to power — but a dictatorship cannot. After all, although the generals are unable to effectively manage the crisis, they are unlikely to cede power.

“Here we get a clear prediction that the more democratic a country is, the more capable it is of firing people who are no longer capable and bringing in people who are needed at the moment,” says Egorov.

Democracies limit corruption

Ameet Morjaria, associate professor of managerial economics and decision sciences, is a native of Tanzania but attended school in Kenya, where he had long noticed how strange Kenya’s road network looked. He points out that if you look at a road map of Kenya from the 1970s and 1980s, “you literally see roads that go nowhere.”

The disarray is largely due to mismanagement of public resources that led to corruption, which was more pronounced during periods of autocracy, according to a study by Morjaria and colleagues.

Since gaining independence from Great Britain in the early 1960s, Kenya has seen alternating periods of autocracy and democracy, often under the same leaders. Under autocracy, regions whose population shared the president’s nationality received three times more investment in road projects than their population size would indicate—hence the construction of all those roads seemingly designed without transportation goals. But these funding imbalances have largely moderated during periods of democracy, suggesting the power of democracy to prevent corruption.

“Not only is political competition better regulated, but constraints on executive action are better monitored as parliamentary committees are formed and civil society gains a voice,” says Morjaria. He adds that just the possibility, even a small one, of being kicked out of office “may limit those responsible.”

A “fat” middle class is essential to democracy

Social mobility is important for maintaining a stable democracy. When people believe they are likely to move into a different social class in the future, they will vote in the interests of those future selves, not necessarily their current selves.

But there is a catch: high social mobility is not enough to sustain a stable democracy. Central decision makers must also reasonably believe that they (or their descendants) are equally likely to move up or down the hierarchy. That’s the finding of a separate study by Egorov and colleagues.

For example, if you are currently in the middle class and believe, rightly or wrongly, that you are more likely to become rich than poor, this may lead you to favor an authoritarian government that benefits the rich, rather than a democratic one that works in the interests of the rich. middle class.

That’s why a “thick middle class makes democracy more stable than a thin one,” says Egorov. When the middle class is a large part of the population and middle class citizens feel that they are likely to either stay there or return there, they will be reluctant to give power to the rich.

Limited democracies are often the most aggressive of all

Political scientists think of regimes as a spectrum. On one side are true democracies, in which democratic rules exist and operate. At the other extreme are strong dictatorships, where power is concentrated in the hands of one person or a small group, without any limits or oversight. Between these poles fall limited democracies and weak dictatorships: regimes in which democratic rules exist but do not work, or in which power is concentrated but not absolutely.

These limited democracies and weak dictatorships are more likely to respond aggressively to a foreign conflict than true democracies and strong dictatorships, according to a model by Sandeep Baliga, a professor of managerial economics and decision sciences.

He and his collaborator constructed a game theory model in which conflicts are sparked by leaders who fear being attacked by other nations and being ousted from power by the people they rule.

In their model, limited democracies (and weak dictatorships) tend to be more aggressive in response to a foreign threat than either true democracies or strong dictatorships. This is because voters are likely to punish leaders in a true democracy if they judge a war to be unnecessary, making democratic leaders more unnecessary. Leaders of a limited democracy (or a weak dictatorship), however, face only few checks on their power, so they worry less about the political blow of engaging in an unnecessary war and more about appearing weak in the face of aggression. Meanwhile, strong dictators, confident in their power, care less about appearances, making them less aggressive than weak dictators.

The researchers then tested their model on real-world data. They found that two countries with limited democracies are more likely to go to war with each other than any other combination, while peace is most likely at either end.

For Baliga, the results suggest that the spread of democracy can be dangerous: when not fully implemented, a democratic government could be more aggressive than the regime it replaced. “If you take half measures, you can make things worse,” says Baliga.

In democracies, trust reduces turmoil

Economic crises often lead to political unrest — but not always.

According to research by Nancy Qian, professor of managerial economics and decision sciences, in countries with high levels of trust, a recession is less likely to cause political upheaval than in countries with lower levels of trust.

“If I’m a less reliable person, I might say something like, ‘I don’t understand the details of what our leader is doing, but most politicians are bad and they’re lazy, so it’s probably his fault. Qian explains. Alternatively, a person who trusts may blame factors beyond the control of politicians. “It’s about how likely I am to attribute economic problems to circumstance or luck versus political leadership.”

However, she and her colleagues critically find that this relationship was only seen in democracies, where people had the power to vote for officials out of office.

“We didn’t see this pattern in autocracies, which makes sense,” Qian says. “You can change your leadership to an autocracy by having a revolution or a coup, but that’s harder to do, so there’s not much the people can do,” even if they’re generally slow to trust.

Democracies thrive
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