1. Social Effects of Democracy
Political Economy of the Global South
Prof. Tyson Roberts

2. What is Democracy?
“that institutional arrangement for arriving at political decisions in which individuals acquire the power to decide by means of a competitive struggle for the people’s vote” (Schumpeter 1947)
“a political system which supplies regular constitutional opportunities for changing the governing officials” (Lipset 1959)
“a system in which parties lose elections (Przeworski and Limongi 1991)

3. What are some social requisites for a stable democracy? (per Lipset)
Education
Economic development
Income level
Industrialization
Urbanization
Access to telecommunications
Access to media

4. What are arguments democracy might help or hinder economic performance
What are arguments democracy might help or hinder economic performance? (per PACL)
Help:
Accountability => good governance
Transparency => efficient allocation of resources
Hinder:
Unleash demands for consumption => less investment
Enable organization (e.g., unions) => less investment

5. What are some economic effects of democracy? (per PACL)
Poor countries: few effects
Wealthy countries:
Less labor participation
Less labor exploitation
Higher productivity

6. How does regime type affect the probability and manner of democratic transition? (per Geddes)
Military dictatorships prefer negotiated democratization to revolution or war
Personalist leaders have most to lose from democratization, less willing to democratize than military or party-based dictatorships
Monarchies that share power with the family are more durable than monarchies with concentrated power

7. Why did dictatorships fall during the 1990s?
Withdrawal of support from USSR & West
Example of overthrows in E. Europe
Aid conditional on democratization
Miscalculation – sycophants tell dictators they can win multiparty election, then they lose
Kaunda in Zambia
Obasanjo in Nigeria
Suharto in East Timor (independence vote)

8. What aspect of democracy did aid donors emphasize post-Cold War?
Multiparty elections

9. How might democracy affect proneness to political violence?
Reduce political violence
Accountability => good governance (less need for violence)
Legitimacy => opposition should peacefully accept government policies
Increase political violence ?

10. Differences in preferences
Why does ethnic diversity hinder investment in public goods? (per Easterly, Collier CH2)
Differences in preferences
where to put roads, language taught in schools, where to put hospitals, etc.
Less willingness to spend on public services perceived to aid other groups
Greater willingness to hurt economic growth by taxing other ethnic groups for redistribution
Example: Indians in East Africa

11. Does ethnic diversity always lead to low growth and conflict
Does ethnic diversity always lead to low growth and conflict? (Collier, CH2) No
Diversity may increase productivity in the private sector
More points of view, different skills, etc.
Diversity is less damaging at higher income levels
Ethnic identities can be suppressed in favor of national identities

12. How does democracy affect political violence empirically?
No effect when looking at all countries
Middle and high income countries => democracy reduces risk of political violence
Low income countries => democracy increases risk of political violence
Why?

13. Example: Iraq

14. Under Saddam’s authoritarian rule, 1979-2003
Kurds and Shiites repressed
Occasional state-sponsored violence (e.g., 5,000 civilians killed by mustard gas in 1988)
Overall, fairly stable

15. Democracy introduced in 2003
Kurdistan has own army
Massive Shiite vs. Sunni violence
ISIS takes over Western part of country

16. Why democracy does not reduce political violence in low-income countries
Voters uninformed, don’t understand choices in election
Weak state capacity + economic dependence on commodities
Poor economic performance may be due to external shocks (e.g., commodity prices), not government performance
Voters more likely to vote based on ethnic identity
Temptation for politicians to intervene in economy to reward loyal supporters

17. What are options available to politicians in low-income countries?
Become a good government – DIFFICULT!
Lie to electors – EASY BUT CREATES CYNICISM
Scapegoat a minority – EFFECTIVE! BUT UNDERMINES PEACE & PROSPERITY
Bribery– WORKS SHORT TERM BUT UNDERMINES CAPACITY
Intimidation – WORKS SHORT TERM BUT CAN CREATE BACKLASH
Restrict the field to exclude strong candidates – WORKS SHORT TERM BUT CAN CREATE BACKLASH
Miscount the votes – WORKS! BUT OBSERVERS DON’T LIKE

18. What are country examples of these tactics?
Results?

19. What to do?
Promoting multiparty elections in poor countries can result in violence
For STABLE democracy, aid donors should promote the social requisites
Education
Economic development
Good governance (rule of law, low corruption, etc.)
Independent media, etc.

20. Final Exam 10 multiple choice questions 3 essays, choose 2
Big ideas, 1 per week
3 essays, choose 2
Extra credit questions based on presentations
Send me your slides

21. Sample Essay Questions
How do international economic relations affect economic development and democracy?
Address aid, debt, FDI, and trade
Give specific examples
Draw on class readings to explain economic and political outcomes in Bolvia and Zaire, as portrayed in the films.
Use at least one major reading from before the midterm and one after the midterm

22. Sample Essay Questions
How does natural resource endowments and colonial history affect economic prosperity and democracy in the Global South?
Why did many Global South governments use state-led development policies during the post-WW2 period and abandon those policies later? What were the economic and political results?
How does the World Bank define “institutional quality”? What are some determinants and effects of good vs. poor institutional quality?