Chapter 6: The Economic Determinants of Democracy and Dictatorship

Question 1

Classic Modernization Theory

Answer 1

Countries are more likely to become and stay democratic as they develop economically.

States move from being immature (“traditional”) to mature (“modern”)

Question 2

What is one criticism of the Classic Modernization Theory?

Answer 2

That it lacks a strong causal mechanism linking national income with democracy.

Question 3

What does Classic Modernization Theory argue about regime type?

Answer 3

That as states move from being immature (traditional) to mature (modern), it needs to change to a more approriate type of government.

Question 4

Lipset on Modernization Theory

Answer 4

Democracy will be more lilely to survive in economically developet countries

Question 5

The Survival Story

Answer 5

Increasing income promotes the survival of democracy, but it does not affect whether a country becomes democratic in the first place

Question 6

Przeworski on Modernization Theory

Answer 6

The decision to choose democracy or dictatorship depends on the types of outcomes that citizens expect democracy/dictatorship to produce for them

Question 7

A variant of Modernization Theory

Answer 7

Changes in the socioeconomic structure of a country leads to economic development, which promotes democracy

Question 8

On the sizes of a society’s economic sectors

Answer 8

Early stages of development: large agricultural sectors and small manufacturing/service sectors

Question 9

The mobility of assets

Answer 9

Mobile assets = strong exit options possessed by economic elites

Immobile assets = not credible exit options

Question 10

Credible commitment problem

Answer 10

Decisions made according to short-term incentives undermine long-term policy goals

Question 11

When do credible commitment problems occur?

Answer 11

When (a) am actor who makes a promise today may have an incentive to renege on that promise in the future and (b) power is in the hands of the actor who makes the promise.

Question 12

How will the economic elite act if the state is autonomous (does not rely on tax from citizens)?

Answer 12

If they have immobile assets, they will continue to invest.

If they have mobile assets, they will choose to disinvest in the economy.

Question 13

When will democracy (limited government) emerge?

Answer 13

Only when the state depends on its economic elite who has credible exit options

Question 14

Do citizens need to fear state predation?

Answer 14

Not if the state depends on a segment of society with mobile assets

Question 15

Political Resource Curse

Answer 15

Countries that depend on revenue from natural resources will find it difficult to democratize

Question 16

The Demand and Supply side of the Political Resource Curse

Answer 16

Demand: Resource revenue reduce the citizens demand for democratic reform and government responsiveness to that demand

Supply: Resource revenue enable dictators to resist pressure to democratize and help them consolidate their hold on power

Question 17

The Policial Resource Curse on the survival of democracy

Answer 17

1) Institutions that hold the government accountable already exist

2) It will prevent governments from spending natural resource revenue on patronage and coercion

Question 18

The Foreign Aid Curse

Answer 18

While foreign aid makes governments less dependent on their citizens, it makes them more dependent on their foreign aid donors

Question 19

Foreign Aid and Influence

Answer 19

If the aid donor has strategic interests in the recipient country, threats to withhold aid are not credible

If the aid donor has credible exist threats, they can exert influence on the recipient

Question 20

Will foreign aid lead to the emergence of democracy?

Answer 20

Only when 1) the recipient country is dependent on the foreign aid, 2) the aid donor wants to promote democratic reform in the recipient country, and 3) the aid donor can credibly threaten to withdraw aid if its demands are not met

Question 21

Dietrich and Wright on foreign aid

Answer 21

Foreign aid tends to increase de jure political competition, but not de facto political competition

Question 22

The effect of inequality on democracy

Answer 22

Inequality produces competition between the rich and poor; the poor will want to redistribute wealth; the economic elite will step in to block attempts at democratization

Question 23

The mobility of assets’ effect on economic inequality

Answer 23

Mobile assets (credible exit threats) = the economic elite will want to stop democratization

Immobile assets (no credible exit threats) = elites accept democracy because they can curn demands of distribution

Question 24

How does the mobility of assets and the governments dependence on its citizens affect eonomic performance?

Answer 24

Government dependent on citizens with credible exit threats = strong and growing economy

The citizens have no exit threats = continue investing, weak but growng economy

Government is autonomous and citizens have credible exit threats = dictatorial gov. with stagnant economy