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Transition Report 2013 Stuck in transition?

Markets and
democracy


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Markets and democracy

Markets and democracy in the transition region

Why have some countries in the transition region succeeded in building sustainable democracies, while in others political reform has stagnated or even gone into reverse? Evidence suggests that countries with higher per capita income are more...

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Explaining democracy

Democracy may not be inevitable, but it has been gaining ground steadily over time. Representative democracy has spread pervasively around the world over the last 200 years. In the first half of the 19th century it was limited to a few Swiss...

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Economic development and democracy: theory

The expansion of democracy around the world coincided – albeit imperfectly – with the industrial revolution and global growth. The first major study demonstrating the relationship between economic development and democracy was undertaken by...

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Underlying democratic beliefs

At the core of a democratic system lie regular, free and fair elections. By definition, fair democratic elections are uncertain events: before they are held, their outcome is unknown. After they have taken place, there is no guarantee that the...

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The role of inequality

Another approach to understanding the causes of democratisation focuses on incentives that may encourage key participants in the political process to abide by an electoral outcome. Given that a winning majority has the potential to redraw the...

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Natural resources and the “rentier state”

Faced with the risk of high taxes imposed by a democratic majority, a wealthy minority has two options to protect itself: it can invest in repression and authoritarian rule, or it can take its assets elsewhere. If wealth is mobile, capital...

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Conclusions from the literature

We can draw the following conclusions from this brief review of the academic literature on the subject. Although the research community remains divided, there is strong support for the proposition that increases in economic development are...

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Reform and democracy

Reform and democracy
The collapse of the Soviet Union and communism was a political “big bang” moment, giving countries in the transition region an opportunity to recreate their political institutions. To what extent, and at what speed, should this result in the...

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Economic development and democracy: evidence

Does economic development encourage democratisation in transition countries? The literature suggests at least four reasons why average per capita income might influence a country’s propensity to democratise. At higher average income levels,...

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Natural resource rents

Natural resource rents
Table 2.2 also shows that, worldwide, a country’s level of natural resource rents – defined as the share of GDP that stems from natural resource extraction – is a significant negative predictor of levels of democracy five years ahead. In the...

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Do market reforms promote democracy?

Do market reforms promote democracy?
Based on the foregoing analysis, one would expect market reform to support the process of democratisation indirectly by contributing to rising GDP per capita. The question is whether it has also directly helped democratisation in the transition...

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Individual support for democracy

Individual support for democracy
The analysis so far suggests that early market reform and economic development promote democratisation and prevent democratic reversals, while natural resource endowments can be a hindrance. The causal channels through which these factors operate...

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Case studies

The following country case studies illustrate many of the key factors driving democratic development in the transition region. They have been selected to highlight particular questions, such as why certain countries are less democratic than might...

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Conclusion

Debate continues over the most relevant factors leading to sustainable democracy. However, support for modernisation theory – the notion that economic development over time leads to democracy, albeit with some exceptions – has received strong...

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Box 2.1. The role of the middle class

What is the role of the middle class in promoting democratic transition? In much of the literature on modernisation, starting with Lipset (1959), there is a strong belief that the middle class – once it reaches a certain size – is a bulwark of...

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Annex 2.1. Regression analysis of preferences for democracy

Table A.2.1.1 1 Established democracies Less democratic regimes Dependent variable: Support for democracy Baseline category: Household moved down the income ladder between 2006 and 2010 Household moved up the...

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References

D. Acemoğlu and J. Robinson (2006)“Economic backwardness in political perspective”, American Political Science Review, Vol. 100, pp. 115-131. D. Acemoğlu, S. Johnson, J. Robinson and P. Yared (2009)“Reevaluating the modernization hypothesis”, ...

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