Democracy and Economic Policy: A Historical Perspective
Author(s)
Gerring, John
Abstract
In considering the fit between democracy and development, a central and recurring issue concerns the capacity of democratic governments to institute painful economic reforms. Unelected leaders can impose policy solutions, while elected leaders must persuade, and persuasion is difficult wherever reforms force well-organized constituencies to suffer losses. Accordingly, it is plausible to suppose that authoritarian leaders may be more capable of implementing tough economic reforms. In contrast to this well-established view, we argue that economic reform is more likely under democratic auspices than under authoritarian auspices – with one important proviso. A democratic advantage appears in the area of economic policymaking only over time, as a regime matures. We anticipate superior economic policies and performance to arise in states that have accumulated significant democratic experience. In this paper we approach the question of economic reform in a case study format, in the hopes that a more focused examination of these questions will allow us to probe causal mechanisms that may be at work. Why do polities with democratic constitutions show improved capacity, over time, to achieve and sustain economic reforms? Why does democratic “stock” seem to matter (as judged by large-N cross-country analyses)?
