Why Democracies Fail

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Journal of Democracy, Volume 19, Number 4, October 2008, pp. 57-68(Article)

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WHY DEMOCRACIES FAIL

Ethan B. Kapstein and Nathan Converse

Ethan B. Kapstein is Paul Dubrule Professor of Sustainable Development at INSEAD in Fontainebleau, France, and Visiting Fellow at the Center for Global Development, in Washington, D.C. Nathan Converse is pur-suing a doctorate in economics at the London School of Economics.

Since the great wave of decolonization began in the 1960s, more than 120 episodes of democratization have taken place in nearly 90 coun-tries.1 Those democracies established since 1980 have survived at higher rates than democratic regimes founded in the two decades prior to that year. Yet it is clear that many of today’s developing-world and post-communist democracies—including those in such countries as Bolivia, Georgia, Venezuela, and Russia—are backsliding and at risk of reversal, if this has not already occurred.New data have the potential to shed more light on the causes of demo-

cratic collapse.2 To date, experts have tended to focus on economic per-formance as the key to whether young democracies live or die.3 But is this obviously the case? During the early 1990s, the postcommunist de-mocracies of Central and Eastern Europe experienced economic distress comparable to the Great Depression but did not backslide from democ-racy. Conversely, years of robust growth in Thailand did not prevent a military coup there in 2006.What if institutions—and in particular, political institutions—play

the crucial role in democratic consolidation? The data suggest that this is so, and further point to institutions that place effective constraints on executive power as being of special importance.4 When a leader, whether a president or a prime minister, faces only weak constraints, the temptation grows to gather economic and political power into executive hands. As power becomes more concentrated, members of other branch-es of government, investors, and agents of civil society begin to doubt whether public policies will promote the general welfare. It is notable in this context that one of the first things that would-be authoritarian lead-

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Poverty, Inequality, and Democracy

58 Journal of Democracy

ers try to do is roll back existing constitutional constraints. The actions of presidents Hugo Chávez in Venezuela and Vladimir Putin in Russia are cases in point. Historically, data sets on democratization episodes have tended to

lump together democracies founded before 1960 with those constituted after that date. Our data set focuses exclusively on the latter group, made up mostly of developing nations. Focusing on young democracies avoids the problem of weighting the data too heavily with democratizations in today’s advanced industrial countries. The data set upon which this es-say is based is also one of the first to include all cases of democratiza-tion in post-Soviet states.5

Beyond the growing availability of data on developing and postcom-munist countries, we believe that there are several good theoretical rea-sons to focus on relatively recent democratizers. First, as Samuel P. Huntington and more recently Philip Keefer have stressed, the leaders of young democracies may, by definition, have difficulty establishing their legitimacy with the electorate and making promises that their constitu-ents consider credible. This suggests that the very youth of a democracy may cause governance problems that could lead to premature collapse. As Huntington has written, the world’s “new democracies are, in effect, in a catch-22 situation: lacking legitimacy they cannot become effec-tive; lacking effectiveness they cannot develop legitimacy.”6

In a similar vein, young democracies are likely to suffer from institu-tional weaknesses. This is to be expected: Institutions take time to build and to develop credibility. Central banks need to maintain stable monetary policies over time if they are to establish their inflation-fighting creden-tials, and judicial authorities need time to establish that they are indepen-dent from political intrusion. Parliaments and executives must shape their roles and responsibilities so as to forge power-sharing arrangements that are productive and effective. Political parties also take time to form and coalesce around particular themes that aggregate the interests of their core constituents. Not surprisingly then, political scientists have found that the sheer amount of time that a democracy has existed is positively related to its chances for survival. In other words, the longer a democratic regime endures, the less likely is a return to authoritarian rule.7 Finally, recently democratized countries as a group display far more

political and economic volatility than their older counterparts.8 There are larger swings in economic variables such as inflation, and the chances of democratic collapse are much higher. Separating these volatile states into a unique set for analysis may reveal something useful about the par-ticular pathologies that afflict them. To this end, we drew on Polity IV democracy measures and other publicly available sources of economic, social, and political data to compile a comprehensive data set of 123 democratizations that took place between 1960 and 2004 in 88 different countries. Table 1 shows our cases by region and by decade.

59Ethan B. Kapstein and Nathan Converse

Of the 123 democratizations, 67 gave rise to democratic regimes that survived through 2004, while the remaining 56 episodes had ended in a return to authoritarianism by the end of that year. As Table 2 (on page 60 below) shows, rates of democratic reversal vary widely between re-gions. While sub-Saharan Africa has been the site of nearly twice as many democratizations as any other region, 63 percent of democratiza-tion episodes there have ended in reversal. Democracy in Latin America and Asia has also exhibited limited durability, with nearly 35 percent and 57 percent of all cases, respectively, undergoing reversal. By con-trast, more than 90 percent of Eastern Europe’s democratizations had been sustained as of 2004, which is particularly notable given the eco-nomic difficulties and dislocations which swept that area following the overthrow of communist rule. North Africa and the Middle East have seen the fewest democratization attempts, sustained or otherwise. In those cases that ended in reversal, the average length of the demo-

cratic episode was just under six years. Almost 68 percent of the unsuc-cessful democratic experiments ended during the first five years, and nearly 84 percent failed within the first ten years. Although it is impor-tant to note that we find no threshold age beyond which a democratic government is apparently safe from overthrow (Thailand’s 2006 rever-sal came after fourteen years of democracy), we focus on the first five or ten years of democracy in analyzing the factors associated with the endurance or demise of democratic regimes.Among those democracies that were reversed, several later underwent

second, third, or even fourth episodes of democratization. Although fewer than half (47 percent) of the first-time democratizations were sustained, the survival rate of second-time democratizations approaches two-thirds (63 percent). Four of the six cases of fourth-time democratization survived through the end of 2004—only Pakistan and Peru failed in their respec-tive fourth tries at democratization. (Thailand’s 2006 coup represented another such failure, albeit one not included in our data set.)

Table 1— DemocraTizaTions by region anD DecaDe (1960–2004)

1960s 1970s 1980s 1990safTer 2000

ToTal

ToTal 26 20 17 52 8 123

Latin America 6 3 11 5 1 26

Western Europe 1 3 0 0 0 4

Eastern Europe 0 0 0 19 2 21

Sub-Saharan Africa 15 6 2 19 4 46

Middle East / North Africa 0 1 1 1 0 3

Asia 4 7 3 8 1 23

Source: Polity IV, authors’ calculations


These trends are closely aligned with the improving success rate of all democratizations over time. Only 11.5 percent of the democratiza-tions that took place in the 1960s were sustained, while 30 percent of those taking place in the 1970s were sustained. The success rate reached 76.5 percent for democratizations that began in the 1980s before dipping slightly to 72.5 percent for 1990s-era democratizations. This change in success rates—mostly upward but with a small downturn more recent-ly—remains to be explained. Leading hypotheses include: 1) actions that the United States and the European Union have taken to encourage democratization, with the EU’s role in “locking in” East European de-mocracy being a case in point; 2) the role of globalization and interna-tional institutions such as the World Bank and International Monetary Fund (IMF) in promoting “good governance,” including transparency, accountability, and citizen empowerment; and 3) the relative success of many young democracies around the world in bringing both economic growth and civil liberties to their people.

The Role of Initial Conditions

Certain features of young democracies are frequently cited as pos-sible causes of variation in their economic and political performance. It would seem fruitful, then, to compare the “initial conditions” (focusing on socioeconomic as opposed to geographical factors) in democracies that were reversed with the conditions prevailing in democracies that have survived. Since an influential body of research in modern political economy (much of it theoretical) argues that initial conditions determine how countries develop both politically and economically, it is particu-larly important to see if this view is supported by the data.9 As scholars since Seymour Martin Lipset in the 1950s have recog-

nized, sustained democratizations have tended to occur in richer coun-tries, with an average per capita income in our data set of US$2,618 (in

Table 2— DemocraTizaTions by region anD ouTcome

susTaineD reverseD

ToTal 67 56

Latin America 17 9

Western Europe 3 1

Eastern Europe 19 2

Sub-Saharan Africa 17 29

Middle East / North Africa 1 2

Asia 10 13

Source: Polity IV, authors’ calculations


2006 dollars). They were almost three times wealthier than the young democracies that suffered reversal, for the latter averaged a per capita income of only about $866. This difference is of particular significance given the growing number of democratizations that have taken place in the developing world in recent years, and raises the question of how poverty and democracy interact. Does poverty make it hard for demo-cratic regimes to consolidate, as modernization theory suggests? Can democracy help to lift nations out of poverty? If poverty makes it more difficult for a democracy to consolidate, should foreign aid focus on promoting economic growth rather than, for example, providing support for the institutions of civil society? Comparing average incomes across countries is not enough, of

course, since averages can hide severe inequities of income, assets, and opportunities within a given society. Such inequities can play a big role in determining whether a democracy sinks or swims. If large segments of the populace share only a sliver of the nation’s wealth, they may view the political order—even if “democratic” in institutional form—as being unresponsive or even detrimental to their interests. As Larry Diamond has written, “Economic inclusion is closely related to political inclusion and, thus, to democratic deepening.”10 Our data show that inequality was indeed significantly higher in de-

mocracies that eventually underwent a reversal. Likewise, the poverty rate (the percentage of the population living on less than one Purchasing Power Parity-adjusted dollar per day) is on average higher in countries in which democratization was reversed than in those where it was sus-tained, with an average of around 40 percent of the population living on less than a dollar a day in the former, as opposed to just over 20 percent in the latter. Infant mortality provides another gauge of how broadly the benefits of economic growth are being shared. The average rate of infant mortality per 1,000 live births during the first five years of democracy is fully twice as high in countries where democracy was reversed as in countries where democracy has been sustained. This stark difference sug-gests that the extent to which economic development has benefited all cit-izens may be a key factor in determining how democracy fares; economic growth alone may not be enough to ensure democratic consolidation. Some noneconomic divisions in society also appear to play a role in

determining the fate of democracy. For example, ethnic fragmentation was significantly higher in those cases where democracy was reversed than where democratic governments persisted through the end of the period under study. Indeed, democratizations in countries with ethnic fragmentation greater than the world average were reversed 51 percent of the time, as compared to 38 percent of the time when ethnic fragmen-tation was below the average.11

Early indications are, therefore, that initial conditions do significant-ly affect the survival chances of democratic regimes. Low per capita


income, high levels of inequality, high rates of poverty, and higher eth-nic fragmentation all harm the prospects that democracy will endure. Yet these relationships are not deterministic. There are several countries (among them Guatemala and Mozambique) in which initial conditions were extremely unfavorable, yet where democracy had endured as of 2004, albeit not without difficulties. Moreover, most of the countries in our data set that suffered reversals in the past have subsequently re-democratized. Again, the relative success of “redemocratizers” poses a puzzle for those who advocate initial-conditions determinism.

Economic Performance and Political Institutions

More than any other single factor, the literature on the causes of democratic reversal has long emphasized that democracies are put under stress by poor economic performance, with the collapse of Weimar Ger-many during the early 1930s often cited as the paradigmatic case. Our data suggest that this view needs revising. After all, most Central and East European democracies have endured despite suffering severe eco-nomic hardships during the early 1990s. Conversely, democracy failed in Thailand, despite robust growth rates from 2000 to 2005, and it is arguably under threat or has suffered actual reversal by now in Georgia, Russia, and Venezuela, despite these countries’ recent records of strong economic growth. Overall, these examples suggest that low economic growth per se is not a clear sign that democracy is threatened, while high economic growth provides no guarantee against democratic reversal. Similarly, the extent to which economic reforms and democratic con-

solidation are compatible has been a key question for economists and political scientists studying developing countries. Some have argued that the two processes are complementary, while others have argued that “shock therapy” can threaten fragile democratic regimes. Our research indicates that democratization can facilitate economic

reform and is not threatened by it. Most young democracies have opened their economies to foreign trade, for example, without suffering a pro-tectionist backlash or political overthrow. On average, trade rises by nearly 6 percentage points (as a share of GDP) in the five years follow-ing democratization. What seems to be more important, however, is the extent to which the benefits of economic reform are widely shared, giv-ing everyone a stake in the process.In the face of worries that young democracies are threatened by both

weak growth and the politically destabilizing effects of rapid economic reform, our evidence suggests that one must look beyond economic vari-ables and consider political institutions in order to grasp what drives democratic consolidation or its opposite. The literature on democratic political institutions has most frequently compared parliamentary and presidential systems, generally finding the former to be more durable


than the latter, especially in the face of economic crises.12 Parliaments with dominant parties, it is argued, can more readily take the tough deci-sions needed to stabilize economies and thus fragile political orders as well. But does the record actually bear this out? Of the 123 democratiza-tions that we analyze, 81 initially put in place presidential systems and 27 put in place parliamentary systems.13 Of the presidential systems, nearly 36 percent ended in reversal, while just over half the parliamen-tary regimes ended in reversal (see Figure 1 above). Why have scholars (and perhaps policy makers as well) tended to

prefer parliamentary regimes? The reasons most cited include not only their abovementioned superiority in the face of crises, but also the re-putedly better ability of parliamentary regimes to guard against abuses of executive power. But our data suggest that parliaments in new de-mocracies have not done this particularly well. Presumably, the insti-tutional arrangements characteristic of parliamentarism are not always robust enough in practice to compensate for a lack of strong opposition parties, an independent judiciary, or such informal checks on power as those provided by a free press and dynamic civil society. Consequently, we turn our attention to a direct measure of con-

straints on executive power found in the Polity IV data, irrespective

figure 1—PoliTical insTiTuTions anD DemocraTic reversal

Sources: World Bank Database of Political Institutions; Przeworski et al., Democracy and Development: Political Institutions and Well-Being in the World, 1950–1990 (New York: Cambridge University Press, 2000); Polity IV, authors’ calculations.


of whether the leader is a president or a prime minister. We divide our 123 cases into two groups. The first group places a higher level of constraint on executive power, while the second provides a lower level. This institutional feature does appear to have a significant relationship with the fate of the regime, as we see in Figure 2 (above). In cases where constraints on the executive are weak, democracy is reversed just over 70 percent of the time. By contrast, when constraints on the execu-tive are strong, democracy is reversed only 40 percent of the time. We therefore stress the importance of assessing the actual balance of power in new democracies, whether the regime type is parliamentary or presi-dential.14

Consider this evidence in light of recent democratic backsliding or reversals in such countries as Bolivia, Georgia, Russia, Thailand, and Venezuela. Each country had or has a chief executive (sometimes, but not always, a president) prone to tampering with the constitu-tion in such a way as to increase executive authority, perhaps by declaring states of emergency (as in Georgia) or by seeking to revoke presidential term limits (as in Venezuela). What this means is that both domestic societies and the foreign powers that support young

figure 2—consTrainTs on execuTive Power anD DemocraTic reversal

*“Weak” constraints received a score lower than 5 on Polity IV’s scale of executive constraints.Source: Polity IV, authors’ calculations


democracies must keep a watchful eye on effective constitutional ar-rangements, and beware of efforts to increase executive authority at the expense of other branches of government.

Lessons for the International Community

In recent years, “democracy promotion” has risen high on the agenda of the international community in general and of foreign-aid donors in par-ticular. The newest U.S. foreign-aid program, the Millennium Challenge Corporation (MCC), for example, includes among its recipients only countries that “rule justly,” while the funding that the U.S. Agency for International Development gives out to finance the building of political parties, the training of legislators and judges, and the expansion of “civil society” has soared.15 Somewhat more obliquely, the World Bank and IMF have promoted “good governance” around the world, calling for greater transparency and accountability by public servants and greater empowerment of citizens.Given our findings here, it makes sense to ask what underlying theory

of democratic consolidation guides these efforts. It seems to be the notion that economic growth will help to consolidate democracy, while great-er democracy will provide the institutional underpinnings of sustained growth. In short, growth and democracy make for a virtuous circle. This leads to a “two-track” approach by aid agencies: On the one hand, they promote “Washington Consensus” policies of market-friendly economic reform; on the other, they provide “democracy-promotion” assistance (generally focusing on legislatures and civil society). If sustained economic growth ultimately depends on the quality of a

nation’s institutions, however, the industrial world’s aid programs may have the causal chain backward. Further, there seems to be little consid-eration in the policy community of whether the “type” of growth—and especially the extent to which incomes, assets, and opportunities are distributed—matters to democratic survival. The distribution of wealth and opportunities may be thought of as having the same broad goal as a society’s set of political checks and balances: In both cases, the aim is to dilute excessive concentrations of power and resources.In the same vein, it is worth cautioning against the promotion of

“neoliberal” reforms at the expense of institutional development. Rus-sia and several countries in Latin America stand as cautionary tales in this regard. Donor nations supported Argentina’s Carlos Menem and Russia’s Boris Yeltsin despite the institutional damage that each was doing to his country’s governance structures, in no small part because donors feared that the alternatives to these men would be much worse. But where will incentives for healthy institutional development come from if leaders know that international support is guaranteed no matter what domestic policies they adopt?


Those in charge of handing out foreign aid should consider the following policy recommendations regarding both economic policy and institutional design: First, democracy assistance must emphasize the crucial role of effec-

tive checks and balances—informal as well as formal—in building dura-ble democratic institutions. Informally, a free press, an educational system that is tolerant and open to diverse ideas, and a vibrant civil society (including a strong private economy) can all assist the build-ing of a democratic culture. Indeed, these informal institutions may encourage the rise of independent judiciaries and cen-tral banks, among other bodies that pro-vide formal checks on power and prevent abuses of office. Second, foreign donors must confront

problems of income and asset distribu-tion in recipient nations. There is increas-

ing evidence from around the world that globalization and technological change, for example, are leading to higher levels of income inequality. As noted above, higher levels of inequality may imperil young demo-cratic regimes. Thus a major challenge of policy reform is to ensure that growing numbers of citizens have access to education and training pro-grams. Moreover, in certain countries ethnicity may play a role in access to education and good jobs. The bottom line is that growth alone will not necessarily promote the life chances of all the individuals in a given society, and those who are left by the wayside may lose confidence in democracy. If democracy offers any particular economic benefits, these should be measured in terms of the opportunities made available rather than the average growth rate alone.Third, the international community must support young democra-

cies not just via aid, but also by persuading them to open their borders to trade, to participate in exchange programs of various kinds (educa-tional and cultural, for instance), and to join international organizations that can help to “lock in” the political and economic reform process. In this respect, the protectionist barriers that advanced industrial countries throw up against agricultural products from the developing world are particularly counterproductive, for they deny small farmers opportuni-ties for income growth. Again, if donors wish to nurture the world’s young democracies, this must be done through a battery of policies whose overriding purpose is to distribute political and economic power while providing better life chances for all.Because most young democracies fail during their first five years, as

leaders and institutions struggle to achieve credibility and legitimacy in

The bottom line is that growth alone will not necessarily promote the life chances of all the individuals in a given society, and those who are left by the wayside may lose confidence in democracy.


the face of monumental challenges, these years are the crucial period during which targeted foreign-assistance strategies must be maintained. These strategies must be aimed at spreading political and economic power more widely and at augmenting the opportunities for betterment available to the voting public, particularly those who are least advan-taged. In the absence of such policies, short-run economic growth alone is unlikely to save a young democracy from reversal.

NOTES

The authors wish to thank the Center for Global Development for housing the research project upon which this essay is based.

1. Our definition of democracy is based on the Polity IV data set, which is avail-able at www.systematicpeace.org/polity/polity4.htm. Briefly, Polity IV assigns countries scores ranging from -10 to +10 based upon their electoral systems, methods of executive recruitment, and constraints on the executive branch. For a complete discussion of our methodology and data set, see Ethan B. Kapstein and Nathan Converse, The Fate of Young Democracies (New York: Cambridge University Press, 2008). We consider a 6-point in-crease in the Polity score to constitute a case of democratization and a 6-point fall to constitute a reversal. Thus, the term “democratizers” rather than “democracies” might be a more precise description of the countries in our data set. This methodology identified 123 democratizations, with several countries undergoing multiple democratizations in the 45-year period of our study. For example, both Thailand and Pakistan went from authoritarian to democratic rule on four separate occasions between 1960 and 2004.

2. The data set may be found at www.ethankapstein.com. For the regression analyses, see www.journalofdemocracy.org/articles/gratis/KapsteinGraphics-19-4.pdf.

3. Stephan Haggard and Robert Kaufman, The Political Economy of Democratic Tran-sitions (Princeton: Princeton University Press, 1995); Milan Svolik, “Authoritarian Rever-sals and Democratic Consolidation,” unpublished working paper, University of Illinois, 2007.

4. For a similar line of analysis, see Larry Diamond, “The Democratic Rollback: The Resurgence of the Predatory State,” Foreign Affairs 87 (March–April 2008): 36–48.

5. Adam Przeworski and his coauthors were unable to include post-Soviet democra-cies in their well-known data set, which covered cases only through 1990. See Przeworski et al., Democracy and Development: Political Institutions and Well-Being in the World, 1950–1990 (New York: Cambridge University Press, 2000).

6. Samuel P. Huntington, The Third Wave: Democratization in the Late Twentieth Century (Norman: University of Oklahoma Press, 1991), 258; Philip Keefer, “Democra-tization and Clientelism: Why Are Young Democracies Badly Governed?” World Bank Policy Research Working Paper No. 3594 (2005).

7. John Gerring et al., “Democracy and Economic Growth: An Historical Perspective,” World Politics 57 (April 2005): 323–64; Torsten Persson and Guido Tabellini, “Demo-cratic Capital: The Nexus of Political and Economic Change,” NBER Working Paper No. 12175 (2006).

8. Adi Brender and Allan Drazen, for example, find that the economic swings associ-ated with the political budget cycle are found only in young democracies. See Brender and Drazen, “Political Budget Cycles in New versus Established Economies,” NBER Working Paper No. 10539 (2004).


9. Stanley Engerman and Kenneth Sokoloff, “Factor Endowments, Inequality, and Paths of Development Among New World Economies,” NBER Working Paper W9259 (2002); Daron Acemoglu and James Robinson, Economic Origins of Democracy and Dic-tatorship (New York: Cambridge University Press, 2006).

10. Larry Diamond, Developing Democracy: Toward Consolidation (Baltimore: Johns Hopkins University Press, 1999), 85.

11. This difference in reversal rates is statistically significant at the 10 percent level, with a p-value of 0.073. Studies of ethnic conflict have found evidence that, as fraction-alization reaches very high levels, the likelihood of violent conflict falls. See for example James Fearon and David Laitin, “Ethnicity, Insurgency, and Civil War,” American Politi-cal Science Review 97 (February 2003): 75–90. In contrast, our data suggest that the risk of democratic breakdown continues to rise even as ethnic fragmentation reaches very high levels.

12. A useful review of the arguments is found in Ko Maeda and Misa Nishikawa, “Duration of Party Control in Parliamentary and Presidential Governments: A Study of 65 Democracies, 1950 to 1998,” Comparative Political Studies 39 (April 2006): 352–74. On regimes’ ability to endure crises, see Michael Bernhard, Christopher Reenock, and Timothy Nordstrom, “Economic Performance, Institutional Intermediation, and Demo-cratic Survival,” Journal of Politics 63 (August 2001): 775–803.

13. No data regarding the remaining fifteen cases were available. Democratic regimes were classified as either presidential or parliamentary based on data from Przeworski et al., Democracy and Development, and from the World Bank Database of Political Institu-tions (DPI). As the Przeworski data end in 1990, democratizations in later years, including all postcommunist cases, were categorized according to the DPI.

14. Research by Steven Fish and colleagues, using detailed assessments of legislative power, also reaches this conclusion. M. Steven Fish, “Stronger Legislatures, Stronger De-mocracies,” Journal of Democracy 17 (January 2006): 5–20.

15. Mitchell A. Seligson et al., “Trends in Democracy Assistance: What has the United States Been Doing?” Journal of Democracy 19 (April 2008): 150–59.

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