Poverty, Inequality, and Democracy: Why Democracies Fail

Based on a new data set of democratizations occurring between 1960 and 2004, this paper explores the reasons for reversals in young democracies. Adverse initial conditions including poverty, inequality, and ethnic fragmentation are associated with the failure of democracy, but the relationship is not deterministic. Likewise, numerous young democracies have survived in spite of disastrous economic performance. Political institutions play a key role in preventing a return to authoritarianism, but the effectiveness of constraints on executive power appears more important than whether the regime is parliamentary or presidential in structure. These findings suggest a need for greater coordination between democracy promotion assistance and aid intended to foster economic development.