Self-Enforcing+Democracy

Adam Przeworski, “Self-Enforcing Democracy,” in Barry R. Weingast and Donald A. Wittman, eds., //Oxford Handbook of Political Economy// (Oxford UP, 2006), chap. 17, pp. 312-28. Caroline Chumo for SIS 700 October 18 **Purpose**: Under what conditions does a democratic system last? **Thesis:** 19th century views that democracy will lead to conflict over property/capital hold true today; “democracy survives in countries with high per capita incomes” (313). **Conclusion:** “When a country is sufficiently wealthy, the potential increase in income that would result from establishing a dictatorship is not worth the sacrifice of freedom” (317). Democracy cannot survive in poor, unequal countries. **Type of study/argument:** Theory building based on empirical data **School of thought:** Rational choice theory 1. His assumptions about democracy are: a. Enduring democracy is a self-enforcing, equilibrium between forces that can overthrow it. b. “Interests or values of the parties are in conflict” (312), or else benevolent dictatorship. c. Elections determine rule. Being a winner or loser determines behavior that results in democratic equilibria. d. “Democracies function under a system of rules.” rules enforce equilibria-reaching behavior. **e.** **“Governments are moderate not because they are constrained by exogenous, constitutional, rules but because they must anticipate sanctions were their actions more extreme” (313).** 2. Przeworski takes 19th century views about democracy when it was new and applies them to today. a. People thought that democracy would threaten property ownership and the poor would take from the rich (e.g. Madison, Mackintosh, Macaulay, and Marx); they assumed: **universal suffrage + capitalism = instability.** b. For theoretical leverage, P. introduces the median voter model that uses rational choice theory to determine the size of government. In sum, **for democracies in which the majority is poorer, income tax redistribution results in a higher general standard of living because complying with tax law is in the best interests of the median earner.** In detail: i. Given unequal income distributions (majority poor) ii. Given that individuals vote on the income tax rate iii. Then “once the tax rate is decided, individuals maximize utility by deciding in a decentralized way how much of their [income] to supply” (314) iv. AND preferences to comply with tax law follow the voter with the median income, and thus median preference v. AND tax revenue can be distributed equally OR spent on public goods vi. AND when the income distribution is right-skewed, majority rule equilibrium means that incomes after re-distribution are much more equal vii. AND the result is more overall social and economic equality. c. Despite evidence that democracy means increased social and economic equality (19th century elites read: instability) is true for many cases (e.g. Chile and Czechoslovakia) democracies endure, much longer than people expected in the mid 1800s. WHY? d. Further evidence for the research question: i. “The probability that democracy survives rises steeply in per capita income” (314). ii. In a regression several independent variables commonly used as indicators of democracy, P found that income was the strongest determinant. By how much? 3. Przeworski proposes his own two-part model of democracy to explain why democracies endure when income is higher. a. Assumptions: i. Income distribution is unequal. ii. “decisions to save are endogenous, which means they depend on future redistributions” (316) iii. Redistribution is decided at elections. iv. There are two parties, one representing the rich, one representing the poor. v. The parties propose redistribution ideas, based on the median preference. vi. After election each party decides whether to abide by the vote. vii. The success of a coup is exogenous; it depends on a party’s relative military force. viii. After a successful coup, the dictatorship determines income distribution freely 1. Rich party: no redistribution 2. Poor party: total redistribution ix. Both parties accept the election (democratic equilibrium) only if both parties would expect the same redistribution results from their own dictatorship. x. “The utility function is concave in income, which means that marginal increases of income matter less when income is high” (316). i.e. the richer the country is, the less the median preference matters and countries will remain/become democratic. xi. “The cost of dictatorship is the loss of freedom” (316). Dictatorship is bad independent of income. b. Implications: these are P’s models i. “Since the marginal utility of income declines in income, while the dislike of dictatorship (or the value of democracy) is independent of income (constant), at a sufficiently high income the additional gain that would accrue from being able to dictate redistribution becomes too small to overcome the loss of freedom.” (graph 17.2 but the axis are not labled!) ii. At a certain income level, democracy is more valuable for all than dictatorship (graph 17.3 but the axis are not labled!) **iii.** **“When a country is sufficiently wealthy, the potential increase in income that would result from establishing a dictatorship is not worth the sacrifice of freedom” (317).** **iv.** **If income is equal, but low, and military force is weak, democracy will also survive.** 4. P’s interpretations of his model for different applications a. On economic crises: slower growth rates only matter to democracy if they drop below the income threshold under which dictatorship is more acceptable than democracy. b. On redistribution: countries have threshold of acceptable redistribution that is narrower for poor countries and wider for rich countries. Below this threshold democracy fails. c. On redistribution and varying levels of income: d. On chances for reelection: Election losers in poor countries don’t trust the chance for future elections. In richer, “bourgeoisified,” countries, it is not worth it for losers to revolt. Hence it is very important for poor countries to choice their electoral institutions wisely, so they don’t end up in dictatorship. e. On constitutions: “Constitutions are neither sufficient nor necessary for democracy to survive” (320). Constitutions are not guaranteed to be followed. Country wealth is more important than rules. Constitutions are just one possible equilibrium that is written down. 5. Open issues: a. Democracies are more stable in countries where there is a majority ethnic group. b. To say that cultures of democracy sustain democracy is fine, but democracy is still inherently a calculation.
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