The Political Economy of Liberal Democracy

Working Paper: CEPR ID: DP10808

Authors: Sharun Mukand; Dani Rodrik

Abstract: We distinguish between three sets of rights ? property rights, political rights, and civil rights ? and provide a taxonomy of political regimes. The distinctive nature of liberal democracy is that it protects civil rights (equality before the law for minorities) in addition to the other two. Democratic transitions are typically the product of a settlement between the elite (who care mostly about property rights) and the majority (who care mostly about political rights). Such settlements rarely produce liberal democracy, as the minority has neither the resources nor the numbers to make a contribution at the bargaining table. We develop a formal model to sharpen the contrast between electoral and liberal democracies and highlight circumstances under which liberal democracy can emerge. We discuss informally the difference between social mobilizations sparked by industrialization and decolonization. Since the latter revolve around identity cleavages rather than class cleavages, they are less conducive to liberal politics.

Keywords: democratic transitions; liberal democracy

JEL Codes: P48


Causal Claims Network Graph

Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.


Causal Claims

CauseEffect
structure of political regimes (P16)protection of civil rights (K16)
majority's interests (D72)exclusion of minority rights (J15)
political settlement (D74)electoral democracy (K16)
majority's ability to enjoy public goods (H40)protection of minority rights (J15)
elite's identity alignment with minority (J15)favor civil rights (K38)
identity cleavages (F55)support for civil rights (K16)
cost of civil rights provision (K38)emergence of liberal democracy (P16)
homogeneous societies (P13)emergence of liberal democracy (P16)
electoral democracy (K16)liberal democracy (P16)

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