Working Paper: NBER ID: w31723
Authors: Assaf Razin; Efraim Sadka
Abstract: Regime changes toward autocracy typically reshape the judicial framework, effectively eroding the separation of powers and leading the nation toward an autocratic path. Recent instances of regime shift in Hungary, Poland, and Turkey offer templates of democratic erosion through manipulation and “democratic” means. Israel is in now amid a conflicting judicial overhaul. Whereas the manifestations of these patterns differ based on the distinct political, social, and historical contexts of each country, they invariably erode the Rule of Law and the democratic institutions. Their ideological stance sharply contrasts with the democratic norms upheld by major Western nations: the separation of powers, judicial autonomy, and the intricate web of political, civic, and social organizations cultivated since the Enlightenment. These century-old trends have been instrumental in fostering unprecedented prosperity. This paper overviews the economic consequences of regime changes from liberal democracy towards autocracy.
Keywords: Regime Change; Judicial Independence; Economic Growth; Democracy; Autocracy
JEL Codes: F0; P1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| regime changes toward autocracy (P26) | erosion of judicial frameworks (K40) |
| erosion of judicial frameworks (K40) | economic performance (P17) |
| regime changes toward autocracy (P26) | economic growth (O49) |
| judicial independence (K40) | economic growth (O49) |
| regime changes from liberal democracy to autocracy (P26) | deterioration of judicial system (K40) |
| deterioration of judicial system (K40) | economic growth (O49) |
| autocratic shifts (D70) | extractive institutions (O17) |
| extractive institutions (O17) | stifling innovation and economic growth (O39) |
| judicial overhaul in Israel (K41) | capital flight (F21) |
| judicial overhaul in Israel (K41) | currency depreciation (F31) |
| judicial overhaul in Israel (K41) | inflationary pressures (E31) |
| regime changes (P39) | economic performance (P17) |