5th Lecture, STV4346B: “Modernization theory”

Carl Henrik Knutsen, Department of Political Science, UiO24/11-2008

The issues Does economic development lead to an

increased probability of democratization? Does economic development lead to a

reduced probability of democratic breakdown? Theoretical arguments: A quest for linkages

and mechanisms Empirical analysis: Why is there a correlation

between democratic regime and level of economic development? Methodological issues, measurement issues,

sample issues…

Correlation coefficient between (-)FHI and GDP per capita (PPP) 1975-2005.

Democracy: Conceptual and measurement issues Conceptual definitions of democracy:

Institutionally based, minimalist (Schumpeter, Przeworski Focus on elections, alternation of government on the

basis of (free and fair) elections Institutionally based, expanded (f.ex. Dahl)

“Electoral fallacy”, and the need to include other institutional arrangements in the definition. Checklists. Expanded political rights. Sometimes inclusion of civil liberties (freedom of speech, association)

Substantial (f.ex. Beetham) Popular control over politics and political equality as

core of democracy. Institutions are not democratic per se, but only if they contribute to realize the above concepts. The functioning of institutions as well as their existence

Some measuresTime period

Grading Construction

Institutions other than elections?

Includes civil liberties?

Includes how institutions function?

ACLP 1945-2002

Dichotomous Necessary conditions

No No No

Polity 1820-2004

Continuous Additive index

Yes No No

FHI 1973- Continuous Additive index

Yes Yes Yes

Effective democracy index

1996-(depends)

Continuous Multiplicative index

Yes Yes Yes (very large weight)

Modernization theory Modernization theory, broad interpretation: Nexus

of particular values, economic structures, social structures and political structures that go together. High level of income, urbanization, education, social

differentiation, individualism and liberal values, democracy..

Teleological (?): from traditional to modern society. Universalism.

Narrower modernization theory: Economic development through a set of different

intermediate factors will increase the probability of democratization (and stabilization of democracy)

“the more well-to-do a nation, the larger the chances that it will sustain democracy” (Lipset, 1959)

Lipset’s study (1959) Focus on European and Latin American countries Democracies and the development nexus..

a) Democracies are wealthier b) Democracies are more industrialized c) Democracies have more educated citizens d) Democracies are more urbanized

Lipset: extremism and political polarization as factors that work against democracy the role of education for mitigating extremism the role of industrialization and urbanization in opening up for

different influences and increasing tolerance and broadmindedness

modern society and cross-cutting cleavages The role of economic inequality and poverty for social conflict

and reciprocal antagonism working class and upper class The crucial role of the middle class in a modern society a

moderating influence that works in favor of democracy

Lipset cont’d Economic development broadly defined that

works in favor of democratic government, But one interpretation:

IncomeXDemocracy Where x can be (overlapping categories)

Class structure Education Norms, values and attitudes Urbanization Industrialization Legitimacy of democratic regime Cleavage structure in society

Criticisms of Lipset Barrington Moore and different paths to

modernity. The role of social structure/composition of important social classes, and how they combine to yield different “modern” regimes (democratic, fascist, communist)

Guillermo O’Donnell and bureaucratic authoritarianism in more industrialized and richer Latin American countries. The middle class’ fear of the industrial workers’ power, and the call for a strong man. Lipset turned upside down?

Huber, Rueschemeyer, Stephens: The working class rather than the middle class as an agent of democracy

Welzel et al: the basic story

The “missing link” A focus on the development of specific values as the

effect of socioeconomic development and the subsequent cause of democracy as a political regime

Socioeconomic development broadly defined (includes health, education, social complexity as well as income)

Culture and values as endogenous. Poor societies and hierarchical, traditional, conformist,

authority-oriented, “survival” values Rich societies with emancipative, freedom-oriented,

liberal, individualistic, post-materialist values Builds theoretically on literature from sociology and

psychology, among others Maslow’s hierarchy of need satisfaction (combined with the assumption of value-formation and freezing in formative age: early 20s)

Empirical data: World Values Survey (surveys of individuals in many different countries)

Emancipative values and democracy The masses’ values and the demand for democracy The elites’ values and the supply of democracy Emancipative values are better aligned with

democracy than dictatorship as a form of government.

Argues that the correlation between emancipative values and democracy does largely stem from values causing democracy than other way around (democratic learning of tolerance, trust, authority

skepticism etc) Income and education is positively correlated with

emancipative values within nations, but largest part of variation is cross-national: Diffusion effects within societies..

Empirical results Find strong evidence in favor of the hypotheses

A) Socioeconomic development Emancipative values B) Emancipative values Democracy

What about countries with formal democratic institutions in place? Increases in emancipative values increases the

effectiveness of democratic rights. (Eff.dem= FHI*CPI) Reduces corruption (increase in elite integrity) democracy works better.

Charges of Western ethnocentrism in theory? The links are in place in all regions of the world, and the effects do not disappear when controlling for region and religion (Exit Huntington and his theory of civilizations and cultural predispositions towards democracy).

Results, controlling for diffusion effects

Some methodological problems and more literature The effective democracy measure The direction of causality For those interested: Read the 2006 book by

Inglehart and Welzel. A very thorough and interesting investigation of this topic. Several additional articles exist as well.

The democratization vs democratic stability debate in World Politics: Przeworski & Limongi (P&L) vs Boix & Stokes (B&S) Okay, so there is a correlation between

democracy and level of income. But why? 1) Probability of democratization increases in

GDP? 2) Probability of democratic breakdown decreases

in GDP? 3) Democracies have higher growth rates..

P&L: Because of 2) B&S: Because of 1) and 2) My suggestion: Because of 1), 2) and 3)

P&L (1997) The endogenous and exogenous explanation,

both put forth by Lipset. Which of these are supported by the data?

Estimates probability or regime transitions. Time-series structure in data. Dichotomous measure of democracy. Breakdown dictatorship == democratization.

Endogenous explanation A story often told about countries, quoted from

P&L: “they develop, social structure becomes complex,

labor processes begin to require the active cooperation of employees, and new groups emerge and organize. As a result, the system can no longer be effectively run by command: the society is too complex, technological change endows the direct producers with some autonomy and private information, civil society emerges, and dictatorial forms of control lose their effectiveness. Various groups, whether the bourgeoisie, workers, or just the amorphous "civil society," rise against the dictatorial regime, and it falls.”

Another story that might explain the correlation we observe.. Democracies and dictatorships emerge for

various reasons (exogenous shocks, war, occupation, other crises..), but democracies die at a much lower rate when income levels are high.. High income stabilizes democracy, but not

dictatorship to the same degree. It is the stability of democracies at high income

levels rather than their emergence that explain the correlation: the relevance of the exogenous explanation, rather than the endogenous of “modernization”.

Investigate hypotheses empirically by calculating transition probabilities, using probit function

Some empirical observations (1950-90), global sample. Income and democratization

<1000$: dictatorships survive or succeed one another 1000<x<6000: dictatorships become less stable as income

increases >6000: dictatorships become more stable Non-linear relationship between development and

democratization Income and democratic stability

32 countries, total of 736 democratic country-years, with income above 6055$, and not one collapse!

But democracies collapse in poor countries O’Donnell was wrong: Democracies not more likely to

collapse when they industrialize. Argentina is an outlier! (case-selection issues)

Theoretical story: Gains from fighting to overthrow democracy is lower in rich countries (decreasing marginal utility of income and higher cost of destroying large capital stock when fighting Lower value of becoming dictator in rich country)

How does survival probability respond to economic crisis (negative growth rate) Lipset was wrong at least on one point: rapid growth not

destabilizing for democracies But in times of crises, democracies die at a high rate

Exp life when positive growth: 64 years Exp life when negative growth: 19 years

But, crisis is only destabilizing for relatively poor democracies

A different issue: Huntington’s second reverse wave is just a function of new countries emerging into the international system, and not because of a global recession in democracy..

Another specification: Differentiating between old and new countries: The modernization story might fit better for “old” countries, but does not fit at all for “new” countries: Development does not increase probability of democratization in ex-colonies..

Summing up the exogenous theory of regime change (pasted from B&S)

Boix&Stokes (2003): The response A challenge to P&L’s refutation of “endogenous”

explanation on both theoretical and empirical grounds

Przeworski et al (2000) themselves find a small but significant effect from income on democratization when using pooled data..(not broken down in income intervals)

B&S bring up P&L’s intuitive story of democratic stability and income, and formalize it,

But B&S claims that the same logic supports the argument that democratization will be more likely in rich countries: Stronger (economic) incentives for elites to give up power without fight in rich countries (more on such games in the next lecture, but you can take

a quick look at the games if you like..) A small digression: Other motives than income might also

be worth using for modeling purposes in such games

A Game of Regime Choice (Status Quo Democracy)

Game of Regime Choice (Status Quo Dictratorship)

3 robustness problems in P&L 1) Dwindling numbers

Very few dictatorships left at high income intervals single events can have large effects on probabilities

Moreover, what if the most resilient dictatorships survive and continue to develop after a certain threshold (regime-specific factors)selection bias! Looks as if dictatorships do not fall after 6000$, but this is only because there are only a certain type of dictatorships left at this stage

2)Sample selection Extends sample: >6500 country-years (1850-1990) The endogenous theory fares much better, and the exogenous

worse, in the period from 1850-1945 Diminishing marginal effect of income on democratization, but

positive 3)Omitted variable bias

International political factors (Soviet dominance) and factor endowments (immobile capital, oil wealth..more on this next lecture)

When take out Soviet dominated countries and oil-countries, the effect of income on democratization is stronger

Simulated prob. of regime transitions by income

Back to intermediate variables: Income per se? No! Other factors that accompany income that

produce increased probability of democratization Empirically: The coefficient of income decreases

when controlling for “intermediate” variables Inequality, industrialization (and social

differentiation) , education. Boix and Stokes claim that reduced inequality is particularly important (agricultural inequality, farm ownership as proxy).

Some problems: Income level, income inequality and their relationship:

The Kuznets curve: Inverse u-shape, with higher inequality for countries at medium level of development..

Is reduced inequality an effect rather than a cause of democracy?

Hadenius and Teorell (2005) article, not on the reading list (worth reading for the interested!)

Investigates the results from both Welzel et al and Przeworski and Limongi, and find their results to be driven by choice of democracy indicator Effective democracy measure yields too strong

results for Welzel et al.’s claims (Uses FHI to test) When switching from dichotomous to graded

democracy measure (FHI) effect from income on the probability of democratization.

But later replies..ongoing debates..