The Political Economy of Liberal Democracy

Abstract

This paper develops a taxonomy of political regimes that distinguishes between three sets of rights—property rights, political rights and civil rights. The truly distinctive nature of liberal democracy is the protection of civil rights (equal treatment by the state for all groups) in addition to the other two. The paper shows how democratic transitions that are the product of a settlement between the elite (who care mostly about property rights) and the majority (who care about political rights), generically fail to produce liberal democracy. Instead, the emergence of liberal democracy requires low levels of inequality and weak identity cleavages.

The rise and fall of Argentina

“…In 1912, the Sáenz Peña Law was passed, introducing the secret ballot and de jure outlawing fraudulent electoral practices (Engerman and Sokoloff 2005). Even though electoral democracy tends to foster political accountability and the rule of law (Knack and Keefer 1995;Weingast 1997;Barro 1999;Maravall and Przeworski 2003;North et al 2009), it may also encourage the redistribution and erosion of property rights, especially if it is introduced in the context of poverty, low education levels, and near absence of a middle class (Lipset 1959;Acemoglu et al 2005;Evans and Rose 2007;Glaeser et al 2007;Mukand and Rodrik 2015;Maseland and Spruk 2017). The Sáenz Peña Law of 1912 was clearly a manifestation of greater political freedom at the expense of economic freedom (Friedman 1962;Kenn Farr et al 1998;Gwartney et al 1999;Goel and Nelson 2005).…”

The Liberal Peace: Challenges to Development, Democracy, and Soft Power

“…The majority can always tyrannize the minority in purely elective democracies. Mukand and Rodrik (2017) analyse a model in which society is fragmented along three lines: first there is a small elite who are characterised by their wealth, then a majority group that is poorer, and finally a minority who are differentiable from the majority by their different ethnicity. The minority could be immigrants.…”

Empowerment Rights and Happiness Gap in Post-socialist Countries

“…Furthermore, empowerment rights (in particular, freedom of religion, freedom of speech and freedom of assembly and association) assure equality before the law and prohibit government to discriminate against specific individuals or groups (Mukand, Rodrik, 2015). They mainly benefit those, who are not privileged in the society, that is, ethnic, geographic, religious or ideological minorities (Mukand, Rodrik, 2015). Although not only well-being of minorities may be positively affected by secure empowerment rights.…”