Why is Economic Policy Different in New Democracies? Affecting Attitudes About Democracy / Adi Brender, Allan Drazen.

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Brender, Adi

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w13457.Publication details: Cambridge, Mass. National Bureau of Economic Research 2007.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: When democracy is new, it is often fragile and not fully consolidated. We investigate how the danger of a collapse of democracy may affect fiscal policy in new democracies in comparison to countries where democracy is older and often more established. We argue that the attitude of the citizenry towards democracy is important in preventing democratic collapse, and expenditures may therefore be used to convince them that "democracy works". We present a model focusing on the inference problem that citizens solve in forming their beliefs about the efficacy of democracy. Our approach differs from much of the literature that concentrates on policy directed towards anti-democratic elites, but our model can encompass that view and allows comparison of different apporoaches. We argue that the implications of the model are broadly consistent with the empirical patterns generally observed, including the existence of political budget cycles in new democracies not observed in established democracies.

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Previous	nber w13454 Public Policies against Global Warming /	nber w13455 Prices and Market Shares in a Menu Cost Model /	nber w13456 Measuring the Compactness of Political Districting Plans /	nber w13457 Why is Economic Policy Different in New Democracies? Affecting Attitudes About Democracy /	nber w13458 Is the "Surge" Working? Some New Facts /	nber w13459 How Does the Government (Want to) Fund Science? Politics, Lobbying and Academic Earmarks /	nber w1346 What Promises Are Worth: The Impact of Affirmative Action Goals /	Next

October 2007.

When democracy is new, it is often fragile and not fully consolidated. We investigate how the danger of a collapse of democracy may affect fiscal policy in new democracies in comparison to countries where democracy is older and often more established. We argue that the attitude of the citizenry towards democracy is important in preventing democratic collapse, and expenditures may therefore be used to convince them that "democracy works". We present a model focusing on the inference problem that citizens solve in forming their beliefs about the efficacy of democracy. Our approach differs from much of the literature that concentrates on policy directed towards anti-democratic elites, but our model can encompass that view and allows comparison of different apporoaches. We argue that the implications of the model are broadly consistent with the empirical patterns generally observed, including the existence of political budget cycles in new democracies not observed in established democracies.