Economic and Social Factors Driving the Third Wave of Democratization

Abstract

We identify permanent democratic transitions during the Third Wave of Democratization and the nineties, when many former socialist countries moved towards representative rule. Using political freedom indicators, electoral archives, and historical resources in 174 countries in the period 1960-2005, we identify 63 democratic transitions, 3 reverse transitions from relatively stable democracy to autocracy and 6 episodes of small improvements in representative institutions. We also classify non-reforming countries to stable autocracies and always democratic. We then use the dataset to test theories on the prerequisites for democracy in these countries that enter the Third Wave as non-democracies. Examining initially autocratic countries enables us to address issues of sample selection (in the beginning of the sample most developed countries were already democratic) and reverse causality (democracy can be both a cause and a consequence of wealth, for example). Our estimates reveal that democratization is more likely to emerge in affluent and especially educated societies. Economic development and education are also key factors determining the intensity of democratic reforms and how quickly democratic transitions will occur. These results appear robust to controls like the social environment (religion and fractionalization), natural resources, trade openness and proxies of early institutions.