Electoral Economics in New Democracies: Affecting Attitudes about Democracy

Recent research finds that political budget cycles are predominantly a phenomenon of new democracies, but also indicates that even in these countries higher deficits in election years do not help incumbents to get reelected. We suggest that the higher election year deficits in recently democraticized countries may reflect the response of democratic leaders to the public’s uncertainty about the value of democracy, as indicated by our findings from the World Values Survey. We present a model in which voters form beliefs about the efficacy of democracy on the basis of economic outcomes. To force a reversion to a non-democratic regime, anti-democratic elites must gain sufficient support from the citizenry. This leads government to increase expenditures and deficits before elections —when new democracies are particularly fragile - in the attempt to convince voters that “democracy works”, with these expenditures going primarily to citizens rather than elites. Data on the composition of election year expenditure increases in new democracies are broadly consistent with the suggested pattern. The focus on citizens rather than elites, and the implications of the necessity of “buying off” citizens rather than elites to prevent a successful coup or similar measure contrasts with some of the recent literature on democratic consolidation.