Columbia International Affairs Online: Working Papers

CIAO DATE: 09/2008

Drugs, Civil War, and the Conditional Impact of the Economy on Democracy

Angel Alvarez, Michael Coppedge, Lucas González

October 2007

The Helen Kellogg Institute for International Studies

Theorizing about the influence of modernization on democracy is once again in vogue. Nevertheless, this theme faces an important obstacle: the leverage of modernization hypotheses is generally modest. Key modernization variables, especially per capita GDP, almost always explain part of the variance in democracy, but rarely more than half. Also, as one can see in certain Latin American cases, economic growth sometimes has a negative impact on democracy. This paper argues that the impact of economic growth varies from country to country for systematic, not random, reasons. Using Hierarchical Linear Modeling (HLM) in a cross-regional sample of 108 countries from 1978 to 1999, the paper shows that it is crucial to distinguish between the shortterm effect of per capita GDP growth within each country and the cross-national effect of long-term growth. A distinct causal mechanism is at work at each level of analysis. More precisely, the paper identifies four factors that condition the impact of economic growth on democracy: the existing political regime, the democratic experience of each country, the frequency of civil war, and the importance of drug trafficking in the domestic economy. Although other factors probably also condition the effect of the economy on democracy and democratization, the model used in this paper explains 82 percent of the variance in the sample, which is substantially greater than what is typically found in other studies of democratization. Consequently, this paper shows that it is necessary to continue to refine hypotheses about the conditional effect of the economy in order to improve conventional explanations of variation in levels of democracy, whether within one country or in comparative perspective.