Contingent Democratization: When Do Economic Crises Matter?

This article argues that the effect of economic crises on democratic transition is contingent on economic structure. Specifically, a high level of state engagement in the economy makes social forces dependent on the ruling elites for patrimonial interests and, therefore, the authoritarian regime liable for economic failure. Moreover, when authoritarian elites own a high share of economic assets, this aggravates the economic loss of both the business class and the masses when economic crises occur, which in turn makes defection of the business class, the revolt of the masses and the alliance of the two social classes more likely. Cross-national analyses show that economic crises trigger democratic transition only when state engagement in the economy is above a certain level.