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Demagogues and the Fragility of Democracy

Author

Listed:
  • Bernhardt, Dan

    (University of Illinois and University of Warwick)

  • Krasa, Stefan

    (University of Illinois)

  • Mehdi Shadmehr

    (University of North Carolina at Chapel Hill)

Abstract

We investigate the susceptibility of Democracy to demagogues, studying tensions between representatives who guard voters’ long-run interests and demagogues who cater to voters’ short-run desires. Parties propose consumption and investment. Voters base choices on current-period consumption and valence shocks. Younger/poorer economies and economically-disadvantaged voters are attracted to the demagogue’s dis-investment policies, forcing far-sighted representatives to mimic them. This electoral competition can destroy democracy: if capital falls below a critical level, a death spiral ensues with capital stocks falling thereafter. We identify when economic development mitigates this risk and characterize how the death-spiral risk declines as capital grows large.

Suggested Citation

  • Bernhardt, Dan & Krasa, Stefan & Mehdi Shadmehr, 2021. "Demagogues and the Fragility of Democracy," QAPEC Discussion Papers 05, Quantitative and Analytical Political Economy Research Centre.
    • Handle: RePEc:wrk:wqapec:05
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    References listed on IDEAS

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