IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/34198.html
   My bibliography  Save this paper

Malfunctioning Democracies: Understanding Accountability Failures in Developing Countries

Author

Listed:
  • Claudio Ferraz
  • Frederico Finan

Abstract

This chapter examines why democracies in the developing world frequently underperform in providing effective governance. We argue that these shortcomings stem from weaknesses in accountability mechanisms, which leave governments vulnerable to corruption, clientelism, and elite capture. Our framework distinguishes three accountability channels: vertical (citizens’ control over politicians), horizontal (checks and balances across state institutions), and diagonal (oversight by media and civil society). We synthesize the recent theoretical and empirical literature to assess how each channel operates, the conditions under which it succeeds, and why it often fails. A central finding is that accountability institutions rarely fail on their own; instead, they are actively undermined by political actors seeking to preserve rents and entrench power. This dynamic weakens electoral competition, erodes judicial independence, and curtails media freedom, producing a mutually reinforcing cycle of weak accountability. Additionally, we argue that sustainable reforms cannot be achieved by strengthening any single channel in isolation. Since vertical, horizontal, and diagonal accountability are interdependent, effective reform requires bolstering all three simultaneously. We conclude by discussing the implications of this perspective for future research, including the role of new technologies, political polarization, and candidate selection in reshaping accountability in developing democracies.

Suggested Citation

  • Claudio Ferraz & Frederico Finan, 2025. "Malfunctioning Democracies: Understanding Accountability Failures in Developing Countries," NBER Working Papers 34198, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:34198
    Note: DEV PE POL
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w34198.pdf
    Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P50 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:34198. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.