Who Traded Away Democracy? Business-Backed Legislators during the Democratic Backsliding in Japan 1936-1942

This study examines how economic elites respond to democratic backsliding, focusing on Japan from 1936 to 1942. Using an original dataset of Diet membersʼbiographies and board memberships, it analyzes the Imperial Japanese Armyʼs consolidation of power and shifts in parliamentary voting patterns and affiliations during critical legislative sessions. Employing difference-indifferences and event-study designs, the research evaluates the effects of two key shocks: economic sanctions and wartime procurement. Legislators tied to sanction-hit sectors, such as textiles and petrochemicals̶the weakest performers in the stock market̶shifted toward anti-democratic positions, while those from procurement-dependent sectors, like automobiles, maintained stable stances. Case studies further illustrate how economic vulnerability drove authoritarian realignment, challenging the notion that sanctions uniformly pressure elites. The findings underscore how elitesʼchanging bargaining power, rather than static preferences, shapes their resistance to or alignment with democratic backsliding, with struggling elites being the most inexpensive to coopt.