Lecture 2.2

Modernization Theory

Emmanuel Teitelbaum

Modernization Theory

What is Modernization Theory?

  • Based on observation by Lipset (1959)
  • Noted that democracy is highly correlated with development
  • Took on guise of causal argument
    • Wealth → development
    • Led to decades of debate

Some Stylized Facts

  • Wealthier countries tend to be more democratic
  • Relationship tends to be stronger before WWII
  • There also tend to be big regional differences
    • In some regions the relationship is evident
    • In others, not as much

Modernization Before 1945

Modernization in the Post-War Period

Thinking About the Data

  • Which countries fall on the line in the two graphs?
  • Which are outliers?
  • Which countries move into the southeast quadrant?
    • Why is that significant?
  • Find your favorite country.
    • Is it where you thought it would be?

Detour: Measuring Democracy

The V-Dem Institute

  • Varieties of Democracy (V-Dem)
  • Polyarchy score
    • Robert Dahl
    • Polyarch–form of government in which power is vested in multiple people
  • V-Dem’s polyarch index is based on concept of electoral democracy

Electoral Democracy

Electoral Democracy: “seeks to embody the core value of making rulers responsive to citizens, achieved through electoral competition…[P]olitical and civil society organizations can operate freely, elections are clean..and affect the composition of the chief executive.”

Other Ways to Think About Democracy

Liberal Democracy: “emphasizes the importance of protecting individual and minority rights against the tyranny of the state and the tyranny of the majority…judges the quality of democracy by the limits placed on government.”


Participatory Democracy: “emphasizes active participation by citizens in all political processes, electoral and non-electoral..” and “engagement in civil society organizations, direct democracy, and subnational elected bodies.”

Back to the Data

Democracy and Development by Region

Thinking About the Data

  • Where is the relationship strongest?
  • Where is it weakest?
  • Why is the relationship stronger or weaker in some places?
  • What are some regional outliers? Why are they different?

Democracy and Development Over Time

Thinking About the Data

  • Pick your favorite era
  • Was this era more or less democratic than modernization theory would predict?
  • Does this surprise you?

More Theory

Endogenous Democratization

  • Democracy is a direct consequence of economic development
  • Synonymous with modernization theory
    • Endogenous–coming from within
    • Democracy is a result of wealth
  • Mechanisms
    • Industrialization
    • Urbanization
    • Rise of middle class
    • Education

Exogenous Democratization

  • Exogenous–resulting from an external cause
  • Wealth does not cause democracy
  • But democracy is more easily sustained in wealthy countries (Przeworski et. al.)
  • Mechanisms unclear (Boix & Stokes)

Are the Wealthiest Countries Democratic?

In terms of Purchasing Power Parity…

Thinking About the Data

  • Discuss the differences between GDP and nominal terms
  • Do you think the most recent data support modernization theory?
  • Or is exogenous theory more convincing?

Squaring the Circle

Acemoglu & Robinson, figure 4

CPE Website