The Political Economic Nexus

In 1974, the third wave of democracy was introduced. This triggered a paradigm shift whereby many governments switched to formal structures that had constitutional backing. Liberal democracies arose at this time. Their features included political accountability, free and fair electoral processes, rule of law, due process and civil liberties. This type of democracy has been clearly defined by Cheibub (1996).

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Today, one outstanding feature of liberal democracies is that they have yet to become consolidated, owing to a slow pace of the legitimization process. In this case, the strength of democracies is believed to be determined through political contestation and expression.

This is in sharp contrast with the views of Mainwaring and Pérez-Liñán (2003), who argue that democracy has existed despite bad economic times in Latin America. They have argued that a low level of development is not a good predictor of strengthening democracy. Conversely, high per capita income per se has had a rather modest effect on the stabilization of Latin American liberal democracies. The main weakness of this argument is the lack of a solid structural explanation, unlike in Cheibub’s argument.

In sharp contrast, Colaresi (2003) sees a strong relationship between economic development and the process of democratization. The central area of focus here is international and comparative politics. International conditions such as conflict, external threats, and trade openness are also seen to alter the pace of democracy. For instance, through robust regression and estimating equations, Colaresi (2003) portends that external threats slow down the pace of democratization.

Pinto and Timmons highlight a rather different comparison: that of economic development and how it is affected by political competition. However, they are not conclusive on how political competition can reduce the labor mobilization rate.