The Economic Determinants of Democracy and Dictatorship

Vocabulary practice flashcards covering Chapter 6 on modernization theory, income effects, credible commitment problems, the resource curse, foreign aid, state capacity, and economic inequality.

Modernization Theory

A political economy paradigm arguing that all societies pass through linear historical stages of economic development, moving from large agricultural sectors to larger industrial and service sectors, which increases asset mobility and promotes democracy.

Gross Domestic Product (GDP)

A economic metric measuring the total monetary value of all final goods and services produced within a country during a given year, indicating the overall size of an economy.

GDP Per Capita

A country's gross domestic product divided by its total population size, serving as a standard indicator of economic output relative to population size.

Purchasing Power Parity (PPP)

An economic method that calculates the price of a standard bundle of goods across different countries using local currencies, enabling meaningful cross-country income comparisons without market exchange rate distortions.

Big Mac Index

An informal PPP exchange rate indicator popularized by The Economist magazine that compares the price of a McDonald's Big Mac burger across different national currencies to assess whether an exchange rate is overvalued or undervalued.

Przeworski's Survival Argument

The thesis by Adam Przeworski proposing that higher national income does not cause democracies to emerge, but strongly promotes democratic survival because regime transition to dictatorship represents a high-risk gamble for the rich.

Credible Commitment Problem

A time-inconsistency situation where an actor holding power makes a promise today but has a clear incentive to renege on that promise in the future once circumstances or leverage change.

Sovereign Debt

Financial debt accrued directly by a sovereign or Crown, creating a credible commitment problem because no higher legal authority exists to force the sovereign to repay lenders.

Structural Dependence of the State on Capital

The political dynamic wherein government growth, tax revenues, and employment depend heavily on private capital investment, forcing rulers of both left and right political parties to adopt policies favorable to owners of mobile capital.

Political Resource Curse

The empirical finding that countries heavily reliant on natural resource revenues like oil tend to remain dictatorial, corrupt, and resistant to democratic reform because rulers do not depend on citizens for tax revenue.

Foreign Aid

The voluntary international transfer of capital, goods, or services between governments or international agencies, which can increase recipient government autonomy from citizens and hinder democratic emergence unless specific conditions are met.

Foreign Aid Curse

The dynamic in which foreign aid functions like natural resource revenue by providing non-tax funds that liberate recipient governments from citizen dependence and prolong dictatorial rule through patronage and corruption.

Remittances

Private monetary or social resource transfers sent by international migrants back to families in their home countries, which bypass recipient governments, reduce citizen dependency on state welfare, and facilitate collective action.

State Capacity

The administrative, technical, and bureaucratic capability of a state to monitor, control, regulate, and tax economic activity and population behavior within its territory.

Constitution of Medina

A 622 CE social contract created by the Prophet Muhammad in Medina establishing a pluralistic Islamic state with common citizenship and guaranteed social, legal, and economic equality across diverse religious communities.

Land Inequality vs. Income Inequality

The distinction identified by Ansell and Samuels where land inequality (held by landed aristocrats with immobile assets) hinders democratization, whereas income inequality (associated with an expanding middle class holding mobile assets) can promote democratization.

Exit, Voice, and Loyalty (EVL) Game Tree

A game-theoretic framework modeling strategic interactions between Parliamentarians and the Crown, demonstrating that a constrained state emerges when parliamentarians possess credible exit threats ($E > 0$) and the Crown is dependent ($L > 1$).

The State-Builder's Dilemma

The conflict described by David Lake in which donor nations intervene strategically to build institutions in a recipient state, but the recipient country's need to respond to foreign donor interests erodes its domestic legitimacy and sovereignty.

Agrarian State (Grain State)

An early historical state form dependent on agricultural production where state elites easily taxed visible, immobile crops like grains and restricted worker mobility through serfdom or slavery to maintain predatory dictatorial rule.

Statist Development Strategy

An economic policy model relying on massive public sectors and state-owned enterprises, which ties middle-class material well-being directly to authoritarian state survival and deters democratic movement.