Democratization and the Rule of Law∗
نویسندگان
چکیده
This paper provides a theory of the interactions between democratization and the emergence of rule of law. Heterogeneous individuals can make costly investments in protection against expropriation by others and the state. The public enforcement of property rights, whose cost depends on these investments, is chosen by the politically enfranchised population. We characterize the dynamic evolution of the economy in which both the political regime and property rights are endogenously determined. There are multiple politico-economic equilibria in terms of public and private property rights protection, which interact with different democratization scenarios whose determinants and consequences are studied. Democratic transitions under conflict may lead to failed democracies with worse property rights protection than oligarchies. Democratic transitions supported by a large consensus, however, serve as coordination device and lead to better protection of property and more stable polities. JEL-classification: H10, O10, N10
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