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Demagogues and the economics fragility of democracies
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Bernhardt, Dan, Krasa, Stefan and Shadmehr, Mehdi (2022) Demagogues and the economics fragility of democracies. American Economic Review, 112 (10). pp. 3331-3366. doi:10.1257/aer.20211125 ISSN 0002-8282.
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Official URL: https://doi.org/10.1257/aer.20211125
Abstract
We investigate the susceptibility of democracies to demagogues, studying tensions between representatives who guard voters’ long-run interests and demagogues who cater to voters’ short-run desires. Parties propose consumption and investment. Voters base choices on current-period consumption and valence shocks. Younger/poorer economies and economically-disadvantaged voters are attracted to the demagogue’s dis-investment policies, forcing far-sighted representatives to mimic them. This electoral competition can destroy democracy: if capital falls below a critical level, a death spiral ensues with capital stocks falling thereafter. We identify when economic development mitigates this risk and characterize how the death-spiral risk declines as capital grows large.
Item Type: | Journal Article | ||||||
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Subjects: | J Political Science > JC Political theory | ||||||
Divisions: | Faculty of Social Sciences > Economics | ||||||
Library of Congress Subject Headings (LCSH): | Democracy, Populism -- Econometric models | ||||||
Journal or Publication Title: | American Economic Review | ||||||
Publisher: | American Economic Association | ||||||
ISSN: | 0002-8282 | ||||||
Official Date: | October 2022 | ||||||
Dates: |
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Volume: | 112 | ||||||
Number: | 10 | ||||||
Page Range: | pp. 3331-3366 | ||||||
DOI: | 10.1257/aer.20211125 | ||||||
Status: | Peer Reviewed | ||||||
Publication Status: | Published | ||||||
Reuse Statement (publisher, data, author rights): | Copyright © 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022 by the American Economic Association. Permission to make digital or hard copies of part or all of American Economic Association publications for personal or classroom use is granted without fee provided that copies are not distributed for profit or direct commercial advantage and that copies show this notice on the first page or initial screen of a display along with the full citation, including the name of the author. Copyrights for components of this work owned by others than AEA must be honored. Abstracting with credit is permitted. The author has the right to republish, post on servers, redistribute to lists and use any component of this work in other works. For others to do so requires prior specific permission and/or a fee. Permissions may be requested from the American Economic Association Administrative Office by going to the Contact Us form and choosing "Copyright/Permissions Request" from the menu. Copyright © 2022 AEA | ||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||
Date of first compliant deposit: | 28 June 2022 | ||||||
Date of first compliant Open Access: | 5 July 2022 | ||||||
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