CPO-2002 Lecture Notes - Lecture 25: Dependent And Independent Variables
Document Summary
All societies contain some actors who own hard-to-redeploy, or fixed, assets (no credible exit threat) All societies contain some actors who own easy-to-redeploy, or liquid, assets (credible exit threat) Many studies have shown that democracy is less likely to emerge and survive in countries whose economies depend heavily on things like oil production or mineral extraction. Resource curse refers to the paradox that countries with an abundance of natural resources tend to experience things like poor governance, low levels of economic development, civil wars, and dictatorships. This argument suggests that democracy is unlikely when the state is autonomous and does not depend on its citizens. Foreign aid can reduce the dependence of the state on its citizens. Numerous studies show that foreign aid to dictatorships harms the welfare of the average citizen and helps the dictator hold onto power. This argument suggests that democracies should produce reasonably good economic performance.
