DEMOCRATIC SURVIVAL AND STABILITY: FROM LIPSET HYPOTHESIS TO ECONOMIC PRODUCTIVITY
This article is devoted to the analysis of the impact of economic development on the survival of democratic regimes and success of the processes of democratization. The study is based on the hypothesis proposed by S.M.Lipset and further elaborated by A.Przeworski that the growth of social welfare leads to the broadening of a “compromise space” and convergence of different interest groups’ preferences over the redistribution of resources, which in its turn miti-gates conflict over the political course. Based on Lipset’s and Przeworski’s ideas, the authors build a mathematical model that illustrates how social capital (more precisely - its component responsible for building trust among strangers) and in-stitutional quality allow for the stabilization of democratic regimes, through the increase of economic productivity and growth of welfare. Accor ding to the pre-dictions of the model, total factor productivity (TFP), defined as the opportunity of individuals and/or firms to cooperate efficiently, incre ases the overall wealth of the society and fosters the consolidation of democracy by reducing social tensions and improving the mechanism of economic policy elaboration. On the basis of the mathematical model, the authors derive a hypothesis that higher levels of TFP increase chances of democratic survival. They test the hypothesis on the extensive empirical dataset using survival analysis method. The results show that TFP is a statistically significant and strong predictor of a probability of democratic failure. On average, ceteris paribus, the increase in TFP by 10 percentage points reduces the risk of democratization failure by 1.2-1.4 times. The obtained results are robust to different model specifica-tions and control variables.