The Political Economy of Liberal Democracy

This paper develops a taxonomy of political regimes that distinguishes between three sets of rights—property rights, political rights and civil rights. The truly distinctive nature of liberal democracy is the protection of civil rights (equal treatment by the state for all groups) in addition to the other two. The paper shows how democratic transitions that are the product of a settlement between the elite (who care mostly about property rights) and the majority (who care about political rights), generically fail to produce liberal democracy. Instead, the emergence of liberal democracy requires low levels of inequality and weak identity cleavages.