Strategic Model of Economic Performance and Democratization in South Korea and Taiwan

Abstract

A debate, fanned by the experiences of South Korea and Taiwan, persists over how economic growth leads to democratization. This article provides a theoretical model showing that economic downturns lead to democratization and evaluates the conclusion systematically with data from South Korea and Taiwan. The model and results corroborate the hypothesis that economic downturns motivate government and non-government actors to pursue political reforms and democratization and highlight several contributions. They show democratization as the outcome of strategic responses pursued under weak economic conditions. Further, the findings are robust to alternative specifications of democratization. The results also bring empirics into line with theoretical expectations about democratization while simultaneously revealing that it is not a panacea for lack of support.