TY  - JOUR
AU  - Brender,Adi
AU  - Drazen,Allan
TI  - Why is Economic Policy Different in New Democracies? Affecting Attitudes About Democracy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13457
PY  - 2007
Y2  - October 2007
UR  - http://www.nber.org/papers/w13457
L1  - http://www.nber.org/papers/w13457.pdf
N1  - Author contact info:
Adi Brender
Research Department
Bank of Israel
Jerusalem 91007
ISRAEL
E-Mail: adib@bankisrael.gov.il

Allan Drazen
Department of Economics
University of Maryland
College Park, MD 20742
Tel: 301/405-3477
Fax: 301/405-7835
E-Mail: drazen@econ.umd.edu
AB  - When democracy is new, it is often fragile and not fully consolidated. We investigate how the danger of a collapse of democracy may affect fiscal policy in new democracies in comparison to countries where democracy is older and often more established. We argue that the attitude of the citizenry towards democracy is important in preventing democratic collapse, and expenditures may therefore be used to convince them that "democracy works". We present a model focusing on the inference problem that citizens solve in forming their beliefs about the efficacy of democracy. Our approach differs from much of the literature that concentrates on policy directed towards anti-democratic elites, but our model can encompass that view and allows comparison of different apporoaches. We argue that the implications of the model are broadly consistent with the empirical patterns generally observed, including the existence of political budget cycles in new democracies not observed in established democracies.
ER  -