elites, oil, and democratization

8/4/2019 Elites, Oil, And Democratization

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Elites, Oil, and Democratization:A Survival Analysisn

Mehmet Gurses, Florida Atlantic University

Objective. This study explores the relationship between natural resource wealth,most notably oil, and democratic survival. I contend that natural resources helpsustain democratic regimes by easing social conflict between the rich and the poor.

As such, the availability of abundant natural resource revenues alleviates the elitesfear of redistribution of wealth, thereby stabilizing the regime. Methods. I estimatea series of survival analyses for the period between 1960 and 1999. Results. Elite

support and oil wealth independently help stabilize democracies. Conclusions. Theresults bring the widely held views on the link between oil and democracy intoquestion and invite further scrutiny.

A large number of studies have examined the link between natural re-sources (most notably oil-generated wealth) and democracy. These studiestend to delineate the detrimental effects of resource abundance on economicand political outcomes. The resource curse argument that is outlined inexisting literature links natural resource wealth with authoritarian regimes

and economic stagnation. The proponents of this view maintain that theavailability of revenues generated from exporting natural resources providesincentives for authoritarian tendencies. Leaders with significant amounts ofwealth at their discretion can buy political support, easing social pressure forreform, and/or use the surplus revenues to maintain a coercive capability torepress demands for political change (e.g., Mahdavy, 1970; Ross, 2001;Boix, 2003; Jensen and Wantchekon, 2004). Nevertheless, the emergence ofnatural-resource-rich democracies (e.g., Mexico, Chile, Indonesia) in theaftermath of the Cold War coupled with those democracies that have proven

durable despite (or because of) substantial natural resources (e.g., Botswana,Trinidad and Tobago) have raised a more complex view of the relationshipbetween natural resource wealth and the endurance of democracy.

An increasing number of studies have questioned the validity of the re-source curse argument. Several richly detailed case studies providing evi-dence for the emergence of resource-rich democratic regimes argue that

nDirect correspondence to Mehmet Gurses, Department of Political Science, Florida Atlantic University, 777 Glades Rd., Social Science 384, Boca Raton, FL 33431-0991

[email protected]. The data and coding information are available upon request. The authorthanks David Mason, John Both, Andrew Enterline, Michael Greig, Francesca Campbell,Dukhong Kim, Robert L. Lineberry, and two anonymous reviewers for their invaluablefeedback and contributions.

SOCIAL SCIENCE QUARTERLY, Volume 92, Number 1, March 2011r 2011 by the Southwestern Social Science Association
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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these regimes have not arisen in spite of resource wealth but, rather, theyhave come about because of it (Karl, 1987; Crystal, 1989; Clark, 1997;Okruhlik, 1999; Luciani, 2005, 2007). In addition, results from some large-N cross-national statistical models have undermined the plausibility of a

categorical denial of any positive effect of resource wealth on democrati-zation (Herb, 2005; Smith, 2007; Dunning, 2008; Gurses, 2009; Morrison,2009).

Most of the large-N econometric studies exploring the relationship be-tween natural resource wealth and the emergence and/or survival of dem-ocratic regimes (Acemoglu and Robinson, 2001; Boix, 2003; Dunning,2008; Morrison, 2009) explore the theoretical link between democracy andelites. Other studies ascribe the genesis of democratic regimes from theperspective of social pacts and emphasize the critical role elites play in

democratic regimes (ODonnell and Schmitter, 1986; Burton, Gunther, andHigley, 1992; Higley and Burton, 2006). The gap between the large-Nempirical studies and the social pact theory has turned into an obstacle inbetter capturing the mechanisms at work in stabilizing democratic regimes.This is in part due to the difficulties involved in operationalizing the elitesupport.

Another complication for statistically testing the correlations betweenelites, democracy, and natural resource wealth arises from the tendencies intodays scholarship to systematically lump together transition to democ-

racy and sustenance of democracy as a single category. Conditions underwhich a democratic regime emerges can be quite different than those thathelp sustain it. As a result, factors that have been found to be robustlyassociated with democratic regimes (such as economic development, whichis commonly measured as GDP per capita) can have quite different impactson making a transition to and sustaining a democracy (Przeworski andLimongi, 1997; Przeworski et al., 2000). As Tilly (2004:35, emphasisadded) succinctly summarizes, democracy more closely resembles a lake. . .. Lakes form in a limited number of contrasting waysfilling of a glacial

basin or volcanic crater, damming of a river, human excavation, and soforthbut once in existence share many properties with other lakes: tidalexpansion and contraction, regular vertical and horizontal currents, layeringof temperatures and of organisms, formation of sand through wave action,and so on.

Therefore, it is incumbent on us to separate the means by which weevaluate the formation of democracies from the maintenance of democra-cies. A careful scrutiny of the proposed effects of natural resources on sur-vival of democratic regimes is required in order to clarify the ways natural

resource wealth can help a democracy endure. How does natural resourcewealth influence the chances for survival of a democratic regime? Morespecifically, can abundant oil revenues help sustain a democratic regime?

In this study, I engage the debate on natural resource wealth, notably oil,and democratic endurance. Building on previous studies (e.g., Smith, 2007;

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Dunning, 2008, Morrison, 2009), I contend that the perceived detrimentaleffects of natural resources can become an important advantage to mitigatesocial conflict among the actors involved, most notably the rich and thepoor. More specifically, under a democratic system of governance, an

abundance of natural resources can lubricate interactions between actors,ameliorating social conflict and thereby stabilizing the regime.1 The hy-potheses are put to a test against cross-national data for the 19601999period. The findings bring the existing evidence on the subject into questionand shed further light on the mechanisms by which natural resource wealthcan stabilize a democratic regime.

Elites, Natural Resource Wealth, and Democracy

The theoretical framework laid out in this study is predicated on theassumption that conflicts among individuals and groups spring from thecompetition for power and resources. A society is considered to be com-posed of upper and lower classes. The terms upper classes, elite, andrich are used interchangeably. All refer to groups or individuals that are incontrol of substantial portions of the nations wealth and occupy the topechelons of the social order. Similarly, the terms lower classes and poorare used interchangeably in reference to those not at the top of the social

order and not in possession of enough economic resources to provide aviable challenge and/or alternative to the upper classes control over power.2

This definition departs from Burton, Gunther, and Higleys (1992) andODonnell and Schmitters (1986) elite definitions. I concur with Burton,Gunther, and Higley (1992:8) that elites are characterized by their ability toaffect national political outcomes regularly and substantially. This definition,however, does not distinguish powerful groups or individuals from the lowerclasses and upper classes. The lower classes struggle against the upper classes toachieve a higher rank on the socioeconomic scale might produce some or-

ganized movement from which a group of leaders emerges and articulates thedemands from below. Nonetheless, the term elite in this study refers only tothose who already occupy the upper level of a social structure.

1This study addresses the effect of natural resource wealth (notably oil) and elite supporton the sustainment of democratic regimes. The effect of these two variables has been thesubject of numerous scholarly works. Some scholars (e.g., Burton, Gunther and Higley,1992; Higley and Burton, 2006) have relied on the link between elite support and thetransition to and sustenance of democratic regimes. On the other hand, an important number

of empirical works point to a link between natural resources and democracy. The existingliterature, therefore, by and large treats the effect of these two variables separately from eachother. Therefore, I opt to confine my analysis to the independent effect of each variable.

2Clearly, such dichotomous borders between upper and lower classes exist largely intheory, while the reality of the social landscape is far more complex. For analytical purposes,however, one can divide a society into two broad categories: upper and lower classes (see, e.g.,Boix, 2003; Acemoglu and Robinson, 2001, 2006a, 2006b; Dunning, 2008).

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I argue that the emergence and durability of power-sharing institutions aredetermined primarily by the interactions between the upper and lower groupsin a social structure. The theory proposed in this study has strong elitistelements and stresses the imperative nature of socioeconomic transformations

that provide alternative paths to power without directly threatening the es-tablished elites vested interests. Forging such nonintrusive paths to powerreduces the nature and degree of threat to the elites posed by disfranchisedgroups as democratization takes hold and they gain a voice in the system.

Transition to democracy does not necessarily change the balance of powerbetween previously disfranchised segments of society and elites. Nel(2005:23) tests whether higher levels of inequality lead, in democraciesat least, to government initiatives to redistribute wealth through progressivetax systems and concludes (2005:36) that it is nave to believe that the

introduction of competitive elections and extension of civil liberties wouldof itself negate the impact of hegemony and promote redistribution.3

A transition to wider participation through the introduction of democraticinstitutions is not likely to survive if it is not supported by the upper classes.The pressure from lower classes, emboldened by the introduction of demo-cratic institutions, will generate conflict between the poor and the rich, inwhich the latter will be more likely to prevail. The upper classes often have thecapability and willingness to manipulate the system such that redistribution isblocked or evaded (Dorner, 1992). In other words, as Acemoglu and Robinson

(2006a) explain, a de jure change, such as a transition to a democratic systemof government, does not necessarily produce de facto changes, such as theimplementation of a more democratic power-sharing agreement between elitesand the lower classes. In fact, as the majority (the poor) are empowered by theshift to democratization, elites tend to invest in de facto political power tooffset their loss of de jure political power. Put differently, economic institutionsand the elites position in the system of social stratification remain intact evenafter a change in the distribution of de jure political power.

This does not suggest a static relationship; the gap between the rich and poor

may narrow over time. Nevertheless, it is crucial that such narrowing of the rich-poor gap should not come at a direct expense of the upper classes. The relativelynarrower gap between the rich and the poor in developed (i.e., democratic)societies has been facilitated by the over-all increase of national income . . . notso much by reduction of the income of the relatively rich as by the faster growth ofthe income of the relatively poor (Lipset, 1960:64, emphasis added).4

The key behind a sustainable democratization event is a class of politicalelites that is sufficiently confident in its own position such that, without

3See also Bollen and Jackman (1985:448). Ross (2006:861) concludes that democraciesoutperform nondemocracies in spending on education and health. This spending, however,Ross continues, tends to benefit middle- and upper-income groups, leaving low-incomegroups unaffected.

4 Lipset (1960:64 nn. 32, 33) quotes the U.N. Preliminary Report on the World SocialSituation.



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losing power, it can support free and fair elections geared toward opening upthe political system (Higley and Burton, 2006:12). In democracies, as someprevious studies have pointed out, redistributional pressures from previouslyexcluded groups put elites interests at stake, thereby turning the rich into an

anti-democratic force (e.g., Acemoglu and Robinson, 2001; Boix, 2003).Therefore, in democracies, due mainly to this pressure for redistribution ofthe nations wealth, the threat to the regime primarily comes from the elite,not from the masses (Morrison, 2009).5 At this juncture, natural resourcewealth can turn into an important comparative advantage by easing socialconflict between the poor and the rich. Resource abundance can lay thegroundwork for a compromise by alleviating the upper classes fear of a massredistribution of wealth.6As such, the primary mechanism that mitigates theconflict, thereby stabilizing a democratic regime, is the natural resource

abundance (i.e., oil wealth) that helps alleviate elites fear of redistributionthrough less taxation of wealthy elites (Morrison, 2009:122).7

Second, natural resource wealth can strengthen a newly created demo-cratic regime through investing back into it. Despite the lack of consensusover the link between income and democracy (e.g., Lipset, 1959; Przeworskiand Limongi, 1997; Przeworski et al., 2000; Epstein et al., 2006), one pointstands out: higher levels of income help sustain an incident of democra-tization. In fact, if no democracy fell ever, regardless of everything else, in acountry with a per capita income higher than . . . $6,055 (Przeworski and

Limongi, 1997:164), countries with abundant mineral wealth, once theybecome democracies, should have a better chance to sustain it than countrieswithout such resources.

To recap, the empowerment of the poor (the majority) and the demandsfor redistribution of a nations wealth can be ameliorated by the naturalresource revenues accruing to the state. The perceived detrimental effects ofoil revenues, then, can turn into an asset to alleviate the conflict between thenewly franchised majority and the rich, thereby stabilizing the regime.

H1: A democratization episode is more likely to be enduring if that change issupported by the elites.

H2: A democratization episode is less likely to fail in countries with largemineral revenues.

5 Morrison (2009) argues that nontax revenues (e.g., oil and foreign aid) can help stabilizeboth authoritarian and democratic regimes through increased social spending and less tax-ation of elites, respectively.

6For an excellent game-theoretic model on how natural resource abundance mitigates thefear of redistribution of private income through taxation and thereby helps stabilize dem-ocratic regimes, see Dunning (2008).

7 Morrison (2009:126) provides statistical evidence for his proposition that nontax rev-enues lead to a decreased taxation of elites in democracies.



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Research Design and Model Specification

To assess what factors play a role in sustaining an episode of democra-tization, I used cross-national time-series data between 1960 and 1999 for

all countries. The unit of analysis is the postdemocratization country year.Toward this end, I analyze all democratization events that occurred withinthe period under analysis.8 The sample includes 79 cases of democratizationwith divergent economic and social structures.

Dependent Variable

I conceptualize democratization as increases in breadth and equality of

relations between a government and its subjects; this does not mean arrival atfull, definitive democratic functioning, but any substantial move toward higherlevels of [democracy] (Tilly, 2004:14, emphasis added). More specifically,democracy is a process, not an end state. And it is often the case, the journeyis more important than destination (Epstein et al., 2006:552).

The dichotomous measures used in existing literature divide countries intotwo broad camps; democracies and nondemocracies. Such broad classifica-tions, however, exclude cases that possess some, but not all, of the propertiesthat characterize full democracies (Epstein et al., 2006:551). This coding

lumps Algeria, Iran, Jordan, Malaysia, and Saudi Arabia together and fails todistinguish, for example, substantial differences between Saudi Arabias polityand that of Jordan. Obviously, by standard indices of democracy, some ofthese events fall short of a full transition to democracy; however, treatingregimes with important democratic elements (such as Jordan and Algeria) thesame as regimes with essentially no democratic properties (e.g., Saudi Arabia)is fundamentally misleading. Mufti (1999:100), for instance, describes theintroduction of free and fair elections in 1989 in Jordan as one of the mostsignificant experiments in political liberalization in the Arab world (see also

Ryan and Schwedler, 2004). Likewise, Esteshami (1999:219) describes thechanges that the Algerian regime went through in the early 1990s as po-litically significant. Both countries made substantial improvements, movingahead seven points on the polity scale in the 1990s, from 9 to 2.

To better capture the variation among democratic regimes, I use thePolity IV measure of regime change (regt and d4 variables) to identify anepisode of democratization. At least a three-point positive change in thePolity composite index of democracy, which ranges from 10 (least dem-ocratic) to 110 (most democratic), identifies an episode of democratiza-

tion.9

The event fails (ends) when that country experiences at least a three-point negative change in its Polity score or when the central political au-

8The results presented in Table 1 are based on the period 19711999.9Previous studies have also adopted a similar strategy to assess regime stability (e.g., Smith,

2007; Morrison, 2009).



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thority collapses. The outcome variableis the duration in years of an incidentof democratization.10 Of the 79 cases that I include in this analysis, 20 ofthem failed within the timeframe.

The three-point threshold, to some extent, like any measure that attempts

to identify and/or distinguish a system of governance from another, is in-herently arbitrary. Nevertheless, a closer look at the events that have led to atleast a three-point increase versus one- or two-point increases reveals an im-portant difference; the former indicates a substantial constitutional change. Toclarify, consider the change that occurred in South Africa in 1994. Followinga long and bloody civil conflict, the apartheid regime came to an end. Fromthe ashes of the civil war emerged a new constitution, a bill of rights applicableto all citizens, and universal suffrage (Stearns, 2001:107273). Consequently,the Polity score for South Africa increased from 6 to 9. The three-point

increase in South Africas Polity score, therefore, reflects a substantial movetoward higher levels of protected consultation [i.e., democracy] by improvingthe breadth and equality of relations between the government and its pre-viously disfranchised subject population (Tilly, 2004:14). This change in theregime is in accordance with Vanhanens index of democracy (2000), whichranges from 0 to 100, with higher numbers corresponding to higherlevels of democracy. The country had an increase of 15.06 points on the indexof democracy in 1994, up from 3.1 to 18.07.

Independent Variables

The two primary independent variables are ELITES SUPPORT for democ-ratization and NATURAL RESOURCE WEALTH. Identifying the key actor(s) be-hind an episode is not an easy task. However, for analytical purposes, onecan locate the two broadly defined groups, elites and opposition (nonelites),along a continuum in terms of their relative impact on the formation anddesign of the change (Huntington, 19911992:583).

Elites are groups who can affect national political outcomes regularly andsubstantially (Burton, Gunther, and Higley, 1992:8). The incumbencyposition does not necessarily mean the power to produce regular andsubstantial political outcomes. This does not suggest a static and irre-versible hierarchy. Groups that occupy the lower levels of a social ordermight replace the elites over time. The principal rule for power consoli-dation and becoming elites in the social order is whether the lower classesthat took over the system are able to subdue challenges from within. The

10

To be sure, transition to democracy, democratization, and an incident of democ-ratization all refer to a substantial move, defined as at least 3-point positive change in thePolity composite index of democracy. A country enters the data set after experiencing suchchange. The operationalization of the dependent variable requires the inclusion of some casesthat may not be coded as democracies according to standard definitions. The statisticalmodel controls for such differences. Nevertheless, the reader should keep this in mind wheninterpreting the results.



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victory of lower classes against the traditional Iranian elites in 1979, forinstance, has been consolidated, and demands from new social actors for asay in the decision making can be treated as a conflict between the new elitesand the new nonelites. Therefore, the change toward wider participation in

1982 in Iran is treated as a lower-class-led change, whereas the change in1996 is considered an elite-led change.

In some cases, an incident of democratization might result from theinvolvement of both upper and lower classes. As Huntington (19911992)put it, it is sometimes difficult to delineate the line between transforma-tions where those in power in the authoritarian regime take the lead(19911992:590), and transplacements where democratization is broughtabout by synthesized action taken by the elites and the challengers. There areinstances in which democratic events can be validly categorized as either elite

led or opposition led.The crucial point is whether the episode of democratization was pre-

dominantly designed and controlled by the elites. To give an example, thetwo democratic openings in Taiwan in 1987 and 1992 were affected by theopposition forces demands, yet they were designed, introduced, and con-trolled by the ruling elites (Huntington, 19911992; Pang, 1992; Lin,1998). Where the elites fail to provide a road map or an exit strategy (e.g.,Guatemala 1944, Argentina 1983) the changeis most likely to be dominatedby the nonelites and often accompanied by drastic redistributive economic

policies (e.g., Nicaragua 1981, Spain 1931). The Spanish democratization in1931 constitutes a paradigmatic example for nonelite-led democratization.The Republicans and Socialists electoral victory, which culminated in an11-point increase on the Polity scale (from 6 to 17), was followed by theredistribution of aristocratic lands (see Higley and Burton, 2006:6061).11

Elite support (or lack thereof) for a democratization episode is primarilymeasured in terms of whether a drastic redistribution of wealth occurredfollowing or during the episode (e.g., Spain 1931) or whether the elitesopenly expressed their support (or lack thereof) for the new regime (e.g.,

Dominican Republic 1979). Identifying to what extent the elites were in-volved in a democratization event is a daunting task, but numerous scholarshave attempted to do so by providing in-depth analysis of a substantialnumber of democratization events. I consulted, among others, Huntington(19911992), Yashar (1997), Collier (1999), Booth et al. (2006), and Hi-

11The coding at first glance might seem subjective yet the elite variable was coded after acareful examination of many sources. The coding has face validity as it is embedded in theliterature on elites and democratization. Second, to provide further evidence that the coding

is not subjective, I consulted John Higley and Michael Burtons (the two scholars consideredby many to be authorities on the subject) detailed study, entitled Elite Foundations ofLiberal Democracy. Due to differences in operationalization but more importantly becauseof different timeframes (the data availability has limited my sample to the post-1960 period),I was able to check 23 of the cases included into my analysis. Out of these 23 cases, mycoding matches their coding for all but one case. Changing the coding for this case led to anincreased support for the hypothesis.



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gley and Burton (2006) to code the ELITE variable. Where such studies werenot available, I primarily relied on Stearnss (2001) The Encyclopedia of World Historyto decide whether elites were alienated and excluded from theprocess of change. To capture the elites role in sustaining an incident of

democratization, I defined a dichotomous variable equal to 1 for casessupported by the elites and 0 for those in which the upper classes wereexcluded from designing the new regime.12 Of the 79 cases that I was able toinclude in the model, 68 of them were coded as elite led and the re-maining 11 cases were coded otherwise. The mean duration for the ELITE-LED democratization episodes is significantly higher than the mean durationfor those cases in which the elites were excluded from the process (7.7 vs.6.2; Pr (jTj > jtj)5 0.0017), suggesting some evidence for the hypothesis.

What remains to be seen is what accounts for the variation in the outcome, a

task undertaken in the analysis section.To measure the effect of natural resources, I utilized two measures widely

used by others: FUEL and ORES AND METALS EXPORTS as percentages of mer-chandise exports. These data come from the World Development Indicators(WDI). The primary commodity exports as a share of GDP or of totalexports have been a common measure in the literature, yet in recent yearsscholars have discovered more precise measures of natural resource wealth(Humpreys, 2005). Ross (2008:11112) makes an argument for using oilrents per capita instead of oil exports divided by GDP, as the former offers a

finer measure of oil production value while circumventing endogeneity is-sues that arise from the measuring of exports rather than production.Humpreyss (2005:523) OIL PRODUCTION variable records average amountsof daily oil extraction (measured in millions of barrels per day) in anyparticular year. I opted to use the per-capita version of these data as the oileffect might be conditioned by the population size (Morrison, 2009).

Next, Dunning (2008:112) reports the data for the OIL RENTS PER CAPITAand TOTAL RESOURCE RENTS PER CAPITA, which include oil, gas, and manyother nonoil rent-producing minerals (e.g., copper). Therefore, to check for

robustness, I employed Humpreyss (2005) and Dunnings (2008) OIL PRO-DUCTION PER CAPITA and OIL RENTS PER CAPITA, respectively, as alternativemeasures of oil wealth.

Control Variables

The model also includes several control variables that have been found tobe robustly associated with democratic regimes. I used MANUFACTURES EX-

PORTS as a percentage of merchandise exports to measure the degreeof industrialization. This variable not only controls for the modernization

12I treated countries that came into being as democracies within the time period underanalysis (e.g., Nigeria) as elite-led democracies. Excluding these countries from the analysisyielded substantially identical results.



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hypothesis, but also accounts for the degree of social mobility, an essentialelement in Boixs (2003) theory.

To control for the impact of an agrarian economy, which is found to berobustly associated with authoritarian regimes (Moore, 1966; Rueschemeyer

et al., 1992; Boix, 2003), I utilized AGRICULTURAL RAW MATERIALS EXPORT as apercentage of merchandise exports.

The link between inequality and democracy has been well established(Bollen and Jackman, 1985, 1995; Vanhanen, 1997; Boix, 2003). To measureincome inequality, I employed UTIPs (University of Texas Inequality Pro-

ject) estimated household INCOME INEQUALITY data (EHII), derived from theeconometric relationship between the UTIPs industrial pay inequality andthe World Banks Deininger and Squire data set.13 These data can take valuesbetween 0 and 100, with higher values indicating higher levels of inequality.

I employed INCOME, measured as per-capita income in 1985 constant U.S.dollars, and ILLITERACY RATE (total adult illiterates as a percentage of peopleages 15 and above) to control for modernization effects (Fearon and Laitin,2003; WDI).

To control for the argument that democracy is more likely to emerge andendure in homogeneous societies (Horowitz, 1985, 1993), I utilized ETH-NOLINGUISTIC FRACTIONALIZATION (ELF) and RELIGIOUS FRACTIONALIZATIONindices as proxies for the degree of social fractionalization. To address thedisagreement among scholars over the link between Islam and democracy

where one school of thought argues that Islam and democracy are incom-patible mainly because Islam does not distinguish between religious andpolitical communities (e.g., Huntington, 1984, 19911992; see also Fish,2002) and the other school of thought argues for the viability of Islam anddemocracy to coexistI have utilized the percentage of MUSLIMS IN TOTALPOPULATION as a control for this cultural argument. A large population canreduce the amount of resources available for the members of society and thusincrease the level and amount of threat posed to the system. POPULATIONSIZE, in thousands, is included to control for this effect. The data for the last

four variables were obtained from Fearon and Laitin (2003).In addition to these control variables, I employed several other controls to

account for democratic experience. Past democratic experiences are likely toinfluence the longevity of a new democratic opening; a country might learnfrom its previous experiences, making the new episode less likely to fail, or itmight become more fragile as a function of its previous failures, henceincreasing its vulnerability to another failure.14

Nonetheless, treating these observations as if they are completely inde-pendent from each other might be misleading (Box-Steffensmeier and Jones,

13The data were obtained from hhttp://utip.gov.utexas.edu/data.htmli.14From a methodological point of view, the main issue is whether the subsequent failure

events are of the same kind as the previous ones (Cleves, Gould, and Gutierrez, 2002:40). In thisstudy, each episode is assumed to have the same hazard of failure; that is, the clock is reset forevery event. For a similar modeling strategy, see Schmitt-Beck, Weick, and Christoph (2006).

http://utip.gov.utexas.edu/data.htmlhttp://utip.gov.utexas.edu/data.htmlhttp://utip.gov.utexas.edu/data.htmlhttp://utip.gov.utexas.edu/data.html


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2004:155). To mitigate this problem, I employed two variables. First, acount variable (EVENT COUNT) was generated to identify the number ofepisodes a country has experienced to that point. Second, some countrieshave experienced consecutive events, where one episode follows another one

without a failure. I generated a dichotomous variable, CONSECUTIVE EPISODE,to deal with this issue.15

Next, one could argue that a three-point increase on the Polity scale isqualitatively different from, say, a five-point increase. To control for this, Idefined three dichotomous variables for cases that experienced a three-point(EVENT TYPE 1), a three- to five-point (EVENT TYPE 2), and six points andgreater (EVENT TYPE 3) increase, respectively, in their Polity scores.16 Lastly, Idefined a dichotomous variable equal to 1 for episodes that involved aregime shift and 0 if otherwise. A shift is defined as a change from autocracy

( 10, 0) to partial democracy (1, 6) or full democracy (7, 10), or as achange from partial democracy to full democracy (Marshall and Jaggers,2002).17

Method

I employed survival analysis to model sustainability of an episode ofdemocratization. Survival models are widely used to study subjects for which

the duration is of core interest. The choice of a survival model is conditionedby whether a researcher has a theoretical reason to expect that the baselinehazard will follow a certain shape. Parametric models are appropriate when aresearcher has an idea of what the baseline hazard looks like. If, however, aresearcher does not want to place any restrictions on the shape of the hazard,the semi-parametric Cox regression is more appropriate to analyze the sur-vival data (Cleves, Gould, and Gutierrez, 2002:186).

Theoretically, one can argue that the hazard rate for a democratizationepisode is more likely to follow a certain shape rather than being unknown.

An incident of democratization might face a higher (or lower) probability offailure in the early periods than in the later periods, or the hazard mightincrease (or decrease) over time. As Gates et al. (2006:899) put it, politicalentrepreneurs are not going to construct a system of government that isexpected to fail immediately. The implication is that . . . the hazard functionwould be expected to be nonmonotonic, such that the hazard of regime

15Previous democratic experience is controlled for by using a CONSECUTIVE EPISODE variable(where a country experiences a consecutive episode) and an EVENT COUNT variable (whichinvolves the number of episodes a country has experienced). Others have also controlled forthe past experience using a similar strategy. See, for instance, Smith (2004, 2007), Ulfedler(2007), and Morrison (2009).

16Of the 79 cases, 14 of them were coded as Type 1, 10 as Type 2, and the remaining 45cases were coded as Type 3 episodes. As a robustness check, I analyzed the data without thesevariables and obtained substantially the same results.

17I thank Idean Salehyan for bringing this point to my attention.



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collapse initially increases and then, as consolidation mechanisms come intoplay, the hazard declines. As such, a log-logistic model seems to be moreappropriate to estimate the model.18

Analysis

The results from the log-logistic regression are reported in Table 1. Theseresults are in accelerated survival time; a positive coefficient indicates thatthe variable increases the survival time, whereas a negative sign indicatesshorter duration. The value of the scale parameters from the log-logisticmodel, 0.27, confirms the theoretical expectation regarding the shape of the

hazards; a value less than 1 suggests that the hazard rate first rises then beginsto decline (Box-Steffensmeier and Jones, 2004:36).The positive coefficient (0.34) on the elite variable indicates that this

variable increases the survival time for an incident of democratization. Theeffect is equal to 0.91 in terms of the hazard ratio; the elite support decreasesthe risk of a democratic failure by 9 percent.19 This effect becomes morevisible in Figure 1. The figure is produced by allowing the ELITE variable tovary from 0 to 1 while holding other variables constant. The cumulativehazard, as displayed in Figure 1, is much steeper when elites are excluded

from the new regime (i.e., democratization), indicating the crucial role elitesplay in sustaining a democratic opening.The finding on fuel exports poses a challenge to the current view; once a

country experiences a democratization episode, oil revenues help sustain theregime. In statistical terms, every 1 percent increase in a countrys fuel exportsdecreases the odds of failure by about 1 percent.20 This finding suggests thatonce a country makes a substantial move toward more inclusive governance,abundant oil revenues can become a blessing rather than a curse. To illustratethis effect better, I generated a graph (Figure 2) allowing this variable to take

values of 30, 60, and 90 percent of total exports while holding other variablesconstant; large oil revenues lower the risk of a democratic breakdown.This finding poses an important challenge to the current literature re-

garding the link between oil wealth and democracy. How can one explainthis? Could this be a fluke or an artifact stemming from a few influential

18The results from the Akaike information criterion (AIC) and Bayesian Schwarz criterion(BSC) tests also suggested using log-logistic model. For more on this, see Box-Steffensmeierand Jones (2004). To deal with the temporal dependency problem, I used robust standarderrors to adjust for clustering over the same country (Box-Steffensmeier and Jones,2004:13133). To confront a simultaneity problem between the covariates and outcomevariable, the time-varying covariates (e.g., measures of industrial, agrarian, mineral economy,inequality, education, and population) were lagged one year (Box-Steffensmeier and Jones,2004:13133). For a similar strategy, see Morrison (2009:118).

19The hazard ratio was calculated as follows: [(exp( 0.27 n 0.34)]5 0.91. See, forinstance, Cleves, Gould, and Gutierrez (2002:187).

20See previous note. This effect becomes larger in the Weibull model.



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TABLE 1

Elites, Natural Resource Wealth, and Sustaining Democracy

Variable Model 1 Model 2 Model 3Elite support 0.34 nn 0.29n 0.39nn

[0.19] [0.21] [0.18]Fuel export (%) 0.03 nnn

[0.01]Oil production (per capita) 69.93n nn

[26.6.]Oil rents (per capita) 0.008 nnn

[0.003]Minerals export (%) 0.008 0.001 0.005

[0.01] [0.009] [0.004]Manufactures export (%) 0.02 n 0.03n nn 0.03nnn

[0.011] [0.01] [0.009] Agricultural export (%) 0.008 0.004 0.0009

[0.01] [0.001] [0.01]Income inequality 0.11 nn 0.10n n 0.08nnn

[0.05] [0.05] [0.03]GDP per capita (logged) 0.42 0.19 0.28

[0.32] [0.37] [0.33]Illiteracy rate 0.03nn 0.006 0.01

[0.01] [0.001] [0.01]

Ethnic fractionalization 1.03 0.9 0.46[0.85] [0.7] [0.55]Religious fractionalization 1.5nn 0.35 0.08

[0.67] [0.73] [0.7]Population (logged) 0.67nnn 0.57n nn 0.76nnn

[0.19] [0.16] [0.15]Muslim (%) 0.00007 0.007 0.002

[0.005] [0.006] [0.007]Consecutive democratization 1.64 nnn 0.66 0.99nnn

[0.55] [0.46] [0.28] Type 2 2.08nnn 1.96n nn 1.42nnn

[0.46] [0.54] [0.42]Type 3 0.77nnn 1.16n n 0.46

[0.30] [0.57] [0.40]Shift 0.006 0.58 0.04

[0.39] [0.66] [0.37]Event count 0.25 nn 0.22 0.17

[0.13] [0.14] [0.14]Scale parameter 0.27 0.29 0.28Observations 559 588 544Number of subjects 79 80 74

NOTE: Results are from a log-logistic regression. The entries are accelerated survival time.Robust standard errors are in brackets. n nnSignificant at 1 percent level; n nsignificant at 5percent level; nsignificant at 10 percent level. The significance levels are based on a one-tailedtest for the hypothesized covariates. All others are two-tailed.



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cases? A closer look at authoritarian backlashes reveals that this is not thecase. The number of cases that have not experienced a democratic break-down for the period under analysis is far more than just a few; 24 percent of

cases that have survived possess substantial oil revenues. Moreover, only twoof the 20 cases that experienced a failure are oil-rich countries.

To ensure that the results are not an artifact of the measure of oil rev-enues, I utilized other measures of oil wealth (as explained earlier). The useof Humpreyss (2005) OIL PRODUCTION PER CAPITA variable led to substan-tially similar results (Model 2 of Table 1). Next, I employed Dunnings(2008) OIL RENTS PER CAPITA and TOTAL RESOURCE RENT PER CAPITA variables.Due to space constraints, only those results based on OIL RENTS PER CAPITA arereported; the findings confirm those obtained earlier (Model 3 of Table 1).21

The findings clearly indicate that there is a strong need for going beyond theprevalent view on the relationship between oil wealth and democratizationand to question the categorical denial of any positive relationship betweenoil wealth and democracy. The effect of the second measure of mineraleconomy, nonfuel minerals, however, is not discernible from zero.22

Of the control variables, manufactured exports clearly produce longerdurations and therefore vindicate Boixs (2003) findings. The empiricalanalyses do not, however, support a negative relationship between an ag-

0

.2

.4

.6

CumulativeHazard

0 10 20 30 40Analysis Time

Elite Support= no Elite Support= yes

Log-Logistic Regression

FIGURE 1

Elite Support and Democratic Survival

21I thank Thad Dunning for sharing these data with me. The measure of mineral rents inModel 3 is also based on Dunnings data. The use of total rents per capita yielded sub-stantially similar results. For more on this, see Dunning (2008:11113).

22The fluctuation in global demand for these minerals and, relatively speaking, the lowerrevenues obtained from nonfuel minerals might have generated an insignificant relationship.See, for instance, Herb (2005) and Dunning (2008:33).



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ricultural economic structure and a democratic breakdown. A closer look atdemocratization events in countries with large agricultural sectors (e.g., ElSalvador, Guatemala) reveals important insights; the assumed negative re-lationship between an agrarian economy and democracy might not be due to

the large agrarian sector per se, but to whether elites derive a large portion oftheir income from the land. A change in the elites interests, such as thetransformation of elites from landowners and growers to exporters and in-termediaries (Paige, 1997; see also Wood, 2001, 2005), can pave the way toa more democratic and durable regime.

The coefficient on the economic inequality variable is statistically andsubstantially significant and, contrary to the current view, suggests a pos-itive relationship between sustaining a democratic regime and higher levelsof inequality. This finding, at first glance, might seem to be counterin-

tuitive, yet, coupled with the finding on the ELITE variable, it providesfurther evidence for the critical role elites play in survival of a democra-tization event. At this point, it is worth noting that the debate on the linkbetween inequality and democracy is far from being resolved. Despitestrong theoretical and some empirical evidence for the detrimental effects ofinequalities on democratization, several scholars (Bollen and Jackman,1985, 1995; Crenshaw, 1997) have pointed to shaky assumptions behindsuch expectations. To the extent that a socioeconomic structure providesalternative paths to power, rising material inequalities cease to be an ob-

stacle against democratization; the erosion of barriers for upward socialmobility helps legitimize the system despite high/rising inequalities.23 High

0

.02

.04

.06

CumulativeHazard

0 10 20 30 40

Analysis TimeFuel Exports= 30 % Fuel Exports= 60 %

Fuel Exports= 90 %

Log-Logistic Regression

FIGURE 2

Fuel Exports and Democratic Survival

23For an excellent analysis of the inequality-democracy link, see Tilly (2004). For thecritical role social mobility plays in democratization, see Boix (2003).



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levels of inequality might provide a good proxy for the leverage maintained bypowerful actors in the system, thereby mitigating elites fear of redistributionof wealth and stabilizing the regime (see, for instance, Dunning, 2008).

The measure of an increase in wealth, the GDP per capita, is not sig-

nificant at the 90 percent or better confidence level. This finding suggeststhat it may not be increasing wealth per se that helps a democratic openingsustain, but rather a specific type of economic development that lays thegroundwork for upward mobility and reduction of the threat directed to theestablished elites position within the system. Higher levels of illiteracy,however, increase the odds of failure and confirm Lipsets (1960:56) con-clusion that the effect of education on democracy is more direct andstrong and as all the relevant studies indicate . . . education is more sig-nificant than either income or occupation.

The effects of the ethnic and religious fragmentation variables are notrobust; religious fractionalization seems to increase the life of an episode ofdemocratization, whereas ethnic fractionalization seems to have no effect.Countries with large populations are much more likely to experience afailure than countries with smaller populations.

The results show some support for the consecutive episodes, which isfurther strengthened by the finding on the EVENT COUNT variable. A dem-ocratic incident that follows a prior improvement has a higher probability ofsurvival. Similarly, countries with prior democratic histories are less likely to

fail. The Type 3 change (an increase of six points or greater on the Polityscale) seems to be the most fragile change. As compared to Type 1 (anincrease of three points on the Polity scale) change, a dramatic increase onthe polity scale substantially increases the odds of failure. The Type 2 change(an increase of three to five points on the Polity scale), on the other hand,helps prolong a democratization episode. Combined with the findings onthe consecutive democratization episode and EVENT COUNT variables, theresults suggest important policy implications for the gradual nature of de-mocratization. Finally, a country with a predominantly Muslim population

is no more likely to experience a failure than a country with a small or noMuslim population. Muslim countries that have experienced a change to-ward democracy (e.g., Turkey, Indonesia, Jordan) have been able to sustainthe change.

The findings are not sensitive to the choice of method, measures, and timeperiods. As a further robustness check, I analyzed the data using anotherwidely used parametric model, Weibull regression. Moreover, I replicatedthe model utilizing Bankss (1976) PERCENTS OF WORKFORCE ENGAGED ININDUSTRIAL and AGRICULTURAL ACTIVITIES to assess the strength of industrial

and agrarian economic structures, respectively.24 I was able to include 85episodes for the period between 1937 and 1980. For this period, I employedBanks education (literacy rate5 percent of population over 15 years of age

24I thank Andrew Enterline for sharing these data with me.



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who can read and write), income (GDP pc), and population data, alongwith Vanhanens (2003) family farm variable to measure inequality. To savespace, results from alternative model specifications are not presented; how-ever, the findings confirmed those obtained earlier.

Concluding Remarks

A plethora of theoretical and empirical studies have pointed to thedetrimental effects of natural resources on democratization. Nevertheless,the emergence of natural-resource-rich democracies (e.g., Chile, Mexico,Indonesia) coupled with the established and stable democratic regimes

(e.g., Botswana, Trinidad and Tobago, Norway) have generated a heateddebate on the link between natural resources, most notably oil, anddemocracy. The number of resource-rich democracies is significantenough to demand a careful reexamination of the notion of a resourcecurse. As of 2007, the Polity score for the 25 oil-reliant countries listed inRoss (2001) varies from 10 to 110 and eight countries have a score of4 or higher on the Polity scale of democracy. Likewise, 14 countries outof 25 that are listed as mineral reliant have a score of 5 or higher on thePolity scale.

Perhaps more importantly for the purpose of this study, a large number ofresource-rich countries have been successful in maintaining their democraticregimes. In addition to the established resource-rich democracies, such asNorway, Canada, and Australia (the successes of which are sometimes as-cribed to these countries preexisting institutions and to the low ratios ofresource revenues in their total gross domestic products25) it is clear that theemergence of stable democratic regimes in Latin America (e.g., Bolivia,Chile, Ecuador, Mexico), Africa (e.g., Botswana, South Africa), and theMuslim world (e.g., Indonesia) pose an important challenge to the currentwisdom on the link between oil and democracy. These emerging democ-racies are in regions and cultures that some have argued to be infertilegrounds for democracy due to their inhospitable cultures to democraticnorms and values.26 Given the fact that these democracies have surfacedcontrary to the expectations of many, there is a need for a careful reassess-ment of how the link between natural resource wealth and the emergenceand sustenance of democracy is interrogated.

This study neither claims a final say in this debate nor is the first topropose a positive link between oil and democracy and the varying effects ofnatural resources on institution building. As Dunning (2008; see also Smith,2007) argues, the large body of literature on the relationship between naturalresources and democracy is not necessarily mutually inconsistent; resource

25See, for instance, Crystal (1989), Karl (1997), Smith (2007), and Dunning (2008).26See, for instance, Wiarda (1992) and Huntington (1984).



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wealth can promote or undermine democratization through providing differ-ent incentives under different socioeconomic structures. As such, consistentwith Przeworski and Limongi, (1997), Przeworski et al., (2000), and Colliers(1999) works, this study strengthens the proposition that the dynamics of

transition to and the survival of an incident of democratization are different.The rentier state theory and its corollaries have greatly enhanced our un-

derstanding of the natural resources-regime formation link. Its explanatorypower therefore should not be confined to the oil-democracy link. Moreover,the conceptualization and operationalization of democracy utilized in thisstudy differ from those employed by others. As such, the findings from thisstudy should not be taken as a confutation of the rentier state theory. As agrowing number of scholars has pointed out, however, there is a need toreassess the explanatory power of the theory in light of new evidence. This

study adds to the growing literature that oil-generated wealth can promotedemocracy through converting oil revenues into other forms of capital (Karl,1987; Crystal, 1989; Herb, 2005; Luciani, 2005, 2007; Gurses, 2009).

More importantly, and perhaps more germane to the argument proposedhere, it contributes to the emerging literature by bridging the elite theories ofdemocracy with the large-N cross-national econometric studies. Large rev-enues obtained from oil can have a different and positive impact on the risksof an authoritarian backlash by providing incentives for the upper classes toabide by the rules of the game, thereby stabilizing the regime.

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