ECONOMY

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of manipulating future political power, and thus indirectly shaping future, as well as
present, economic institutions and outcomes.
We now show how, following Acemoglu and Robinson (2000, 2001, 2005), this
general framework can provide a theory of the origins of democracy.
3 ATheory of Democracy
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Democracy is a particular set of political institutions. Relative to some type of nondemocratic
regime the key aspect of democracy is that it is a situation of relative
political equality. 2 In a non-democracy some non-representative elite dominates the
political institutions and this elite will use their power to make collective choices and
economic institutions that benefit them. This elite is different in different countries.
For example, in present-day China it is the Chinese Communist Party. In Burundi
it is the Tutsi-dominated military. In nineteenth-century Britain it was the rich and
landed aristocracy. In a non-democracy the preferences of most people are not taken
into account in collective decision-making except to the extent that the disenfranchised
can exercise de facto power.
We can now consider how the framework we developed in the last section can
be applied more specifically to think about the origins of democracy. Consider the
simplest dynamic world we can imagine: there is a “today” and a “tomorrow,” and
the elite, who control non-democracy, and the citizens care about both policies and
economic institutions today and tomorrow. Suppose we are in a non-democratic
society, which generally looks after the interests of the elite, and the citizens have de
facto political power today. By this we mean that the disenfranchised have solved the
collective action problem and can threaten to impose costs on the elite and in the limit
depose it in a revolution. However, though the disenfranchised have de facto power
today they are unsure whether they will have the same political power tomorrow.
Given that we are in a non-democratic society, tomorrow the citizens may no longer
have the same political power. Can they ensure the implementation of the policies
and economic institutions they like both today and tomorrow?
Imagine now that the citizens do not simply use their de facto political power
today to obtain what they like now, but they also use it to change the political
system from non-democracy to democracy. If they do so, they will have effectively
increased their de jure political power in the future. Instead of non-democracy, we
are now in a democratic regime where there will be voting by all. With their increased
de jure political power, the citizens are therefore more likely to secure the economic
institutions and policies they like tomorrow as well.
² We do not distinguish between different non-democratic regimes (see Linz and Stepan 1996 for a
typology). The nature of a non-democratic regime may be important for specific comparative static
results but it does not alter the basic mechanisms that lead to the creation or consolidation of democracy
(see Acemoglu and Robinson 2005, ch.4).