Regime Shift: Economic Crises in Third Wave Democracies.

In the past decade, we have seen a proliferation of economic crises in the developing world. These crises have had disastrous effects on national economies as entire banking sectors collapse, currencies devalue, financial institutions recall loans, and on a human scale, millions fall below the poverty line. At different points in history, economic crises have led to democratic breakdown or to democratic transition. These periods corresponded roughly with Samuel Huntington’s “waves of democracy.” However, the literature has been quiet on the key issue of how economic crises affect regime change in third wave democracies. This is the question I address in my paper. I argue that while financial crises may engender regime change in authoritarian countries, in third wave democracies, economic crisis will not generate regime change but instead a regime shift. I define regime shift as a movement among alternatives within the democratic structure. For example, if the right is in power when an economic crisis hits and they fail to quickly remedy it, one may see left and far left parties winning seats in the next election. In order to test this hypothesis, I employed multivariate analysis using the most similar systems case study methodology. I chose the three cases of Turkey, Poland and the Philippines carefully to ensure sufficient variation among them both geographically and transitionally (i.e. whether their democratic transition was controlled from above vs. spurred from below). I believe this choice of cases is significant, for it refutes the argument that the regime shift phenomenon is region specific. In other words, there is great potential for generalization. The results of this study suggest that a robust correlation exists between economic crisis and regime shift. This analysis can strongly affirm two factors: first, there is no backshift. Third wave democracies are not collapsing in the wake of economic crises. Second and perhaps more telling, during economic crises, incumbent parties and candidates are typically rejected in favor of alternatives to the status quo. In Turkey, far right and Islamic parties made substantial gains during the three economic crises, becoming coalition partners and leaders. In Poland, the Solidarity party was defeated during each economic crisis in favor of the former communist SLD. In the Philippines, the presidential candidate from the establishment party, the LDP, was rejected in favor of the most anti-establishment candidate on the ticket. These findings will, I hope, make a contribution to the literatures on economic crises and democratic transitions. Most notably, it will show that the third wave democracies are not reverting back to authoritarianism when they hit rough periods. Instead, they are showing the first signs of democratic consolidation. In times of crisis, they are not calling for a reversion to the days of authoritarian rule. Rather, they are holding their leaders accountable for failing to rectify painful economic situations and choosing from the systemic alternatives available. This shows that they have faith in the democratic institutions of government to rectify their problems. For the third wave democracies, this finding is indeed promising. [ABSTRACT FROM AUTHOR]