_Summary:_ democracy prevails when either economic equality or capital mobility are high in a given country. On the one hand, economic equality promotes democracy. As the distribution of assets and income becomes more balanced among individuals, the redistributive impact of democracy diminishes and the probability of a peaceful transition from an authoritarian regime to universal suffrage increases. On the other hand, a decline in the specificity of capital (i.e., a reduction in the cost of moving capital away from its country of origin) curbs the redistributive pressures from non-capital holders. As capital becomes more mobile, democratic governments must curb taxes – if the taxes were too high, capital would escape abroad. Accordingly, the extent of political conflict among capital holders and nonholders diminishes, and the likelihood of democracy rises.
_Method:_ formal modeling (with predictions tested empirically in later chapters)
_Critique:_ state socialist systems are difficult to analyze in terms of contestation over private property and income, which remain central to Boix’s analysis.
*a democratic outcome becomes possible when the inequality of conditions among individuals, and therefore the intensity of redistributive demands, falls to the point that an authoritarian strategy to block redistribution ceases to be attractive to the well-off.
*the likelihood of democracy of democracy increases when the mobility of capital goes up, since taxes necessarily go down, making democracy cheaper than authoritarianism to the holders of assets.
*besides the distribution and nature of economic assets, the choice of political regime is affected by the political and organizational resources of the parties in contention. Thus, for example, as the poor become mobilized in the form of left-wing mass parties, the costs of repression increase for the rich.
**a change in the balance of power among political groups has different consequences depending on the underlying economic conditions:
**for low or medium levels of income inequality and asset specificity, the political strengthening of the lower classes speeds up the introduction of democracy.
by contrast, for high levels of inequality and asset specificity, where the costs of democratization are too high for the rich, the mobilization of the poor increases the likelihood of revolutionary explosions and civil wars.
*in addition to modeling this interaction purely as one between wealthy elite and a lower class, it can also be expanded to incorporate a middle class.
**here again, the growing equality of conditions among individuals as well as the mobility of capital precipitate the historical transitions from aristocratic or monarchical regimes to systems of limited democracy and, then, to universal suffrage. Still, this more complex model has two added benefits:
***first, it allows us to show how the triumph of universal suffrage required the strengthening and equalization of the working class vis-à-vis the other classes – in other words, it shows that the middle class rarely constitutes a ‘natural’ ally of the lower classes.
***second, it accommodates, in a rather straightforward manner, by varying the level of asset specificity across sectors, the phenomenon of cross-class coalitions (e.g. the rural-urban cleavage of several 19th century European countries) that cannot be easily explained if we use only a single dimension based on income distribution.
*the model matches the well-known finding that democracy is well correlated with per capita income while reconciling this correlation to the fact that authoritarianism prevails among the very wealthy set of oil producers.
**it provides an explanation for the higher rate of occurrence of democratic regimes in small countries and under particular configurations of the international system.
**it accounts for the distribution and wavelike pattern of revolutionary outbursts and regime shifts that have often occurred in the world in the last centuries – such as the revolutions of 1930 and 1848 in Europe, the collapse of the absolutist monarchies after WWI, the decolonization movement of the 1950s and 1960s, and the recent democratization wave of the late 20th century.