CSIR Research Report

Research Report: After Transition

The Primacy of Governance Infrastructure in Preventing
Democratic Failure in New and Fragile Democracies
Ryan G. Baird, Ph.D.

December 2015

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 CSIR Research Report

After Transition: The Primacy of Governance

Infrastructure in Preventing Democratic Failure in
New and Fragile Democracies

Ryan G. Baird, Ph.D.

Joint Warfare Analysis Center

December 2015

Dr. Baird is a political scientist at the Department of Defense. This research report is the product of inde-
pendent scholarly investigation and is not finished intelligence. The opinions expressed in this report are
solely the author’s and are not those of the National Intelligence University, Defense Intelligence Agency,
or Department of Defense. An expanded discussion of these findings is available upon request to:
NIU_Research@dodiis.mil. This report has been approved for unrestricted distribution by the Office of
Corporate Communications, Defense Intelligence Agency, case #16-293.

On the cover: CAIRO, EGYPT: Egyptians protesting in El-Etehadeya district during "June 30"
protests against Mohamed Morsi. July 1, 2013. Photo by George Nazmi Bebawi.

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ATTARD, MALTA:
An unidentified Libyan
anti-Gaddafi protester
delivers a message
during a protest
in front of the
Libyan Embassy on
February 22, 2011.
By McCarthy’s
Photoworks.

Introduction. Regime transition is one of the most fraught times in a country’s existence.
Scholarship and real world observation demonstrate that anocracies, (mixed regimes that are
neither strongly democratic nor autocratic), cause, allow, or facilitate much of the conflict and
terrorism in the world today. This research report summarizes strong evidence that the quality
level of the basic domestic institutions of the state, captured in the concept of governance
infrastructure (GI), are key for preventing new and fragile democratic states from failing. In fact,
this investigation found that for the years 1984 to 2010, if a state had a quality level of GI one
standard deviation above the average quality of all states in the international system, they will
not experience a democratic breakdown. The investigation also shows that for this time period,
18 of 22 states that experienced democratic failure were below the mean quality level of GI. So, if
a state reaches the mean quality level of GI or higher and it is a democracy, the state in question is
extremely unlikely to fail democratically.

Though autocracies and mixed regimes represent some of the largest sources of conflict in the
world,1 this investigation focuses on democratic failure for two reasons: 1) While mixed regimes
tend to be quite conflictual, there is evidence that autocracies cause just as much conflict,
meaning there is less, if any, incentive in preventing an autocracy from becoming a mixed
regime;2 2) It is the implicit policy of the United States to promote democracy. 3 After some initial
hesitation to fully back the democracy promotion agendas of former Presidents Reagan, G.W.
Bush, and Clinton, President Obama declared in 2010 to the U.N. General Assembly that “There
is no right more fundamental than the ability to choose your leaders and determine your
destiny.”4

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Given the focus of the United States on democratic promotion, as well as the potential danger
mixed regimes present to the international community, it is important to understand how to
achieve successful and enduring transition to democracy. As such, this research posits that the
quality level of the “core domestic institutions that facilitate government competency and economic
efficiency,” (governance infrastructure) is the key to preventing democratic regression or failure. 5

“
There are many examples of new and fragile democracies with great hope for progress that
either immediately regressed due to coup d’état (Egypt) or slowly regressed while a leader
consolidated power (Russia). Moreover, mixed regimes are highly unpredictable, accounting for
their conflictual tendencies. It is a sobering consideration that a state with nuclear weapons (such
It is unwise to
as Pakistan) could fail democratically.6 Finally, as the Iraq and Libya cases demonstrate, it is
unwise to support transition to democracy from a relatively stable autocracy when conditions support transition
prevent successful transition.
to democracy from
Therefore, understanding, predicting, and preventing weak and fragile democracies from a relatively stable
regressing to mixed regimes is clearly important to all combatant commands that have these
types of states within their areas of responsibility. This understanding is equally as important for autocracy when
IC analysts charged with anticipating state instability and its effects, the very focus of this conditions prevent
research.
successful

”
A Causal Pathway from Governance Infrastructure to transition.
Preventing Democratic Failure. The hypothesis at the core of this research is
that a high enough quality of governance infrastructure should insulate a new or fragile
democracy from failing; but what is the causal mechanism that drives this proposed
relationship? When a state transitions to a democracy, that state and its citizens agree on an
implicit social contract. This contract promises that when a state adopts a democratic form of
government, its citizens’ lives will be better off. A state typically accomplishes this by improving
public goods, limiting extreme patronage (corruption), preventing economic crises, and
facilitating economic development. The institutions that comprise governance infrastructure
have consistently been shown to lead to the improvement of economic outcomes, public goods
quality, and human development.7

Three of the most common reasons for democratic failure are military coup d’état, lack of
government legitimacy, and apathy by the polis, which allows an autocrat to consolidate power
(as seen in Russia).8 When the social contract of a better life under democracy is not satisfied,
democracy and a democratic government lose legitimacy. 9 This lack of legitimacy not only
allows for power consolidation, but it also emboldens a military to stage a coup, making it
harder to maintain order in general.10

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BARCELONA, SPAIN:
Various anarchist and
communist groups
organized an
anti-capitalism
demonstration as
thousands celebrated
the annual May Day
with a march,
May 1st, 2012.
By Matthi.

An example of the success or failure of the social contract that is implied when transitioning to a
democracy is evident when you compare Finland and Estonia during the interwar period. Both
new democratic governments faced pressure from groups looking to upend the new
democracies, and in both cases these groups (Anti-Communist Movement and Veterans Groups,
respectively), were supported by one of the largest constituent groups in each country, the
agrarians/farmers in Finland and the middle class in Estonia. The difference was that while the
farmers supported the Anti-Communist Movement overall, they felt their government had
legitimacy because it supported their push for debt restructuring and made their lives better—
satisfying the implied social contract—and did not support the movement’s attempted uprising.
Without that support, the uprising failed and democracy remained intact. However, in Estonia,
the middle class strongly supported the Veterans Group, as they did not feel the government had
legitimacy. This allowed the head of the existing cabinet to solidify power and create an
authoritarian government. The public was apathetic to this change as the previous government
had not improved their lives, thereby failing to satisfy the implied social contract of democracy. 11

A specific quality level of governance infrastructure is necessary to prevent this failure and
facilitate the successful implementation of the social contract that goes along with democratic
transition—GI is truly a primary component for democratic survival.

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Measuring Governance Infrastructure:

Figure 1
A New Historical Dataset. This research
defines and conceptualizes governance infrastructure as
being composed of four core domestic institutions that are
separate from regime type, but necessary for any regime
type to function: 1) bureaucratic quality, 2) regulatory
quality, 3) control of corruption (both local and political),
4) rule of law.12 Governance Infrastructure is a new
continuous measure that uses expert surveys of state
institutional quality for the years 1984 to 2013. The new
dataset averages approximately 162 country observations
per year. The statistical summary of the measure can be
seen in Table 1.

Governance infrastructure is a latent variable, and its

quality is measured by aggregating the quality level of the
four core institutions described above. 13 Its minimum and
maximum is defined by the minimum and maximum of Figure 2
the survey data used to capture the quality of its
constituent institutions. A lower measure indicates poor
quality governance infrastructure, while a higher measure
indicates the opposite.

To examine the soundness of this new measure, countries

were ranked from best to worst quality in terms of GI. The
25 best and worst scoring countries on the GI index in
2011 are shown in Figures 1 and 3, respectively. As one
would expect, the best scoring countries are either
members of the Organization for Economic Co-operation
and Development, rich, or micro-nations. Additionally,
the 25 worst countries in terms of GI include countries
such as Somalia, North Korea, Turkmenistan,
Afghanistan, and Myanmar—all of which would be
expected to score extremely poorly in institutional quality
during this time period.

Table 1—Summary Statistics for GI: 1980 to 2013

Variable # of Observations Mean Standard Deviation Minimum Maximum

Governance Infrastructure 4,838 -0.116 0.924 -3.530 2.477

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Figure 3
It is also important to note that over the time period that
the new measure of governance infrastructure overlaps
with an aggregate measure of the World Bank’s
governance measure (1996 to 2013), the new index of GI
correlates 90 percent with the aggregate measure of GI
using the World Bank’s data.14 At first glance, this may
appear to render this new GI measure redundant.
However, when compared to Figures 2 and 4, the top and
bottom 25 countries of the respective measures have
significant differences not only in rank ordering, but also
in the size of the gap of institutional quality between
states. This gap is likely due to World Bank analysts’
choice of algorithm. Their model does not account for bias
or error in evaluating the specific quality of states’
institutions by the experts surveyed, as evidenced by the
fact that the correlation drops to 86 percent when
Figure 4 examining developing countries only. The institutional
quality of these countries is harder to know, leading to
error, and yet these are the countries that are most
important to this research, as developed countries tend to
be more stable.

The dataset used in this research reflects more variation in

institutional quality among states, as one would expect. 15
The use of a more sophisticated algorithm and a broader
dataset results in a more appropriate measure of
governance with which to examine whether the quality of
a state’s GI is a key determinant in its survival as a
democracy.

{ “...there is no state that experi-

ences democratic failure if the
state is one standard deviation
or greater above the mean.” }
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The Relationship between Governance Infrastructure and

Democratic Failure. The first examination of the relationship between GI and
democratic failure immediately demonstrates that there is no state that e xp eriences d em o cratic
failure if the state is one standard deviation or greater above the mean. 16 This is shown in Table 2, were
governance infrastructure has been rescaled to an ordinal variable, -1 equals everything less than
or equal to one standard deviation below the mean, 1 equals everything greater than or equal to
one standard deviation above the mean, and everything in the middle is equal to 0.

Table 2 provides good initial evidence that governance infrastructure as posited is a key
component in preventing democratic failure. Next, the GI measure is transformed to simply 1 or
0, where 1 is equal to the mean of GI and everything greater, and 0 is everything below the mean.
This is used to determine if the mean of governance infrastructure is a high enough threshold of
institutional quality to insulate democracies from failing. When this more stringent analysis of
the hypothesized relationship is applied, as evidenced in Table 3, there are only 4 cases where a
state with a mean or above quality level of governance infrastructure experiences democratic
failure.
Table 2—Years Covered 1984–201017
Democratic Failure
Ordinal Governance Infrastructure -1 0 Total
-1 6 89 95
0 16 1,425 1,441
1 0 593 593
Total 22 2,107 2,129

Table 3—Years Covered 1984–2010

Democratic Failure

Ordinal Governance Infrastructure -1 0 Total

0 18 824 842
1 4 1,283 1,287
Total 22 2,107 2,129

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Despite this harder test of the posited relationship, in 18 of 22 cases where a state experiences
democratic failure, 82 p ercent o f the tim e, that state’s GI is belo w the m ean, underscoring the
observation that being below the mean of governance infrastructure is almost always a necessary
condition for the failure of a democratic government. 18 Moreover, of these four failed
democracies not below the mean, Sri Lanka has the highest GI quality level of .264, which is not
much higher than the mean, and significantly lower than one standard deviation above the
mean. Over the observational 30-year period, the evidence suggests that if a state has a GI
quality level of half a standard deviation above the mean, Figure 5
its democratic transition is likely to be successful. In fact,
looking at Tables 2 and 3, it should not have been
surprising that democracy failed so quickly in Egypt after
Morsi’s election in 2012. Egypt’s governance infrastruc-
ture score was below the mean at -0.22, they did not
improve citizen’s lives economically, gained no
legitimacy, and were quickly ousted by the military. 19

The final analysis of the relationship between GI and

democratic failure is an econometric model that analyzes
GI’s substantive impact on democratic failure and
determines if the impact is statistically significant, all
while controlling for existing common variables that
predict democratic survival—the findings are equally
strong. The aforementioned variables are: 1) ethnic
fractionalization, 2) length of existence of the current type
of government, 3) degree of fractionalization in the government, 4) ratio of democracies in the
world, and 5) total number of democracies in the world. The results of the model show that
increasing the quality of states’ governance infrastructure by one unit (a little over one standard
deviation) decreases the odds of democratic failure by approximately 87 percent. 20 The effect of
GI on the odds of democratic failure are demonstrated to an even greater degree when graphed,
as shown in Figure 6. The o d d s o f d em o cratic failure are sharp ly red uced by o ve r 80 p ercent as
the GI level approaches the mean. These models provide strong preliminary evidence that the states’ GI
quality level is indeed a, if not the, primary component in ensuring that countries that are transitioning to
a democratic regime are successful.

{ }
“...being below the mean of
governance infrastructure is
almost always a necessary
condition for the failure of a
democratic government.”

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Implications and Future Research. This research has created the most sound
and historically complete measure of governance infrastructure to examine the relationship
between governance infrastructure and democratic survival. The results of the preceding models
find that states’ GI quality level is, at least, a key determinant of democratic survival and, very
likely, a necessary condition in preventing democratic failure. Without a high enough quality of
governance infrastructure, new and fragile democracies are unable to satisfy that implied social
contract (that citizen’s lives are better under democracy) due to lack of economic and human
development and the provision of public goods. This causes these governments to lack
legitimacy, leading to democratic failure.

The statistical results are supported even further when considering the comparison of Estonia
and Finland during the interwar years, as well as other countries such as Russia, Thailand,
Bangladesh, Pakistan, and Zambia. All are examples of countries that had poor GI quality,
transitioned to democracy, and then promptly regressed or failed. Niger, another example, had
very poor quality GI in the early 90s. When the country transitioned to democracy, the citizens’
lives did not improve, which resulted in the democratic government failing to develop any
legitimacy, and a military coup in 1996.

Future research should fully explore more complex models of the impact of GI on democratic
transition. For example, are all the institutions that comprise GI equally important? If they are,
does the timing of how they are implemented matter? Finally, with further modeling and case-
study analysis, a specific threshold of GI quality and a predictive model should be developed for
anticipating democratic failure of potentially transitioning states or existing fragile democracies.

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Notes.

1Marta Reynal-Querol, “Ethnicity, Political Systems, and Civil Wars,” Journal of Conflict Resolution (2002);
Nicholas Sambanis, “What is Civil War? Conceptual and Empirical Complexities of an Operational
Definition,” Journal of Conflict Resolution (2004); Henrik Urdal, “People vs. Malthus: Population Pressure,
Environmental Degradation, and Armed Conflict Revisited,” Journal of Peace Research (2005); Patrick
Regan and Daniel Norton, “Greed, Grievance, and Mobilization in Civil Wars,” Journal of Conflict Research
(2005).
2Arthur A. Goldsmith, “Mixed Regimes and Political Violence in Africa,” The Journal of Mod ern Africa
Studies (2010).
3Mark Lagon, “Promoting Democracy: The Whys and Hows for the United States and the International
Community,” Council on Fore ign Relations (2011). http://www.cfr.org/democratization/promoting-
democracy-whys-hows-united-states-international-community/p24090
4 Ibid.
5Ryan G. Baird, “Unpacking Democracy and Governance: Conceptualizing Governance Infrastructure,”
Social Science Information (2012).
6Editorial Board, “The Pakistan Nuclear Nightmare,” The New York Tim es, November 7, 2015, http://
www.nytimes.com/2015/11/08/opinion/sunday/the-pakistan-nuclear-nightmare.html; In fact, Pakistan is on
pace to become the third ranked nuclear power within the decade.
7 Stephen Knack and Philip Keefer, “Institutions and Economic Performance: Cross-Country Tests Using
Alternative Institutional Measures,” Econom ics and Politics (1995); Daniel Kaufmann, Aart Kraay, and
Pablo Zoido-Lobaton, “Governance Matters,” The Policy Research Work ing Paper Series, The World Bank
(1999); Valerie Bunce, “Comparative Democratization: Big and Bounded Generalizations,” Com parative
Political Studies (2000); Stephan Haggard, Andrew MacIntyre, and Lydia Tiede, “The Rule of Law and Economic
Development,” Am erican Review of Political Science (2008); Adam Przeworksi, “Democracy and Economic
Development,” in Edward D. Mansfield and Richard Sisson, eds., The Evolution of Political Know led ge,
(Columbus: Ohio State University Press, 2004); Ryan G. Baird, “The Primacy of Governance Infrastructure
vs. Democracy in Economic Development, Trade and FDI,” (dissertation, University of Arizona, 2010); Dan
Slate, Gautam Nair, and Benjamin Smith, “Economic Origins of Democratic Breakdown? The Redistributive
Model and the Postcolonial State,” Perspectives on Politics (2014).
8Thomas D. Jeitschko, Susan J. Linz, Jose Noguera, and Anastasia Semykina, “Economic Security and
Freedom: Why Some Democracies Survive and Others Fail (2008).
9 Christopher Reenock, Jeffrey K. Staton, and Marius Radean, “Legal Institutions and Democratic Order,”
Journal of Politics (2014).

Ko Maeda, “Two Modes of Democratic Breakdown: A Competing Risks Analysis of Democratic

10

Durability,” Journal of Politics (2010).

11Alan Siaroff, “Democratic Breakdown and Democratic Stability: A Comparison of Interwar Estonia and
Finland,” Canadian Journal of Politics (1999).
12See Baird (2012) for a detailed discussion of why these core institutions comprise governance
infrastructure and how GI differs from regime type.

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13 An item response theory (IRT) model for continuous responses was implemented to aggregate these
expert institutional assessments. More specifically, the Samejima’s Continuous Response Model was used.
Item response models were originally developed in education to account for the latent ability of individuals
taking a test. Political scientists and economists have used these models to measure democratic tendencies,
political ideology, political-economic risk, and the policy preferences of government agencies. Our index
treats Governance Infrastructure (GI) as a latent predictor of the basic institutional quality of a state. This is
accomplished because the models describe how observed responses (originally answers to test questions)
and expert opinion in our usage correspond to the aforementioned latent dimension.
14This measure was created by taking the mean of the World Bank’s measures of the four core institutions
described earlier. This follows Baird (2012) conceptualization.
15There are many more validity checks that need to be conducted, but this is a good first step for checking
the face validity of the new measure.
16The sample is limited to countries that were democracies in the prior year, as they are the only ones that
had the potential to fail democratically. This is done for the rest of the analyses as well.
17While the new measure of governance infrastructure covers years to 2013, the best measure of democratic
failure only covers the years through 2010.
18 Charles Ragin, Fuzzy-Set Social Science (Chicago: University of Chicago Press, 2000).
19Kermal Davis, “Good Governance and Economic Performance,” Project Synd icate, http://www.project-
syndicate.org/commentary/kemal-dervi--searches-beyond-specific-policies-for-the-roots-of-sustained-
growth.
20Table 4: Logistic Regression: Estimating Democratic Failure—1984 to 2010. All countries that were a
democracy in the prior year are included in the sample.

Results in Table 4 are presented in log-odds and are transformed by exponentiation to get the odds ration
reported in the text. The population of this model is all states that were a democracy in the prior year of
observation. This controls for only states that have the possibility of democratic failure so as not to
artificially deflate standard errors due the law of large numbers. Boix et al. (2013) measure of democratic
failure was used as the dependent variable. The other control variables come from the “International
Political Economy Data Resource” put together by Benjamin Graham (2015), https://dataverse.harvard.edu/
dataset.xhtml?persistentId=doi:10.7910/DVN/28003. Several other models with different measures of
democratic failure were run and the results were very similar and statistically significant for governance
infrastructure. The other measures were derived from the PolityIV dataset, http://www.systemicpeace.org/
inscr/p4manualv2012.pdf, and the Geddes, Wright, and Frantz Regime Type data-set, http://sites.psu.edu/
dictators/wp-content/uploads/sites/12570/2014/06/GWF-Codebook.pdf.

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