Matthew A. Baum

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The Invisible Hand of Democracy: Political Control and the Provision of Public Services (with David Lake)

Attention has recently focused on the distinctive foreign policies of democracies. We examine the domestic policy consequences of democracy. Building upon a model of the state as a monopoly provider of public services, we hypothesize that democratic states will seek fewer monopoly rents and produce a higher level of public services than autocracies. We also hypothesize that changes in regime type will produce fairly rapid and disproportionate effects on the level of public service provision. We test these hypotheses both cross-sectionally and over time for a variety of public service indicators. The statistical results strongly support our expectations. Democracies indeed provide significantly higher levels of public services, substantial changes in regime type appear to produce disproportionately large effects on public service provision, and the lag between changes in the level of democracy and in the level of public goods appears quite short, suggesting that periods of "democratic transition" may be more rapid than commonly supposed.

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