In this chapter, we provide an overview of previous research on democracy. We depict some of the most salient “stylized facts” about democracy that have been emphasized and much debated in the literature. Because a reevaluation of the existing empirical evidence is not our main focus, we present these patterns diagrammatically without using formal econometric techniques. Although these patterns may not correspond to causal relationships, they are still informative about the correlates of democracy in the data, thus potentially informative about the type of models we should develop. In the final two sections we discuss the existing approaches to democracy and explain how our approach differs from and contributes to the existing literature.
The first challenge facing a quantitative analysis of the patterns of democracy is to develop reliable and informative measures. There has been much controversy over this issue in political science, mostly because there is disagreement about what actually constitutes a democracy. Many scholars, however, accept the definition proposed by Schumpeter (1942), who argued that democracy was
…the institutional arrangement for arriving at political decisions in which individuals acquire the power to decide by means of a competitive struggle for the people's vote. (p. 250)
In practice, then, democracy is associated with a particular set of institutions, such as free and fair elections, the accountability of politicians to the electorate, and free entry into politics.