Why Is Economic Policy Different In New Democracies? Affecting Attitudes About Democracy

When democracy is new, it is often fragile and not fully consolidated. The authors investigate how the danger of a collapse of democracy may affect fiscal policy in new democracies in comparison to countries where democracy is older and often more established. They argue that the attitude of the citizenry towards democracy is important in preventing democratic collapse, and expenditures may therefore be used to convince them that "Democracy works". They present a model focusing on the inference problem that citizens solve in forming their beliefs about the efficacy of democracy.