Do international rents bolster democratic backsliding under populist governments? Evidence from Latin America

Abstract

The political science literature often points to populism as the cause of democratic backsliding. The literature purports that populism undermines democracy's liberal component, meaning the horizontal checks and balances on executive power by legislatures and courts and the vertical checks and balances by civil society, such as a free press and social movements. Populists promote political polarization to build sustainable ruling coalitions during and between elections that legitimize and support the illiberal policies above. However, this debate often ignores the economic tools that populists in power possess, such as capturing direct and indirect international rents to finance clientelist mechanisms to co-opt political support. This paper contributes to the rich literature on how economic rent conditions the negative relationship between populism and liberalism by disaggregating the moderating effects of direct and indirect international rents through panel regression models in 18 Latin American countries from 1991 to 2019. I find that direct international rents, such as natural resource rents, moderated a deepening in processes of democratic backsliding. Contrastingly, indirect international rents, such as remittances, moderately mitigated democratic backsliding.