Economic Crisis and Regime Transitions from Within

Abstract

We study how economic crises affect the likelihood of regime change brought about, in part or fully, by actors in the incumbent regime. While historically common, such processes remain far less studied than regime transitions forced by non-incumbent actors, such as coups or revolutions. We argue that economic crises may incentivize leaders to change the regime “from within” due to two different mechanisms, which we detail and illustrate with two cases. First, crises create “windows of opportunity” for leaders to change the regime in a direction they inherently prefer. Democratically elected leaders who use crises to conduct self-coups is one example. Second, economic crises sometimes allow for opposition actors to mobilize and threaten the regime with breakdown. In such circumstances, incumbents may prefer to change the regime from within to appease opponents in anticipation of even worse outcomes. We leverage new data on the timing and mode of regime change for more than 2000 regimes from about 200 countries, across 1789–2018, and find support for the hypothesis that economic crises induce transitions from within. However, when we distinguish incumbent-guided liberalization episodes from other guided transitions, including self-coups, we only find that economic crises systematically relate to the latter.