Editorials: Free and fair elections attract investment, no matter who’s elected. Here’s why. | Mike Touchton/The Washington Post
If developing countries want to be prosperous and attract international investment, they should hold free and fair elections. That’s the takeaway from my analysis of data on elections and net investment flows in 157 countries between 1990 and 2013, which I presented in a recent paper in International Interactions. Over the past years, illiberal democracy has been spreading across the developing world. By “illiberal democracy” I mean countries like Venezuela, Argentina, and Hungary, which hold elections but curtail civil liberties, where constitutions limit power in theory but where in practice the rule of law is flexible at best, and no one holds leaders to account. For them, it may be useful to know that simply holding free and fair elections makes a big difference in attracting investment, whether a right- or left-leaning party wins the election or whether the country has a broader commitment to political rights. Let’s look at why.