Game of Great Societies

How Does Democratic Competitiveness Influence Health and Education Expenditure?

Sidney Li Dhara Singh Darius Stewart

Introduction

Findings

Map of Democratic Competitiveness

This project examines the effect of democratic competitiveness on social expenditures in

education and public health. This study delves into the relationship between democratic regimes
and health and education expenditures, an extension of Evelyne Huber, Thomas Mustillo and
John D. Stephenss research on the effect of different regime types on social expenditures in
Latin America. Our research is also broadened by data from countries around the world instead
of just Latin America as in the Huber et al. study. We reason that parties in politically competitive
democracies must have greater appeal to the general public, namely the elderly and the poor
through social expenditure. Huber et al. found that authoritarian regimes spend more than
democracies on social security and social welfare. To further investigate their second finding that
democratic regimes spend more on education and health, this study will analyze what
characteristics of democracies produce this fiscal phenomenon.

DISCUSSION
The data show that democratic competitiveness increases government spending on health and
education. Our reasoning for these results is that when a democracy is more competitive, it is
harder for groups to get into power, so to win they need to appeal to the general public.
Voters want the people in power to govern in a way that directly benefits them, so they vote
for candidate(s) who(se) changes help them. Since the countries we examined are developing
countries or had a strong history of government involvement, social expenditures are
politically important. For parties to appeal to their constituencies in the more competitive
systems, they must focus on increasing government spending on social services, particularly
health and education.
PREDICTIONS

Hypothesis: The more competitive a democracy is, the higher the levels of
education and public health spending.

Mean of Polity quality

of democracy with 1
Standard Deviation

Mean of political
competiveness with 1
Standard Deviation

Education

4.75

5.27

Public Health

1.40

1.50

Variables
Independent Variable

Political Competitiveness
Dependent Variables

Education Spending (% GDP)

Public Health Spending (% GDP)
Control Variables

GDP per capita growth

Economic Competitiveness
Literacy
Urbanization
Quality of democracy
Social development
Senior population
National Debt

Research Methodology

This map shows the political competitiveness of all of the countries that were studied. It is
measured using the scale that was created for this project, which measures political culture,
number of effective political parties and the political participation.

Political Competitiveness and the Polity IV

Political Competitiveness vs. Education Spending

Quality of Democracy vs. Education Spending

We ensured that our countries came from a wide range of economic and social conditions,
including both OECD members, developing countries, and former colonies. We chose to
measure democratic competitiveness (our independent variable) by creating our own index based
on a sum of three indices. Two of these were the Economist Intelligence Units political culture
and political participation indices, which measured the interactions between parties, the
government, and the citizenry. Our third aggregated index was the inverse of the Database of
Political Institutions (DPI) Herfindahl index, measuring the effective number of opposition
parties. During regression analysis, we used multicollinearity among variables to narrow our
controls. No significant heteroskedasticity was detected.

This chart shows the predicted value for both dependent variables when the Polity quality of
democracy and political competiveness are both moved one standard deviation above their
mean. Political competiveness has a much greater impact on both dependent variables values
than the Polity quality of democracy does. We can observe a larger impact of political
competitiveness on education than public health.

Conclusion
Our study supports the hypothesis that political competitiveness is a strong determinant in
the amount a country spends on social expenditures, such as health care and education.
Although our results were consistent with our hypothesis, there are a few things that could
have been done to strengthen our experiment. The Gini coefficients (a measure of income
inequality) could have been a control that affected our results, but we were unable to find
enough data to test this intuition. We also only looked at K-12 graduation rates, but college
graduation rates may have had a greater impact, because college students would likely have
the right to vote. Also, our results could be strengthened by an alternative measure to the
quality of democracy other than the Polity IV index, which has very little annual variance.

Study Relevance and Further Research

Multivariate Regression Results

Political Competiveness vs. Public Health Spending

Quality of Democracy vs. Public Health Spending

This study offers important lessons for democratic regimes, illustrating how competitive party
systems can forge stronger foundations for upward mobility. Also, it indicates that the people
have greater influence over political decisions in competitive democracies. Further research in
this area should focus on the following factors:
Measure the effect that the competitiveness of a democracy has on social security and
social welfare spending
Examine how the age of a democratic regime affects social spending
Test how different forms of democracy affect social spending
Incorporate statistically significant measures of poverty, economic strength, and fiscal
capability as controls

Bibliography
These graphs plot political competitiveness against the two dependent variables and the Polity quality of democracy
against the two dependent variables. The larger regression coefficients in the political competitiveness graphs
indicate a stronger relationship between political competitiveness and the variables. Political competitiveness is thus
a better indicator of health and education spending than level of democracy.

Huber, E., Mustillo, T., & Stephens, J. D. (2008, April). Politics and social spending in Latin
America. The Journal of Politics.