The Economic Consequences of Democratic Backsliding: Evidence from U.S. States

Vanessa Boese-Schlosser, Rodolphe Desbordes, Markus Eberhardt and Mario Larch

No 20874, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Recent research has demonstrated that U.S. states are bellwethers of national institutional decline, acting as 'laboratories of autocratisation' through voter repression and gerrymandering. We provide first evidence for the economic consequences of sub-national democratic backsliding in the United States. We find that backsliding episodes during 2000-2023 do not systematically lead to lower per capita income but do cause an increase in income inequality and the impoverished. Innovation efforts (business R&D expenditure) and outputs (patenting) contract substantially, undermining the endogenous growth engine of the economy. International exports are unaffected, suggesting that foreign accountability operates through national-level institutions rather than sub-national ones.

JEL-codes: C23 F13 F14 P16 (search for similar items in EconPapers)
Date: 2025-11
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