Caucasus Research Resource Center (CRRC) – Armenia

This research has been implemented in the scope of CRRC-Armenia Research

Fellowship Program, financed by the Carnegie Corporation of New York.
________________________________________________
Grants to Support Social Science and
Policy- Oriented Research # R03

INDEX OF DEMOCRACY LEVEL (IDL): DISCOVERING

FACTORS THAT INFLUENCE DEMOCRACY IN
ARMENIA
By

Arusyak Aleksanyan

Yerevan – 2013

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 TABLE OF CONTENTS

ABSTRACT ................................................................................................................................ 3

1. INTRODUCTION .................................................................................................................. 3

2. DEMOCRACY: DEFENITIONS, FACTORS AND THEORETICAL EXPLANATIONS ...... 5

3. DEMOCRACY INDICIES ..................................................................................................... 8

4. METHODOLOGY................................................................................................................ 16

5. INDICES AND TREND OF ARMENIAN DEMOCRATIZATION ...................................... 26

6. FACTORS THAT INFLUENCE DEMOCRACY IN ARMENIA: ANALYSIS AND

DISCUSSION .......................................................................................................................... 29

7. CONCLUSION AND RECOMENDATIONS ....................................................................... 35

REFERENCES .......................................................................................................................... 38

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ABSTRACT
Recent democratic developments worldwide have necessitated application of tools in
order to evaluate compare and explain democratization processes across countries and over
the time. Modeling is one of the most effective methods applied in the analysis of political
and socio-economic processes and aimed at solution of complex issues arising in the field.
Current study introduces a new model for the assessment of democracy (Index of Democracy
Level-IDL) based on the method of index construction. This approach allows to analyze the
levels of democracy in a given country within its various periods of development and to
compare different countries by their level of democracy via application of an integrated
numerical factor of democracy (index). The paper focuses on the evolution of Armenian
democracy in the time span between 1998 and 2012 – a period of its modeling and
estimation. The key factors influencing democracy in Armenia are determined through
simple regression analysis with the aim to tackle preconditions for the development of
democracy in the country.

1.INTRODUCTION

What are the preconditions for democracy? And which particular factors are highly

correlated with democracy?

Since 1980 there has been an increased academic interest in the factors that promote

democracy and means for measuring democracy. Such heightened interest owes it to the new

tendencies in democratization of states which have instigated researchers to reconsider their

methodological and theoretical approaches. Nowadays there is a greater demand for measuring

democracy even beyond academic circles. It determines international image of the country and

affects the scope of foreign investments.

There are many different indices of democracy developed by various schools of thought,

however most of them suggest biased approach to democratic systems. Therefore in the proposed

3
model I will consider several aspects of democracy based on their influencing factors and

conditions for democracy. The comparative studies of conditions for democracy are based on

general theoretical hypotheses that determine democracy by economic development, social,

educational, cultural, religion, international and other factors and spheres.

Lipset (1959, 1969, 154) examined the preconditions for democracy from the standpoint

of correlativity but not causality. Socio-economic factors (welfare, urbanization,

industrialization, education e.t.c.) emphasized by Lipset, were perceived as preconditions for

promoting democracy rather than requiring its foundation. Therefore if trying to summarize

theoretical approaches and empirical research outcomes it may be concluded that democracy is a

socio-political system of relations based on the development of society and its economic, social,

cultural and other conditions. Following this definition of democracy the selection of indicators

was not merely limited to one leading factor but it also included a set of conditions for the

promotion and development of democracy. It is my belief that all considered conditions are

certainly important for the development of democracy, however they vary in the degree of

importance in each country case. While modeling and researching democracy in the observed

country, the regression analysis will be applied to discover its most fundamental factors.

The proposed model allows to:

• acquire four subindices (political, economic, social, education and health) in order to

assess and compare the state progress in each field,

• implement in-country analysis, while assessing the dynamics of democratization in a

country during any period of time,

• conduct a cross-country analysis, compare and classify countries by the level of

democracy according to the scale from 0 to 1,

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 • reveal the most influential factors of democratization of a country.

2. DEMOCRACY: DEFENITIONS, FACTORS AND THEORETICAL EXPLANATIONS

The term “democracy” stems from the ancient Greek word δημοκρατία (dēmokratiā),

which combines two words: dēmos that is, “people”, and kratos, meaning “rule”, “power” or

“strength”. In the 5th century BCE it denoted the political systems that functioned in Greek city-

states. Put together, the literal denotation of the Greek word democracy is “rule by the people”,

and it culminates in a popular form of government.

There is a bulk of academic literature expounding a plurality of theories and definitions

of democracy. When exploring and measuring democracy the scholars have emphasized different

conditions, factors and developments affecting democracy. Modernizationalists, like Seymour

Lipset, argue that the economic growth and well-being lead to democracy. In his article Seymour

Lipset (1959, 80) claims that “…the factors of industrialization, urbanization, wealth, and

education, are so closely interrelated as to form one common factor. And the factors subsumed

under economic development carry with it the political correlate of democracy”. Robert Dahl

(1985) also highlights the interdependence between economic prosperity and democracy.

According to him democracy does not requirethe abundance or standards of material well-being

prevailing in most modern industrialized countries. Instead, the democracy abides sense of

relative economic prosperity, justice and chance for success.According to Barro (1999, 160)

“...increases in various measures of the standard of living forecast a gradual rise in democracy. In

contrast, democracies that arise without prior economic development — sometimes because they

are imposed by former colonial powers or international organizations — tend not to last.” The

hypothesis that economic growth and well-being lead to democracy reverberates in all major

5
works on democracy. Lipset (1959, 75) notes that “only in a wealthy society in which relatively

few citizens lived in real poverty could a situation exist in which the mass of the population

could intelligently participate in politics and could develop the self-restraint necessary to avoid

succumbing to the appeals of irresponsible demagogues.” Samuel Huntington (1968) predicts

that the outcomes of economic development can lead to political decay; thereafter, provoked by

instability, political systems would normally move toward democracy through

institutionalization. On one hand, scholars like Joseph Siegle, Michael Weinstein, and Morton

Halperin (Siegle et al, 2004) argue that democracies consistently outpace non-democracies on

most indicators of economic and social well-being. Therefore, it is recommended to promote

democracy prior to focusing on economic and social developments in third world countries. On

the other hand, theorists like Cassinelli (1961) claim that a modern democratic state can exist

only in a society in which the problems of material well being are solved. Finally, as Wejnert

(2005) suggests, when considering democracy the diffusion factors are more important than the

social-economic.

Actually, with the beginning of the third wave of democratization, the research studies

have focused more on other significant aspects of democracy. For example, Huntington (1991),

when examining the obstacles and opportunities for further democratization, divides them into

three broad categories: political, cultural and economic. Among these three, the cultural aspect

calls for two claims: 1) only the western culture provides the appropriate base for the

development of democratic institutions and, therefore democracy is not suitable for non-Western

societies; 2) some cultures are intrinsically incompatible with democracy, for instance, those

promoting Confucianism and Islam.

6
 Other scholars (Moon, et al 2006, 4) use statistical evidence on democratic persistence,

basic needs fulfillment, and gender equality, to demonstrate that “no measure of democracy can

be considered an accurate representation of its basic character without directly including

participation as a core component.'' Moreover, TatuVanhanen (1984, 1989, 1997) suggests to

consider the issue at two levels: competition level and participation level.

Michael J. Sodaro (2004, 207-220) proposes ten conditions for democracy: 1)state

institutions, 2)elites committed to democracy, 3) homogeneous society, 4)national wealth,

5)private enterprise, 6)middle class, 7) support of the disadvantaged for democracy, 8)citizen

participation, civil society, and democratic political culture, 9) education and freedom of

information, 10) favorable international environment.

O’Donnell (2004), Warren (2006) and Rose (2009) claim that the state failure to enforce

the rule of law and control over corruption are the major determinants of effective or ineffective

democracies. Marc Bühlmann (Bühlmann et al., 2008, 15) defines freedom, equality and control

as three core principles of democracy.

Summarizing main study findings on democracy, Rustow (1970, 337-338) notes that

democratization could be explained by three core analytical accounts. The first approach

proposed by Seymour Lipset, Philips Cutright, and others, ''connects stable democracy with

certain economic and social background conditions, such as high per capita income, widespread

literacy, and prevalent urban residence.'' The second account concentrates on “the need for

certain beliefs or psychological attitudes among citizens.” Political culture specialists Daniel

Lerner, Gabriel Almond and Sidney Verba, claim that civil culture and willingness to participate

in public affairs are imperative for establishing democracy. Finally, the third approach put

7
forward by ArendLijphart, Ralf Dahrendorf, Robert Dahl, Harry Eckstein and others, looks into

the characteristic features of social and political structure.

In contrast, American political scientists Terry Lynn Karl and Philippe

C. Schmitter (1991) take a different standpoint when analyzing the transition from authoritarian

regimes to democracy in Latin America, Southern and Eastern Europe. They hypothesize that

perhaps there is no precondition or a set of preconditions required for the emergence of

democracy. So far the attempts to derive the causes of democratic transition from economic,

social, cultural, psychological and international factors haven’t been successful in generating a

universal law of democratization. Based on this hypothesis, the researchers recommendto refrain

from defining any general and identical conditions that would explain the presence or absence of

democratic regimes. Those criteria previously considered as preconditions for democracy, can be

equally interpreted as the consequences of formation of different types of democracy. Such

criteria as economic growth, equitable distribution of income, the growth of literacy and

education, the development of communications and the media can be regarded as derivatives of

stable democratic processes, but not necessary conditions for their existence.

3. DEMOCRACY INDICIES

At present there are more than a dozen of different indices covering various aspects of

democracy. The history of measuring democracy emerges in the 1960s and progresses due to

pursuit after improved measuring techniques and quest for new adjusted scales. Within these

frames, some scholars suggest indices that stress the formal or institutional feature of democracy

(e.g. Cutright’s political development index), others (Bollen, Dahl, Vanhanen, Neubauer)

emphasize the procedural aspect of democracy and the third ones develop indices (Civil Liberties

8
and Political Rights of Freedom House) that would allow to measure the level of implementation

of declared rights.

Cutright’s Index of Political Development

Cutright's (1963) index of political development is based on measures of structural

complexity, composition of legislative bodies and form of political leadership. According to

Cutright, politically developed nations have more complex national political structures than less

developed ones. He estimated the principles that affected the formation of legislative and

executive bodies in 77 countries for the time span between 1940 and 1960. Each country could

acquire 0 to 3 points per year (maximum 2 points for the legislative state authority and maximum

1 point for the executive state authority). Accordingly, the index varied between 0 and 63. By

means of index Cutright (ibid) argued that political institutional development was not correlated

with the level of education, urbanization, economic growth, communication systems e.t.c.

however, he contended that communication systems were highly correlated with political

development. The weakness of Cutright’s index comes from an invalid assumption that the

presence of democratic institutions is sufficient to describe the level of democracy in a country.

Moreover Cutright’s index may prove ineffective when comparing highly developed

democracies

Bollen’s Political Democracy Index

Kenneth Bollen (1980, 372) defines democracy as “the extent to which the political

power of the elite is minimized and that of the nonelite is maximized.”

Bollen (1980, 372) emphasizes two features of political democracy as variables of his

analysis- political liberties and popular sovereignty (expressed in the electoral process).

Bollen’s indicators of political liberties are:

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 1.Press freedom (ten-point scale),

2.Freedom of group opposition (four-point scale),

3.Government sanctions (the number of cases).

Bollen’s indicators of popular sovereignty are:

1.Fairness of elections,

2.Executive selection i.e., whether chief executive is elected,

3.Legislative selection – i.e., whether the legislature is elected and effective.

Each indicator is linearly transformed to the arbitrary scale of 0 to 100 and the overall

index is the simple average of those scaled scores.

Vanhanen’s Index of Democracy1

The Vanhanen’s Index of Democracy (see Vanhanen 1997; 2000; 2003) was designed

and developed by TatuVanhanen, professor emeritus at the University of Tampere and the

University of Helsinki. According to Vanhanen the two theoretical dimensions of

democratization examined by Robert A. Dahl (1971) - public contestation and the right to

participate- seem to correspond to those characteristics of political systems that best discriminate

more democratic systems from less democratic ones. He calls these dimensions "competition"

(C) and "participation" (P).

Competition is the proportion of the votes won by smaller parties in parliamentary and/or

presidential elections, to indicate the degree of competition in a given political system. This

figure is calculated by subtracting from the total (100 percent) percentage of votes won by the

largest political party.

Participation is the percentage of the population that has actually voted in the elections. It

should be noted that this percentage is calculated from the total population, not from the adult or
1
http://www.prio.no/CSCW/Datasets/Governance/Vanhanens-index-of-democracy

10
enfranchised population. It is essential to distinguish between these two variables as they

represent different dimensions of democratization. Therefore a plausible assumption would be

that only combination of the two can suggest the most realistic and effective indicator of

democratization.

Democracy Index=C*P/100

These indicators have been used by Vanhanen (2000) to categorize political systems as

democratic, semi-democratic and non-democratic. Democracy Index scoring 5 and more defines

a democratic system; democracy Index scoring from 2 to 5 is a semi-democratic system. Overall,

the lower scores mean that political system is non-democratic

The main strengths of Vanhanen’s index are that it includes objective indicators and is

easy to calculate. However Vanhanen’s index has also its shortcomings: it provides a biased

description of democracy and disregards its other features and characteristics.

Freedom House 2

Freedom House is a non-governmental organization that conducts research on

democracy, political freedom and human rights. The organization's annual “Freedom in the

World” is a survey that attempts to measure the degree of democracy and political freedom for

195 countries and 14 select territories. Conceptually, freedom is being based on the two

dimensions of political rights and civil liberties3, which Freedom House (2008, 6) calls “political

rights and civil liberties checklists”. The political rights questions are grouped into three

subcategories: Electoral Process (3 questions), Political Pluralism and Participation (4), and

Functioning of Government (3). The civil liberties questions are grouped into four subcategories:

2
http://www.freedomhouse.org
3
Political rights and civil liberties indices are very important variables for democracy assessment. Taking into
account that there is no annual worldwide statistics concerning human rights, the average of these two ratings
were included in the model as one variable. Freedom Houses’ complete database for 195 countries will provide
an opportunity for an in-country analysis of democracy in future researches.

11
Freedom of Expression and Belief (4 questions), Associational and Organizational Rights (3),

Rule of Law (4), and Personal Autonomy and Individual Rights (4). Every sub-category again is

clustered into different sub-questions. In context of a peer review process, experts (analysts)

assign for every covered country a certain number of raw points to each sub-category. Scores are

awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest

degree and 4 the greatest degree of rights or liberties present.

The highest score that can be awarded to the political rights checklist is 40 (or a total

score of 4 for each of the 10 questions). The highest score that can be awarded to the civil

liberties checklist is 60 (or a total score of 4 for each of the 15 questions).

The raw points are converted into a 1-7 point rating scale, and the combined average of

these two ratings determines the final “country status”, which is in numerical terms: 1.0 to 2.5 =

free; 3.0 to 5.0 = partly free; 5.5 to 7.0 = not free.

The strength of these indices is that they cover a relatively long time period (1972–present).

However Freedom House indices are based on expert assessment only which is incompatible

with other methods and assumes some level of subjectivism.

Economist Intelligence Unit’s Democracy Index4

The Democracy Index is an index employed by the Economist Intelligence Unit to

measure the level of democracy in 167 countries

The Economist Intelligence Unit’s index of democracy (2007, 8-11), on a scale from 0 to

10, is based on the ratings for 60 indicators grouped in five categories:

1. Electoral process and pluralism,

2. Civil liberties,

3. The functioning of government,

4
http://www.economist.com/node/8908438

12
 4. Political participation,

5. Political culture.

Each category has a rating on a 0 to 10 scale, and the overall index of democracy is the

simple average of the five category indices. The category indices are based on the sum of the

indicator scores in the category, converted to a scale of 0 to 10. For 60 indicators combination of

a dichotomous and a three-point scoring system has been used. Most answers are experts'

assessments. Each answer is translated into a mark, either 0 or 1, or for the three-answer

alternative questions, 0.5. With the exception of some cases, the sums are added within each

category, multiplied by ten, and divided by the total number of questions within the category.

The index values are used to place countries within one of four types of regimes (ibid,

8):

1. Full democracies—scores of 8-10.

2. Flawed democracies—scores of 6 to 7.9.

3. Hybrid regimes—scores of 4 to 5.9.

4. Authoritarian regimes—scores below 4.

Polity IV5

The original conceptual scheme of Polity has been designed, and the original Polity I data

collected under the direction of Ted Robert Gurr (1974). The Polity IV Project contains collected

data analysis up to 2012. It is under the direction of Dr. Monty G. Marshall and supported by the

Political Instability Task Force, Societal-Systems Research Inc, and Center for Systemic Peace.

The database of Polity IV covers all “major, independent states in the global system (i.e., states

with total population of 500,000 or more in the most recent year)” for the period 1800-2012.

5
http://www.systemicpeace.org/polity/polity4.htm

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Polity IV (Marshall, Gurr, Jaggers, 2010) provides two cumulative indices democracy and

autocracy that include the following five dimensions:

1. Competitiveness of executive recruitment,

2. Openness of executive recruitment,

3. Constraints on the chief executive,

4. Regulation of participation,

5. Competitiveness of participation.

These five dimensions are weighted differently. The two indices are normally used

together by subtracting autocracy from democracy, which provides the Polity variable. The

Polity variable oscillates from -10 (high autocracy) to +10 (high democracy). Accordingly, the

Polity variable consists of a 21-point scale and the variable does not divide countries into

subgroups such as democracies and non-democracies. The strengths of Polity IV are that the

index covers a long period of time and is open in its methodology. Its weakness is that it deals

only with institutional aspects of democracy.

Democracy Ranking6

The Democracy Ranking (Campbell, David F. J., Miklós Sükösd, 2002) is an annual

ranking of all democracies (country-based democracies) in the world focused on the Quality of

Democracy in an international perspective. The Democracy Ranking publishes the ranking

scores and displays their fluctuations over time.

The applied conceptual formula which measures the quality of democracy integrates

freedom and other characteristics of the political system with the performance of non-political

dimensions (gender, economy, knowledge, health, and environment). Democracy Ranking

6
http://www.democracyranking.org/en/

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emphasizes a broader understanding of democracy, creating a conceptual link between politics

and the output and performance of society.

The Democracy Ranking initiative applies the following conceptual formula for defining

democracy and measuring the quality of democracy (Campbell, David F. J. 2008, 40-41):

Quality of Democracy = (freedom & other characteristics of the political system) &

(performance of the non-political dimensions)

The weights of dimensions are distributed accordingly (Campbell and Sükösd, 2002, 6;

Campbell and Pölzlbauer, 2008, 6):

politics (or the political system) 50%;

gender (gender equality in socioeconomic and educational terms) 10%;

economy (or the economic system) 10%;

knowledge (knowledge society, research and education) 10%;

health (or the health system and health status) 10%;

environment (environmental sustainability) 10%.

I consider that within the dimensions the indicators may be highly correlated, which

signifies increased influence of the same variables. Beside, many studies confirm that the

economy is one of the most important factors influencing the quality of democracy. In the model

the group of economic variables is weighted as 10% which, in my opinion, should be higher. At

any rate the variables used in the model are very versatile and describe the democracy from

different aspects.

4. METHODOLOGY

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 The goal of the research is to develop the model of democracy (Index of Democracy Level-

IDL) approbating it in the example of Armenia and discovering factors supporting and

destroying democratization in Armenia.

To develop the model initially more than 50 variables were selected and later filtered. The

filtration and choice of the variables were based on the method of correlation matrix construction

and variables expulsion. Variables with high correlation coefficients (R≥ I0.7I) were excluded

from the model. Some variables were excluded as a result of additional researches. For example

it was observed that the crime rate (per capita) in such countries as Sweden (0.147), Belgium

(0.097), Denmark (0.085), UK (0.074), Germany (0.073) and other European countries was

higher than in Azerbaijan (0.003), Armenia(0.005), Tajikistan (0.002), Kyrgyz Republic (0.006)

and so on, where democratic principles are significantly less developed.

After filtration the following 25 variables were grouped in 5 dimensions and included into

the model:

Indicators of political dimension

1. Simple average of values of Civil liberties and Political Rights Indices7- CL&PR

Political rights and Civil liberties indices are evaluated by the Freedom House within

Freedom in the World survey. The political rights questions are grouped into three

subcategories: Electoral Process (3 questions), Political Pluralism and Participation (4), and

Functioning of Government (3). The civil liberties questions are grouped into four subcategories:

Freedom of Expression and Belief (4 questions), Associational and Organizational Rights (3),

Rule of Law (4), and Personal Autonomy and Individual Rights (4). Every sub-category again is

7
http://www.freedomhouse.org

16
clustered into different sub-questions. Each country is assigned a numerical rating from 1 to 7 for

both political rights and civil liberties, with 1 representing the most free and 7 the least free8.

2. Freedom of the Press (Freedom House)9- FP

Freedom of the Press index is also evaluated by the Freedom House. The research and
ratings process involves several dozen analysts—including members of the core research
team headquartered in New York, along with outside consultants—who prepared the draft
ratings and country reports. Countries are given a total score from 0 (most free) to 100 (least
free) on the basis of a set of 23 methodology questions and 109 indicators divided into three
broad categories covering the legal, political, and economic environment. Based on the
scores, the countries are then classified as "Free" (0 to 30), "Partly Free" (31 to 60), or "Not
Free" (61 to 100) 10.
3. Corruption perceptions Index11-CPI

Corruption Perceptions Index (CPI) is published by Transparency International which is

determined by expert assessments and opinion surveys12. It is based on scale from 0 to 10 (0 to

100 according to the updated methodology), where 0 means the highest, 10 the lowest level of

corruption perception. The importance of the given variable is caused by the circumstance that

corruption rates indicate the quality of bureaucracy and of public administration.

4. Rule of law (WGI)13-RL

The Worldwide Governance Indicators are a long-standing research project to develop cross-

country indicators of governance (Daniel Kaufmann, AartKraay, Massimo Mastruzzi. 2010, 2-

3.). The WGI consist of six composite indicators one of which is the Rule of Law.

8
http://www.freedomhouse.org/report/freedom-world-2013/methodology
9
http://www.freedomhouse.org
10
http://www.freedomhouse.org/report/freedom-press-2013/methodology
11
http://www.transparency.org/research/cpi/
12
Transparency International. Corruption Perceptions Index 2012: Technical Methodology
Note.http://www.transparency.org/files/content/pressrelease/2012_CPITechnicalMethodologyNote_EMBARGO_E
N.pdf
13
www.govindicators.org

17
 Rule of Law- capturing perceptions of the extent to which agents have confidence in and

abide by the rules of society, and in particular the quality of contract enforcement, property

rights, the police, and the courts, as well as the likelihood of crime and violence (Daniel

Kaufmann, Aart Kraay, Massimo Mastruzzi. 2010, 4.).

5. Political Stability/Absence of Violence (WGI)-St.

Political Stability is also one of the six dimensions of governanceof WGI project (Daniel

Kaufmann, Aart Kraay, Massimo Mastruzzi. 2010).

Political Stability and Absence of Violence - capturing perceptions of the likelihood that the

government will be destabilized or overthrown by unconstitutional or violent means, including

politically-motivated violence and terrorism(Daniel Kaufmann, AartKraay, Massimo Mastruzzi.

2010, 4.).

6. Political System-PS

Parliamentary (2), Assembly-elected President (1), Presidential (0)

Political systems with unelected executives get a 0 point. Systems with presidents who are

elected directly or by an electoral college, in cases where there is no prime minister, also receive

a 0. In systems with both a prime minister and a president, we consider the following factors to

categorize the system:

a) Veto power: president can veto legislation and the parliament needs a supermajority to

override the veto.

b) Appoint prime minister: president can appoint and dismiss prime minister and / or other

ministers.

c) Dissolve parliament: president can dissolve parliament and call for new elections.

The system is presidential if (a) is true, or if (b) and (c) are true.

18
 Countries in which the legislature elects the chief executive are parliamentary (2), with the

following exception: if that assembly or group cannot easily recall him (if they need a 2/3 vote to

impeach, or must dissolve themselves while forcing him out) then the system gets a 1.

7. Social unrest and political pressure- PP

This variable includes the number of demonstrations, strikes, social gatherings and

disturbances as well as political assassinations, arrests, tortures, threatsand other indicators of

unrest and pressurein a given period of time. It is a major variable for measuring democracy and

despite the absence of yearly official statistics I have built my evaluation on the analysis of

information from various media reports and researches which I have scaled from 0 to 5.

8. Majority in the parliament-MP

If the party of the executive has an absolute majority in one of the houses with lawmaking

power 0 point is given. If the mandates distribution is more or less equal, it gets 1 point.If an

opposition party has an absolute majority in one of the lawmaking houses 2 points are given.

9. Global Gender Gap Index14- GGG

The Global Gender Gap Report is published by the World Economic Forum. The report

examines four critical areas of inequality between men and women in 135countries around the

globe (Ricardo Hausmann, Laura D. Tyson, Berkeley, SaadiaZahidi. The Global Gender Gap

Report, 2012). They are as followings:

1. Economic participation and opportunity – outcomes on salaries, participation levels and

access to high-skilled employment.

2. Educational attainment – outcomes on access to basic and higher level education.

3. Political empowerment – outcomes on representation in decision-making structures.

4. Health and survival – outcomes on life expectancy and sex ratio.

14
http://www.weforum.org/issues/global-gender-gap

19
 The final value ranges between 1 (equality) and 0 (inequality) (Ricardo Hausmann, Laura D.

Tyson, Berkeley, SaadiaZahidi. The Global Gender Gap Report, 2012, 4-6).

10. Presence of conflict -Conf.

The following subcategories are consideredwith fitting points: conflict absence (0); passive

conflict (situation when the conflict between the states is not accompanied by active military

operations) (1); and active conflict (situation when the conflict between the states is

accompanied by active military operations) (2). During the data standardization the maximum

accepted value is 0 and the minimum value is 2.

11. Religion-R

It has been observed that Christianity and democracy have strong correlation,whereas Islam

and democracy are hardly compatible due to Islam's denial of differences between politics and

religion. Hence Christian countries got 1 point, and non-Christian countries had 0 point.

Indicators of economic dimension

1. FDI (% of GDP)15-FDI

Foreign direct investment are the net inflows of investment to acquire a lasting management

interest (10 percent or more of voting stock) in an enterprise operating in an economy other than

that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term

capital, and short-term capital as shown in the balance of payments. This series shows net

inflows (new investment inflows less disinvestment) in the reporting economy from foreign

investors, and is divided by GDP.

2. Index of economic freedom16-IEF

15
http://data.worldbank.org/indicator/BX.KLT.DINV.WD.GD.ZS
16
http://www.heritage.org

20
 The Index of Economic Freedom is a series of 10 economic measurements created by the

Heritage Foundation and the Wall Street Journal. The 10 factors (Business Freedom, Trade

Freedom, Monetary Freedom, Government Size/Spending, Fiscal Freedom, Property Rights,

Investment Freedom, Financial Freedom, Freedom from Corruption, Labor Freedom) are equally

weighted and averaged to get an overall economic freedom score for each economy. Each one of

the 10 freedoms is graded using a scale from 0 to 10017. In general Index of Economic Freedom

indicates legal system and property rights guarantees and is considered to be one of the

significant indicators for measuring democracy.

3. Inflation rate, %18- Inf.

Inflation as measured by the consumer price index reflects the annual percentage change in

the cost to the average consumer of acquiring a basket of goods and services that may be fixed or

changed at specified intervals, such as yearly.

4. Budget deficit,(% of GDP)19-Def.

Budget deficit is the amount expressed as a percentage of GDP by which government

expenditure exceeds income from taxation, customs duties, etc., in any one fiscal year.

5. External trade rate (export and import of goods and services) % of GDP20–Tr.

Trade is the sum of exports and imports of goods and services measured as a share of gross

domestic product.

6. Domestic credits (% of GDP)21-DC

Domestic credit provided by the banking sector includes all credit to various sectors on a

gross basis, with the exception of credit to the central government, which is net. The banking

17
http://www.heritage.org/index/book/methodology
18
http://data.worldbank.org/indicator/FP.CPI.TOTL.ZG
19
www.armstat.am
20
http://data.worldbank.org/indicator/NE.TRD.GNFS.ZS
21
http://data.worldbank.org/indicator/FS.AST.DOMS.GD.ZS

21
sector includes monetary authorities and deposit money banks, as well as other banking

institutions where data are available (including institutions that do not accept transferable

deposits but do incur such liabilities as time and savings deposits). Examples of other banking

institutions are savings and mortgage loan institutions and building and loan associations.

7. GNI per capita, ppp22

GNI per capita based on purchasing power parity (PPP). PPP GNI is gross national income

(GNI) converted to international dollars using purchasing power parity rates. An international

dollar has the same purchasing power over GNI as a U.S. dollar has in the United States. GNI is

the sum of value added by all resident producers plus any product taxes (less subsidies) not

included in the valuation of output plus net receipts of primary income (compensation of

employees and property income) from abroad. Data are in current international dollars.

Indicators of social dimension

1. Unemployment, total (% of total labor force)23 -U

Unemployment refers to the share of the labor force that is without work but available for

and seeking employment. Definitions of labor force and unemployment differ by country.

2. GINI index24

Gini index (Index of income concentration) is the deviation of actual volume of households’

income from the uniform distribution, Gini index equals to 0, for absolute inequality it equals to

1.

3. Real wage25- W

22
http://data.worldbank.org/indicator/NY.GNP.PCAP.PP.CD
23
www.armstat.am
24
www.armstat.am
25
www.armstat.am

22
 Real wages shows quantity of goods and volume of services, which is possible to buy with

salaries and wages of the reference period compared to base period consumer prices. Index of

real wages is calculated by correlation of the index of average monthly nominal wages and

salaries by consumer price index for goods and services. Both indices should refer to one and the

same period.

Indicators of education dimension

1. Public spending on education, total % GDP26- ES

Public expenditure on education as % of GDP is the total public expenditure (current and

capital) on education expressed as a percentage of the Gross Domestic Product (GDP) in a given

year. Public expenditure on education includes government spending on educational institutions

(both public and private), education administration, and transfers/subsidies for private entities

(students/households and other private entities).

2. HDI education index27-HDI.ed

The education component of the HDI (published by the United Nations Development

Program) is based on two indicators:

-“expected years of schooling” (an average number of years of education received by people

ages 25 and older, converted from education attainment levels using official durations of each

level)

-“mean years of schooling” (number of years of schooling that a child of school entrance age

can expect to receive if prevailing patterns of age-specific enrolment rates persist throughout the

child's life)28.

Indicators of health dimension

26
http://data.worldbank.org/indicator/SE.XPD.TOTL.GD.ZS
27
http://hdr.undp.org/en/statistics/data/2011/
28
HDR_2013_EN_TechNotes. Page 2.

23
1. Health expenditure, %GDP29-HS

Total health expenditure is the sum of general government expenditure on health and private

expenditure on health in a given year.

2. Life expectancy at birth, total30 -LE

Life expectancy at birth indicates the number of years a newborn infant would live if

prevailing patterns of mortality at the time of its birth were to stay the same throughout its life.

All variables are standardized by the following formula:

where

and are the lowest and highest values the variable can attain, respectively31.

The calculation of each group of standardized indicators (Political Factors Index (Pol.F),

Economic Factors Index (Ec.F), Social Factors Index (Soc.F), Educational Factors Index (Ed.F),

Health Factors Index (H.F)) was based on counting the weighted average for Political Factors

and simple average for the variables of other dimensions:

Pol.F = (2*(CL&PR + PF + CPI + RL + St. +PS + PP + MP + GGG) + Conf.+ R)/20

Ec. F = (GNI + FDI + IEF + Inf. + Def. + Tr. + DC)/7

Soc.F = (GINI + W + U)/3

Ed.F = (ES + HDI.ed)/2

H.F = (HS + LE)/2

Inserting the appropriate standardized values into the above mentioned formulas will help

us get the indices of political, economic, social, educational and health factors.

29
http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS
30
http://data.worldbank.org/indicator/SP.DYN.LE00.IN
31
The minimum and maximum values of “negative” variables (e.g. inflation rate, budget deficit) have been swaped.

24
 Taking into account the impact of above-mentioned 5 groups of variables (dimensions)

on the democracy level I propose to formulate the degree of interrelation between these

indicators and democracy. The latter is framed based on the existing theoretical approaches and

relevant studies.

Accordingly, the Index of Democracy Level is a weighted average of 5 computed

indices:

IDL =(40* Pol.F +30* Ec.F +20* Soc.F +5* Ed.F +5* H.F)/100

The final values range between 0 and 1, where 1 is the highest and 0 is the lowest level of

democracy.

For Armenia in the time span between 1998 and 2012 the following values of Political,

Economic, Social, Educational, Health Factors and IDL have been calculated (Table 1):

Table 1. Indices of Political, Economic, Social, Educational, Health Factors of Armenia in the time
span between 1998 and 2012

Political Economic Social Educational Health Index of

Factors Factors Factors Factor Factor Democracy
Years Index Index Index Index Index Level
1998 0.442 0.406 0.674 0.384 0.762 0.491
1999 0.422 0.413 0.528 0.389 0.791 0.457
2000 0.470 0.476 0.574 0.569 0.820 0.515
2001 0.480 0.391 0.454 0.481 0.873 0.468
2002 0.506 0.489 0.573 0.363 0.688 0.516
2003 0.473 0.476 0.746 0.363 0.687 0.534
2004 0.447 0.470 0.691 0.481 0.710 0.517
2005 0.491 0.534 0.738 0.540 0.562 0.559
2006 0.476 0.512 0.707 0.548 0.442 0.535
2007 0.467 0.511 0.673 0.645 0.395 0.527
2008 0.432 0.495 0.640 0.702 0.383 0.503
2009 0.462 0.446 0.602 0.883 0.518 0.509
2010 0.470 0.452 0.496 0.705 0.504 0.483
2011 0.480 0.591 0.482 0.676 0.472 0.523

25
 2012 0.426 0.731 0.549 0.529 0.472 0.549

5. INDICES AND TREND OF ARMENIAN DEMOCRATIZATION

Figure 1. Indices of Political, Economic, Social, Educational, Health Factors of Armenia in the time
span between 1998 and 2012

1.000

0.900

0.800

0.700

0.600

0.500

0.400

0.300

0.200

0.100

0.000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Political Factors Economic Factors Social Factors Education Factors Health Factors

Figure 1 illustrates the trends of calculated Political, Economic, Social, Educational and

Health Factor Indices. Since 1998 the dynamics of political factors affecting democracy has

remained on the same level. So it can be concluded that there has been no visible progress in the

political process of democratization in Armenia since 1998. The minimum value of Political

Factors Index with magnitude of 0.422 is fixed in 1999 with a maximum magnitude of 0.506 in

26
2002. All the variables of Political Factors Indices included into the model showed relatively low

results in 1999 except for those of Civil Liberties and Political Rights. Particularly the value of

social unrest was very high due to increased levels of political assassination. On the contrary, the

value this variable was very low in 2002; at the same time the corruption perception index was

the highest (highest values signify lowest level of corruption perception) compared to other years

within the observed period.

As for the economic factors affecting democracy, it should be noted that after the

collapse of Soviet Union, Armenia was one of the fastest developing countries in transition.

During 1994-2001 a stable 5% average annual economic growth was recorded. From 2002 to

2007 the economic growth was a double-digit number, however it later decreased due to

financial crisis. In general the global financial and economic crisis heavily affected the Armenian

economy. After high growth rates for the past 16 years, Armenia experienced economic decline

in 2009 (14.2%). Figure 1 illustrates the declining index of Economic Factors affecting

democracy for the mentioned year. Two cases of decline in 2001 and 2004 have been also

identified before the economic downturn. The first is related to the increased values of inflation

rate and budget deficit, the second is connected with the reduction of foreign trade volumes

within remaining high inflation rate. As shown in Figure 1 starting from 2010, the economic

growth rate and the Indices of Economic Factors, subsequently, began to positively influence

Armenian democratization.

Following the dynamics of Social Factors Indices, I can conclude that their gradual

improvement has had positive influence on democracy until the economic crisis. After the crisis,

though, its values have been in decline for two years particularly affected by the raised GINI

index. The latter denotes deepening polarization of population by income.Basically Education

27
Factors also have affirmative influence on democracy in Armenia. Two drastic increases in 2000

and 2009 were caused by the increase in government spending on education as well as by higher

HDI education index which reached its highest peak in 2009 within the years of observed period.

In contrast, the trends in Health Factors Indices have developed in the opposite direction, with

some fluctuations and decline if compared to the beginning of observed period.

Figure 2. IDL (Index of Democracy Level) of Armenia in the time span between 1998 and 2012

1.000

0.900

0.800

0.700
0.583 0.603
0.600 0.532 0.533 0.542 0.536
0.519 0.511
0.472 0.483 0.472 0.474
0.500 0.449
0.425 0.420
0.400

0.300

0.200

0.100

0.000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Figure 2 demonstrates the IDL trend for Armenia in the time span between 1998 and

2012. As shown, in general, indices have positive growth trend. Namely democracy indices have

gradually improved. Moreover in the beginning of observed period fluctuation in trends was

higher than in the last seven years. It demonstrates that the democracy has become more

consolidated in the last few years compared to the first part of the observed period. The only

28
recorded sharp decrease in the mentioned timeframe was in 2010. It was provoked by the

influence of economic crisis resulting into a joint decline of Social, Educational and Health

Factors Indices. In 2000 and 2002 increases in IDL can be again explained by joint growth in

Political, Economic, Social, Educational and Health Factors Indices as compared to the previous

and following years. Mainly in the observed period the fluctuation of IDL trend in both direction

and magnitude is not high (st. dev. =0.05, mean = 0.5). It proves that the transition to democracy

in Armenia takes place smoothly and without serious upheavals.

6. FACTORS THAT INFLUENCE DEMOCRACY IN ARMENIA: ANALYSIS AND

DISCUSSION
As a starting point to analyzing the data, which is aimed at discovering the factors
that influence democracy in Armenia, I will run simple regressions32. In Table 2 the
indicators included in the model (see methodology) are taken as independent variables and
net IDL33 is considered as dependent variable. Table 3 illustrates the main findings which
result from simple regression analysis with a high power of explanation (only variables with
statistically significant coefficients are included).
As presented in Table 2 there are significant relationships between the two economic
factors (GNI per capita and domestic credit, % of GDP) and democracy. Particularly strong
dependence from GNI per capita is observed which resonates with the theory. The statistical
association between income and democracy is reproduced in most major works on
democracy (e.g., Robert A. Dahl, 1971; Samuel P. Huntington, 1991). Modernization theory
(Lipset, 1959) is also based on the statement that higher income per capita causes democracy.
The regression analysis indicates that 100 $ increase in GNI per capita is associated with

32
Simple regression is used due to the short time-series (15 years).
33
Net IDL is the Index of Democracy Level cleaned from the independent variable in each simple regression.

29
0.002 units increase in democracy index. The R2 for GNI per capita (ppp, $) is high, with a
value of 0.883 which explains 88% of the variation in democracy.
HDI education is revealed as highly significant predictor explaining the variation in
democracy index as well. Some previous researches have also established correlation
between education and level of democracy. Moreover, modernization theory claims that
high levels of schooling are both prerequisites for democracy and major cause of
democratization. Studying education and democracy, Edward Gleaser (Gleaser et al. 2004)
has discovered that changes in schooling affect changes in democracy. Actually, since the
literacy rate is very high (99.6%) in Armenia it positively influences democracy and boosts
its level of development. Moreover, according to the regression analysis 0.1 unit change in
HDI education lead to 0.2 unit change in net IDL. The R² for HDI education with a value of
0.839 indicates that education explains 84% of the variation in democracy. This statement is
supported by another regression outcome, according to which public spending on education
(% of GDP) is also highly related with net IDL with a positive coefficient.

Table 2 Simple regression on democracy (net IDL)

Variable Coefficient Sig R² N

GNI per capita (ppp, $100). Regression .000 .883 15
Constant .385 .000
GNI per capita, ppp, ($100) .002 .000

HDI Education. Regression .000 .839 15

Constant -1.514 .000
HDI Education 2.713 .000

Unemployment (%). Regression .000 .815 15

Constant .681 .000
Unemployment (%) -.007 .000

GINI index. Regression .000 .645 15

Constant .744 .000
GINI index -.559 .000

30
Real Wage ($1000). Regression .001 .565 15
Constant .481 .000
Real Wage ($1000) .002 .001

Domestic credit (% of GDP). Regression .007 .443 15

Constant .473 .000
Domestic credit (% of GDP) .003 .007

Political stability. Regression .008 .434 15

Constant .393 .000
Political stability .003 .008

Publ.spend. on educat (% of GDP). Regression .035 .300 15

Constant .360 .000
Publ.spend. on educat (% of GDP) .056 .035

Table 3 Simple regression on democracy (IDL)

Variable Coefficient Sig R² N

Military expenditure (% of gov.exp.). Regression .000 .796 14

Constant .425 .000
Military expenditure (% of gov.exp.) .001 .000

Poverty (%).Regression .000 .738 14

Constant .615 .000
Poverty level (%) -.003 .000

Prop. of women’s seats in parliament (%). Regression .000 .661 15

Constant .402 .000
Women’s prop. of seats in parliament .016 .000

Mobile subscriptions (per 100). Regression .001 .648 14

Constant .466 .000
Mobile subscriptions (per 100) .001 .001

Internet users (per 100). Regression .001 .607 15

Constant .466 .000
Internet users (per 100). .004 .001

Industry (% of GDP). Regression .001 .601 15

Constant .329 .000
Industry (% of GDP) .005 .001

31
Regulatory Quality (WGI).Regression .001 .596 14
Constant .151 .092
Regulatory Quality (WGI) .006 .001

Government Effectiveness (WGI). Regression .001 .586 14

Constant .315 .000
Government Effectiveness (WGI) .004 .001

Urban population (% of total). Regression .002 .524 15

Constant 5.9 .001
Urban population (% of total) -.085 .002

Another finding illustrates that the Index of Democracy Level (net) of Armenia is
strongly affected by social indicators. As shown in Table 2 the coefficients for unemployment
(%) and GINI index are statistically significant and negative, which means that the increase
in unemployment (1 percent) and GINI index (0.1 unit) will reduce democracy index with
the magnitude of 0.007 and 0.056 units, respectively. In particular unemployment (%) has
high explanatory power (81%). Another social factor such as real wage ($) seems to positively
affect the level of democracy, which is quite predictable. Thus, $1000 increase in real wage
will lead to increase in IDL (net) with 0.002 units.
The regression results show that political stability (WGI) has statistically significant
impact on democracy. 1 unit change in political stability (WGI) leads to 0.03 unit change in
IDL with an explanatory power of 43%.
The research hasn't detected any statistically significant linear dependence of net IDL
on the rest of independent variables included into the model.
Table 3 displays the results of simple regressions on IDL and various significant
independent variables. As illustrated in the table, military expenditure (% of government
expenditures) is significantly related with IDL. Moreover, democracy may correlate with
either low or high levels of military expenditures. In general democratic states are
considered more likely to be in peace and less likely to provoke war which suggests that

32
increased level of democracy is expected to decrease military expenditures (See Lebovic,
2001).
Actually, analyzing appropriate data we witness that developed democratic countries
have less military spending (% of GDP) than their developing counterparts. The study of
military expenditure in developed countries also shows that its trend has been gradually gone
down along with democratization. In case of the countries in transition from authoritarian or
totalitarian regimes to democracy the picture may be different which makes me to consider
that mentioned concept can equally apply to and explain the expenditure in consolidated
democracies. Particularly studying data on military spending (% of GDP) in the countries of
former Social block I conclude that after the collapse of Soviet Union and parallel to the shift
to more democratic statehood, military expenditure in newly independent has developed
with different dynamics. In some of these courtiers (Armenia, Georgia, Azerbaijan,
Tajikistan, Belarus, Moldova, Slovenia, Slovak Republic) state spending on defense has
periodically increased and decreased. In countries like Estonia, Kyrgyz Republic the same
expenditure has gradually raised, whereas in case of Poland and Kazakhstan they remained
static. Reductions in military spending have taken place only in a limited number of post-
transition countries (Czech Republic, Hungary). The regression results illustrate that more
military expenditures result into higher levels of IDL in Armenia, and one percent change in
military expenditure leads to 0.001 unit change in independent variable. Therefore military
expenditure (% of government expenditures) has a high explanatory power which amounts
up to 80%.
As shown in Table 3, the poverty level is statistically related to the IDL with an
expected negative coefficient. According to the results, one percentage point reduction in the
poverty level is associated with 0.003 unit increase in democracy index. The R2 for poverty
level (%) is high, with a value of 0.737 which indicates that poverty explains 74% of the
variation in democracy.

33
 Women's representation in parliament also has statistically significant relationship
with the level of democracy, with positive coefficient. One percent change of proportion in
women’s seats in the parliament is equivalent to 0.16 unit change in the Index of Democracy
level. The R² for the independent variable has a high value of 0.661, which indicates that
women’s representation in the parliament explains 66% variation in democracy.
Obviously the dissemination of information and emergent communication promote
democracy. People use mobile phones, SMS and Internet to communicate, organize
demonstrations and social movements. According to the analysis independent variables
mobile subscriptions (per 100) and Internet usage (per 100) are statistically related to the
dependent variable, with positive coefficients, which are also expected. And increase in
mobile subscriptions per 100 people in Armenia leads to the increase in democracy index by
0.001 points. At the same time the growth in Internet users per 100 people increase the
Index of Democracy Level by 0.004 points which means that Internet affects democracy in
Armenia 4 times stronger than mobile phones. The regression amounts to as much as 65% (in
case of mobile subscription) and 61% (in case of Internet users) of variation in democracy.
Many scholars (see e.g. Lipset, 1959, 80) confirm that industrialization is an important
determinant of democracy, where higher level of industrialization is associated with
increased level of democracy. According to the regression analysis, industry is shown to be
highly significant predictor of variation in democracy. The R² for industry (% of GDP) is
high, with a value of 0.601, which indicates that industry explains 60% of variation in
democracy.
Regulatory Quality and Government Effectiveness (World Bank) affect democracy
significantly and positively with the respective magnitude of 0.006 and 0.004 units. These
two independents explain 60% of variation in democracy.
Some findings in my analysis can be perceived as contradictory to previous research
outcomes and theories. For example the finding that urbanization is not associated with
higher levels of democracy is not in line with what modernizationists (Lipset, 1959, 80)

34
claim. However, according to some scholars (Barro, 1999, 165) theoretical ambiguity
regarding the influence of urbanization rate on democracy is a common practice. The results
of my analysis of Armenian democratization reveal that one percentage point increase in
urban population to total population ratio causes significant decrease in the democracy index
with magnitude of 0.085. It may denote, that the reduction of population in rural areas of
Armenia (mainly caused by migration) and centralization of population (including people
arriving from marzes) in the capital negatively affect democracy. The regression explains
52% of variation in the dependent variable.

7. CONCLUSION AND RECOMENDATIONS

At present there are more than dozen different indices covering various aspects of
democracy. Some of them emphasize formal or institutional aspects of democracy, others
highlight its procedural feature. Moreover, a group of researchers have even developed
indices that would allow to measure the level of implementation of declared rights. The
Index of Democracy Level considers all three aspects of democracy. Methodologically the
IDL relies on
 official statistics,
 creation of new indicators,
 pre-existing indicators regularly released by renowned international
organizations.
So, in general, IDL is more comprehensive than Vanhanen’s Index of democracy,
Polity IV, Freedom House, HDI, the Economist’s Democracy Index and other indices.
The proposed model allows to:
• acquire four subindices (political, economic, social, education and health) in order to
assess and compare the state progress in each field
• implement in-country analysis, while assessing the dynamics of democratization in a
country during any period of time

35
 • conduct a cross-country analysis, compare and classify countries by the level of
democracy according to the scale from 0 to 1.
• reveal the most influential factors of democratization of a country

The analysis of Armenian democratization trend is illustrated in the following

findings:

- Since 1998 there has been no visible progress in the political aspect of
Armenian democratization.

- In general the democratization process in Armenia has taken a positive trend

of development in the time span between 1998 and 2012.

- In the last years democracy has become more consolidated as compared to the
first part of the observed period.

- In the observed period the trend of IDL fluctuation both in direction and in
magnitude is not high (st. dev.=0.05, mean=0.5). Therefore it may be
concluded that transition to democracy in Armenia takes place smoothly and
without serious upheavals.

When summing up the results of simple regression the most important findings we
have come up with are as follows:
- A strong net IDL dependence from GNI per capita is observed with high explanatory
power (88%)
- Education is determined as highly significant predicting factor that explains 84% of
the variation in democracy (net IDL)
- The level of democracy (net IDL) in Armenia is strongly affected by social indicators
such as GINI index, unemployment and real wage

36
 - Military expenditure (% of government expenditures) is significantly related with
democracy (IDL) in Armenia with positive coefficient and high explanatory power
amounting up to 80%

- Poverty is very important determinant of democracy (IDL) in Armenia

- Women's representation in parliament has positive influence on the development of

democracy (IDL)
- Mobile subscriptions (per 100) and Internet usage (per 100) are statistically correlated
to democracy. The positive effect of Internet on democracy (IDL) in Armenia is 4
times stronger than the same relation between mobile phones and democracy

- Regulatory Quality, Government Effectiveness (World Bank) and industrialization

significantly and positively affect democracy explaining 60% of variation in
democracy

- Urbanization is significantly related with democracy in Armenia with negative

coefficient. It denotes that the reduction of population in rural areas of Armenia
(mainly caused by migration) and centralization of population (including people
arriving from marzes) in the capital have negative impact on democracy.
To increase the level of democracy in Armenia competent infrastructures should
firstly pay attention to the above mentioned factors.

37
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