Despite a rich literature on the determinants of democracy, the influence of one theoretically important factor has been neglected thus far. Unlike factors such as development, growth, and inequality, the concentration of economic power and its correlate, business unity, have not received systematic empirical treatment. We argue that this factor may act as a deterrent to democracy. Using a dataset covering 120 countries over 23 years, from 1988 through 2010, we find evidence for a negative effect of economic concentration on a nation’s level of democracy. We also show evidence suggesting that corporate political activity may provide a mechanism through which this negative effect is exercised. Our results point to the need to further understand the processes through which business elites undermine democracy.
