New research explains why we see a correlation between economic development and democracy.

Countries' own history as well as their neighbors' pasts influence elite beliefs about the effects of democracy on growth.

These beliefs, in turn, affect whether they choose to transition into or out of democratic rule.

This learning process is crucial for understanding observed democratization events since mid-twentieth century and can explain why democracies sometimes emerge during periods of economic expansion.

Our model shows that if the world experiences a major growth shock like the Great Depression,

elites may reverse course, leading to reversals toward authoritarianism.