This paper develops a model to study the eects of electoral competition in nonde- mocratic regimes. In this model, an authoritarian government can introduce a system of fraudulent elections anticipating a democratic transition. If this government allows this sort of competition, it will undertake some investments, a portion of which are sunk costs, in setting up the organizational capacity to ... [Show full abstract] mobilize new voters. This organization is complementary to the institutions of democracy, hence, once a re- form has occurred, the authoritarian elite is more willing to tolerate democracy in the future. Comparative statics suggests that when elections under a dictatorship are more competitive, democracy is more likely. This result is investigated empirically using a panel of countries from 1972 to 2002. The evidence shows that, controlling for time invariant dierences as well as global and regional trends, an increase in the competitiveness of the electoral system in a dictatorship increases the probability of a transition to democracy in the following period. This eect is robust and consistent with the theory.