We model the transition from a chaotic status quo to a more orderly political regime as a two-stage game involving two warring factions & the citizens. The warring factions move first & decide the form of government by (1) inviting an external arbitrator, (2) choosing the people as arbitrator, ie, democratizing, or (3) maintaining the status quo. We analyze the conditions under which democracy is likely to emerge as the outcome of the game. We show that citizens prefer democracy because it generates a sociopolitical order that protects them against "banditry" & expropriation. Because the citizens' actions generate positive externalities, incentives for democratization are generated in part by the fact that protection against expropriation under democracy also indirectly benefits the warring factions. 1 Appendix, 35 References. [Copyright 2002 Sage Publications Ltd.]