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How does democratic transition affect party polarization? While previous literature on party politics in post-transition environments describes a fragmented political system marked by multi-partism and the rise of weakly institutionalized parties, party polarization in young democracies is underexplored. We argue that democratic transition reduces party polarization by introducing a new set of parties which have not consolidated their issue positions yet. The ambiguity of party positions makes ideological attributes less salient and renders a less polarized party politics. To assess the impact of the party polarization in young democracies, we employ a fuzzy regression discontinuity design (RDD). We use the Manifesto Project data on right-left positions of parties from 58 countries to measure party polarization and the Varieties of Democracy (V-DEM) data on regime transition to identify democratic transitions. Our findings suggest that party polarization on right-left issue position decreases on average, following the democratic transition.

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