Is democracy bad for development?

southsiderosie

Is democracy bad for development?

There has been a lot of back and forth in the politics thread over the role of the state in development, and the tradeoffs between socioeconomic advancement and political freedom. This debate has real-life implications: India has complained that they could match China’s rate of growth if they were not a democracy, and some leaders of countries that have rapidly developed (such as Lee Kwan Yew of Singapore) have been past proponents of the “Asian Values” model of development, which preferences social stability and carefully managed growth over individual rights and political pluralism.

On the one hand, this argument may be deeply unappealing to those who favor liberal democracy. And the track record of authoritarian governments isn’t great; many dictators have argued that they are repressing the population for the greater good, only for the population to later discover that the only “good” in question was the regime’s ability to stay in power and/or loot the country blind. On the other hand, it is hard to argue with the success of many East Asian economies – their populations are better educated, housed, fed, and paid than they were 50 years ago. And certainly the notion that people are willing to trade off individual sovereignty for stability is not a new one – Hobbes wrote about this in The Leviathan over 300 years ago.

My position on the issue is that, looking around much of East Asia, it may be tempting to say that the ends justify the means – that a (sometimes temporary) lack of democracy is justifiable because of their development outcomes over the last 50 years. However, taking a broader view of developing economies over the same period, Asia seems like the exception, rather than the rule. Even within the region, certainly authoritarian regimes such as the military junta in Myanmar and the “Dear Leader” in North Korea have done little to further the socioeconomic status of the general population. Beyond Asia, repression did nothing to further human or economic development in Central America or much of Africa, and some of the poorest countries in the world (in both an economic and social sense) are authoritarian regimes. Therefore, while development under democracy might be a slower and messier process, as a general rule, I think it is preferable in the long term to development under dictatorship.

What do others think?

Flamed Diving

South Korea managed to develop rapidly without trampling on democracy.

nesf

The problem is how do you know a priori that your new dictator will be of the benevolant economic growth variety? The potential downsides if they turn out to be a Mugabe style character are rather large..

southsiderosie

Flamed Diving wrote: »

South Korea managed to develop rapidly without trampling on democracy.

South Korea was under a military dictatorship from the 1960s until the mid-1980s.

Flamed Diving

southsiderosie wrote: »

South Korea was under a military dictatorship from the 1960s until the mid-1980s.

Oh, I didn't know that.

Denerick

All of the worlds democracies stem from western political and cultural values. This is a fact. I know loads of Asian people and they seem to agree that Asians are more deferential to authority than the average westerner - there are numerous historical reasons for this, but I'm willing to wager that its something to do with their lack of a modern intellectual enlightenment. (As in, the European enlightenment of the 18th century, which created the various revolutions which shaped the western world)

When people act surprised that China is continuing to grow strongly without developing democratic institutions, I feel like barfing. Liberal democracy tends to work well with a free market economy, but this is only because the most successful free market economies have tended to be liberal democracies. There is a tendency to view the two as complementary, when in reality we couldn't be further from the truth. Its a mere coincidence that economic freedom has in the past, generally led to an increase in political freedom.

So long as the masses, and more importantly the rising Chinese middle class are indifferent about whether they exercise political power or not, there will be no political change. The most they want is a slightly freerer media and slightly more transparant government. The age of the student revolutions are long gone in China.

So to answer the original question, democracy is indifferent to development. It may both help and hinder it. What really stifles development is corruption, and these exist in both authoritarian and liberal regimes. South Africa for example is a democratic republic but has very high levels of corruption (as do many Latin American countries and emergent African democracies) China has high levels of corruption but one of the penalties for it is the death penalty. Expect corruption to tail off in the next decade in China as the government begins to realise how important a transparant political system is to attract Foreign investment.

silverharp

India has complained that they could match China’s rate of growth if they were not a democracy,

it doesnt make it true. All you can do is if looking at these two countries is to judge them individually.


This is worth a watch, sometimes the Chinese dont always get it right

https://www.youtube.com/watch?v=0h7V3Twb-Qk

The Saint

Flamed Diving wrote: »

Oh, I didn't know that.

Yup, Korea develloped under Park Chung-hee who is credited with the countrys export led growth. I think they used an import substitution model of development building strong modern industries before opening them to international markets.

Flamed Diving

This is one of the major problems with a centrally planned economy, above. How can a central planner truely know what people need? How does he allocate resources efficiently?

Flamed Diving

The Saint wrote: »

Yup, Korea develloped under Park Chung-hee who is credited with the countrys export led growth. I think they used an import substitution model of development building strong modern industries before opening them to international markets.

Yeah, I knew that, I just didn't realise it was a dictatorship that was doing it.

southsiderosie

I agree that corruption is a big part of the story, but I don't necessarily think that it affects all countries in the same way. Foreign investors may grit their teeth over Chinese corruption, but they will deal with it in order to have access to the largest potential consumer market in the world. Investors also tend to look the other way when it comes to energy production - which only exacerbates and further entrenches the problem of corruption. So maybe investors are put off by corruption in smaller, less strategically important countries, but resource-rich and large countries may get more leeway.

I think the reason why I find the democracy vs. autocracy debate so troubling in practice is that there is not a great deal of evidence that democracy is that great for development, especially in a post-colonial context. Samuel Huntington noted that new democracies raise expectations among their population, but are too weak to handle all of their demands. So unfortunately, you end up with political chaos, and quite often a collapse into authoritarianism...which brings us back to the original question.

I feel rather unscientific saying it, but I honestly think a lot of development is really about timing and luck: a well-used resource boom; rich neighbors invested in the success of the region; visionary, honest leadership...sometimes all the chips fall the right way, and states can pull themselves out of poverty. But more often than not, it doesn't seem like that's the case.

southsiderosie

Flamed Diving wrote: »

This is one of the major problems with a centrally planned economy, above. How can a central planner truely know what people need? How does he allocate resources efficiently?

But not all dictatorships are centrally planned. Many, like the Pinochet regime, were neo-liberal. However, they had to engage in massive labor repression in order to enact their economic reforms. Labor repression also played a huge role in South Korean development - the military regime was able to keep wages low through squashing labor unions and worker protest.

Many East Asian countries are certainly interventionist - the state is a significant source of capital for private firms (or forces banks to direct resources). But one could arguably tell a similar story about France - there was an article in the Economist this week about the increase of state engagement with large firms under Sarkozy. Nobody would say that France is not a democracy, but the government actively directs resources into the private sector. I guess the difference here (versus, say, China) is that the public has the right to protest - which the French certainly avail themselves of - if they don't like what the government is doing.

Flamed Diving

southsiderosie wrote: »

But not all dictatorships are centrally planned. Many, like the Pinochet regime, were neo-liberal. However, they had to engage in massive labor repression in order to enact their economic reforms. Labor repression also played a huge role in South Korean development - the military regime was able to keep wages low through squashing labor unions and worker protest.

Many East Asian countries are certainly interventionist - the state is a significant source of capital for private firms (or forces banks to direct resources). But one could arguably tell a similar story about France - there was an article in the Economist this week about the increase of state engagement with large firms under Sarkozy. Nobody would say that France is not a democracy, but the government actively directs resources into the private sector. I guess the difference here (versus, say, China) is that the public has the right to protest - which the French certainly avail themselves of - if they don't like what the government is doing.

I was specifically referring to that video, to be honest, and to central planning, in general. Which is kind of off-topic anyway.

southsiderosie

Flamed Diving wrote: »

I was specifically referring to that video, to be honest, and to central planning, in general. Which is kind of off-topic anyway.

I agree with your general point about the problems of central planning; I guess my point was that attempts at planning - or heavy state intervention in private markets - is not exclusive to dictatorships or democracies...kind of like corruption, I guess (per an earlier post).

As a side note, have you read "Seeing Like a State" by James Scott? It gives an interesting overview of when state planning goes horribly wrong - and how even well-intentioned democracies can create enormous problems for themselves.

Flamed Diving

southsiderosie wrote: »

I agree with your general point about the problems of central planning; I guess my point was that attempts at planning - or heavy state intervention in private markets - is not exclusive to dictatorships or democracies...kind of like corruption, I guess (per an earlier post).

As a side note, have you read "Seeing Like a State" by James Scott? It gives an interesting overview of when state planning goes horribly wrong - and how even well-intentioned democracies can create enormous problems for themselves.

No, I haven't read it, but in my years of studying economics I have come across lots of examples, plus there is a wealth of anecdotal information if you quiz a Polish colleague on what life what like when he/she was little. Stories of people queueing hours for butter, only to find there is none, but hey, there's plenty of shoelaces!

silverharp

southsiderosie wrote: »

I agree with your general point about the problems of central planning; I guess my point was that attempts at planning - or heavy state intervention in private markets - is not exclusive to dictatorships or democracies...kind of like corruption, I guess (per an earlier post).

It comes down to commies cant do economic calculation and big gov. be it provider of services or regulator cant coordinate. A democracy and a dictatorship will suffer the same issue of cooridination.

LookingFor

Democracy definitely has its downsides.

It tends to breed a type of leader who is more concerned with the next election than with what's actually good for the country.

See: how governments spend and spend and spend on relatively instantly gratifying things in the good times to secure votes in the next election rather than being prudent about investments that have long term payoffs (e.g. health services...)

It can paralyse social development. See: crazy blasphemy legislation that is a result of a government afraid to consult the people in a referendum.

However true statesmen can emerge in a democracy. The system itself however can persuade a different disposition amongst politicians...often does, it seems to me, particularly in this country.

And the alternative? Dictatorship? Seems too close to potluck to me. Maybe you'll get an incredible leader. More likely, perhaps, you'll get a rotten one. At least in a democracy you can turf them out at reasonably regular intervals.

We do need ways to bring up politicians who can see beyond elections and the next election though.

imme

Flamed Diving wrote: »

South Korea managed to develop rapidly without trampling on democracy.

yeah amid all the dictatorships, coups