When we look at systematic historical evidence, instead of individual cases, we find that authoritarianism buys little in terms of economic growth. For every authoritarian country that has managed to grow rapidly, there are several that have floundered. For every Lee Kuan Yew of Singapore, there are many like Mobutu Sese Seko of the Congo.
Democracies not only out-perform dictatorships when it comes to long-term economic growth, but also outdo them in several other important respects. They provide much greater economic stability, measured by the ups and downs of the business cycle. They are better at adjusting to external economic shocks (such as terms-of-trade declines or sudden stops in capital inflows). They generate more investment in human capital – health and education. And they produce more equitable societies.
Authoritarian regimes, by contrast, ultimately produce economies that are as fragile as their political systems. Their economic potency, when it exists, rests on the strength of individual leaders, or on favorable but temporary circumstances. They cannot aspire to continued economic innovation or to global economic leadership.
That is Dani Rodrik in Project Syndicate.
Economies must not only weather shocks and business cycles; if successful, they must weather growth as well. Each implies shifts in economic power, and it’s these shifts in power that authoritarian regimes seem handle so poorly and democracies… less poorly.
If I had to speculate, I’d guess the stronger, more flexible authoritarian regimes are ones that are rooted in parties rather than personalities, and in places that start with a large professional class available to become technocrats–spreading power and decision-making among more bodies.
Ultimately, it’s hard for me to see how an authoritarian nation (other than a small enclave like Singapore) can handle the rapid growth of wealth in both a industrial middle class and an industrial elite. It’s not the new, authoritarian political equilibrium that seems unstable, it’s the transition between the new and the old that seems fraught with peril.
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East Asian countries never started off with democratic institutions (as in the instituions written in theory) but with largely development-centred governments (an exception is the Philippines). But even back then, Western countries themselves were hardly democracies (the US still had no voting rights for the African-Americans, women wre’nt in parliament). Yet all those countries headed off with high economic growth rates–East Asian countries surpassing the West in fact.
Today, Japan has only eased out of a one dominant party state, South Korean democracy is still plagued with corruption (as is Taiwan) ASEAN countries are defintiely not democratic in western sense. Yet all of them are on eqaully and evne higher economic ground that the large deficit/debt OECD countries.
Rodrik has to consider this.
Justin – I agree, and would go further. There is no rule. China – authoritarian; Japan was effectively a one-party state for much of its growth years, and in the 1930s when the foundations for this were laid it was a fascist state with a terrible record for detention without trial; Hong Kong was an undemocratic colony for most of its best years; Taiwan was also ruled pretty undemocratically.
The binary classification of ‘authoritarian’ and ‘democratic’ is nowhere near refined enough to be analytically useful.
Take a look at South Korea, the idea that authoritarianism is always bad for growth would be nice, but unfortunately the history of South Korea proves to be an exception to the “rule.”
Disclosure: Singaporean here!
(1) While it may be apparent that most democracies are correlated with positive outcomes (health, wealth, etc), what are actually the CAUSAL MECHANISMS that connects democracy to these positive outcomes?
(2) Rodrik sees regime types (at least as he argued in the linked article) as a dichotomy – authoritarian or a democracy (market-intervening or market-freedom). That is far far far too simplistic. I argue that it is quite archaic argue in terms of a zero-sum game between state and market. There are various types of authoritarianism and various types of democracies, both with a variety of state-market relationships. It is more about how the state structures its relationship with the market.
(3) See Dan Slater. 2009. “Revolutions, Crackdowns and Quiscence: Communal Elites and Democratic Mobilization in Southeast Asia.” American Journal of Sociology. 115(1): 203-254 for a study on why some revolutions succeed, why some revolutions fail and why some countries like Singapore and Vietnam have hardly any mass democratic mobilizations at all. Great insight into authoritarian regime durability.
How about if democracy threatens the survival of states? This is a concern more so in Africa where it appears to be the case that states can be formed and sustained on foreign aid. We can not sale democracy only for its economic worth (even allowing that it significantly promotes economic well being) while overlooking other attributes we have a society.
You’re very right to focus on transition. It seems that very few economists do. Development is not an improvement of an existing system, but the creation of a new, more dynamic one. Authoritarian regimes (or rather, regimes with more restricted interest groups) might be better at starting that change, since it will initially favour a small group – and they can choose the group. As you say, once the gains generalise, it becomes harder for the restricted system to perpetuate itself.
Lee Kuan Yew actually travelled around in Africa as a young man, and was like these guys are doing it all wrong. Yew kind of gets that economic freedom is important, including respect for property right and rule of law (except for criticism of the regime) and that has helped Singapore a lot.
Mr Rodrik published an erratum in its own blog: <>
Anyway my question is what a democracy really is. I see most democracies, including western’s, do not fit to Rousseau definition. I am living in Turkey and if democracy was working correctly if not perfectly since the last 50 years the actual governement shows more tendency to use democracy as a tool to achieve selfish goals. Democracy should serve the good of the whole not of the majority and in this way as you mention I agree that technocratic autocracies may perform better. It is not enough to have a parliement and election to be a democracy.
It seems a bit fatuous to compare Singapore and DRC as Rodrik does. Even if just as an example, the huge disparities in the starting points of these countries would explain a lot of the future variance. Such comparisons give the lie to this kind of broad cross-country analysis. I think your comment about ‘more successful’ authoritarian regimes is closer to the mark than Rodrik, but as LvP comments, this is one area where I suspect political science can teach us a lot more than glib economics regressions.
The more pertinent question is to ask whether for a particular country, now, authoritarianism might be a better bet for economic development. More of my recent musings on this subject available at http://bottomupthinking.wordpress.com/2010/08/11/democracy-authoritarianism-and-development/.
Kagame seems to be up for your challenge.
There’s a huge political science literature on the flexibility and stability of authoritarian regimes, differentiating between party, personalist, and military variants. No need to rely on speculation!