Dani Rodrik on the relationship between income and democratic credentials. I don't think people deny that democracy and prosperity co-evolve along the “virtuous” development path, what they dispute is whether there is any evidence that democracy has a causal effect on income (or indeed vice versa). Some of the evidence appears to show countries have embarked upon different development paths, most likely at some "critical junctures" with diverging paths. My view is that the quest to establish causality between income and democracy is fruitless, better to find unity with Sen’s conclusion that democracy has 'intrinsic value' and important in it's own right.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.
Thursday, 26 August 2010
The myth of authoritarian growth?
THEMES : growth