It is one of the most complicated issues faced by political economic studies for development. Just like other complicated issues, there are those who consider that a minimal level of democracy is required to achieve economic development, while others oppose that view. There are also those who say there is a dialectic and complicated relationship between the two issues.
Hatem Mohsen wrote a good study addressing the different views regarding this topic. As we cannot discuss all the visions here, I will focus only on the vision adopted by most of the southern countries, particularly the Asian tigers and the criticism of them. Mohsen said there is a natural tendency in the democratic system toward a division of power between various stakeholders, both within the state or between powerful groups, which slows down the decision-making process. This has led many analysts to argue that authoritarian regimes in the developing world are probably better than democratic governments when it comes to promoting economic development.
This argument says that development requires a strong independent central government, especially when poor countries need to catch up with developed countries. The democracy policies are simply very chaotic and too unpredictable to provide such development. In the authoritarian system, the country has plenty of time on the horizon, as long as they do not need to worry about the short-term policies used during electoral terms. The Asian tigers’ experience (Korea, Taiwan, Singapore, and Hong Kong) proved that authoritarian regimes are more effective than democratic regimes in accelerating economic development. The countries experienced rapid economic growth and socioeconomic transformation from the 1960s until the 1990s. China and Vietnam have recently approved this tendency.
On the other hand, it is not always certain that the authoritarian ruler will always be interested in playing a positive role in the development process. On the contrary, we have a lot of historical examples in Africa, Latin America, Eastern Europe, and the Soviet Union where governments opposed development. In fact, one of the criticisms of the “development first, democracy second” tendency is that it trusts experimental evidence, which is very limited and selective. It means that predicting a major development in these systems is risky, and it cannot be approved theoretically as the ends justify the means.
Many authoritarian centralised countries that enjoy high independency in decision-making have played a big role in deepening a series of economic disasters. These disasters were either less deep or even possible to avoid if there was effective a democratic mechanism to control the executive authority. This certainly applies to the Mexican peso crisis in 1994, which was one of the biggest disasters in Mexico and the region.
As noted above, the third wave of democracy in the developing world confirms the belief that there is no need for structural preconditions for the emergence of democracy.
On the other hand, there are a limited number of countries which succeeded in democratisation and establishing coherent democratic systems.
Out of this background, many analysts have reached consensus that structural factors, such as institutional and social conditions and cultural inheritance, may have a significant impact on the success of the democratic process. Some say that all democratic nations are wealthy—with the exception of only a few, such as India and Costa Rica.
Moreover, democratic cohesion requires developing a political democratic culture where all main political players are present, whether it’s the public or elites, including political parties, all organised-interests groups, institutions, and powers that accept that democracy is the only game to play.
In other words, the democratic process is the only legitimate way to obtain power.
We must admit that constructing and enhancing this political democratic structure takes a lot of time, which is the main challenge faced by regimes nowadays.
In fact, establishing a link between development and lasting democracy suggests that some views of the modernisation theory may be more useful. Modernisation theory assumes that high levels of economic development contribute to the stability of democracy once it is established because it weakens the polarisation through easing the struggle among social classes, as well as the extremity of political conflicts.
Since increasing development levels decreases inequality, development’s vision to improve politics among people becomes more gradual.
The tolerant moderate political culture is also facilitated through increasing education opportunities, which is a result of modernisation in itself.
Economic development also speeds up the growth of civil society. However, in an ambitious controversial study that looks into the casual relationship between democracy and development in 135 countries (including countries with existing democracies and countries on their way to democracy), during the period from 1990 to 1950, Adam Prizewors and his colleagues (2000) found that while political institutions are important indeed, the type of regime does not have a significant impact on the economic growth, or even on the national income. So the question remains open, and the results of the relationship between the type of the regime and economic development remains unresolved.
The main lesson to learn from this is that different political regimes can apply similar policies, and perhaps due to this reason it becomes necessary to look into the kinds of institutional arrangements (like the two-party system versus the multi-party one), as well as the strategies to develop the government, rather than looking into the type of the regime itself.
Some modern literature has conducted another analysis to understand the effect of a democratic transition on other developmental goals, like poverty, inequality, and corruption. The analysis showed that the positive impacts that resulted from democracy on other fields are neither automatic nor certain. In fact, sometimes they may be negative impacts, as is the case with corruption.
Assuming that it is true that democracy sometimes may result in negative impacts instead of equality and the ability to build a country, more attention must be paid to the policy adopted and its enforcement.
One of the main challenges before donors is to be completely aware of the fact that whenever they choose a certain way to help democracy and enhance development, they must also take into consideration how their activities in a certain field affect other fields, and how this can either impact or be impacted by the state’s effort to build the country. These efforts could be with or against the efforts of democratisation and development, though.
In short, any conclusions on the relationship between democracy and development are not final. There are many different arguments that could be used to support both views: first, those democratic institutions play a crucial role in enhancing development. The second argument is that dictatorial regimes are perhaps more effective in this regard, especially in poorer countries that need quick action.
The debate is far from being settled. The current literate who aims to determine the relationship between democracy and development remains unstable. This only shows how complex the relationship is between the two forces.
Every study provides evidence to prove its argument in terms of the link between the democratic regime, or the authoritarian regime, with development, and each piece of evidence is faced with an opposing one.
