Dr. Hassnain Javed
June 29, 2018
Throughout the ages, it is has been easy to identify the faults in democracy. Plato has equated democracy with anarchy, uncertainty, or either mob rule and further explained it is as the second worst degree of government after autocracy. Likewise, Aristotle was less critical but still had a disbelieving view with regard to democratic processes. Moreover, many contemporary Western philosophers including Montesquieu, Rousseau, and Nietzsche were also somewhat, critical of democracy.
This viewpoint was quite common even before the current woes of democracy. In the current world, democracy’s rap sheet is a bit longer than usual. It is often associated, in fact, blamed for congestion, ineffectiveness, and inability to reform and with obvious elections of flawed characters. With all of the stated issues, it is no longer a surprise that democracies do face economic problems.
But, there are instances when democracy played a significant role in economic growth and development. The example of South Korea explains it.
Generally, South Korea’s growth miracle is often associated with the authoritarian leaders of the 1960’s, which includes General Park Chung-hee. He is primarily associated with directing the country’s state-based industrialisation. But the country experienced a downfall in 1980 when it had reached per-capita income of only about one-third of Japan’s. It was followed by large student protests, trade unions and pro-democracy protests. It finally marked the end of military government in June 1987 which led to approximately 5 percent annual growth in the next two decades.
On the flip side, isn’t the nondemocratic China considerably the greatest growth miracle of all time? Many analysts are of the opinion that democracy not good for growth. Aren’t democracies mostly associated with poor implementation of reforms that can trigger to economic growth for instance tackling corruption or restructuring monopolies? Isn’t democracy less likely to function in a poor or low education society and aren’t its economic implications known to lead to major disaster? In addition, aren’t all the dilemmas in democratic societies around the globe representing proof of its flawed nature?
It is true that China’s growth is impressive and it is difficult for democratic societies to catch up to it. However, compare China’s growth from the late 1970’s when its income per capita was less than $300 a year with that of Germany or US, and you see that it is a specifically egregious case. The real question is whether Germany would have experienced faster growth in the last two decades being a nondemocratic country and China would have suffered from poor growth rates if it had been democratic?
Such questions are always difficult to address and require statistical support to analyse how growth patterns would have proceeded if the political regime of the country had been different. A simple cross-country comparison reveals the growth deficit of non-democracies.
The misguided view that democracy is not good for growth has many sources. Firstly, most of them are based on causal comparisons of the growth experience of some democratic nations with non-democratic nations for instance comparing China with western economies rather than presenting a careful and detailed statistical analysis.
Secondly, it is important to note that nondemocratic regimes often experience failure when the economy caves in. Thus, democracies often inherit an economy in turmoil. Therefore, making a comparison of an economy few years after democratisation to several years before the advent of democracy will have probability to give a misleading picture of what exactly democracy indicates for economic vibrancy.
Lastly, reverting to Plato and Aristotle, many other intellectuals who have often been doubtful of democratic decision-making generally streamline the weakness of democracy while ignoring its success.
Moreover, there is a shared view that democracies are bad at economic reforms and they are often backed up with the arguments that you need the firm grip of a dictator to push reforms through in a way that General Augusto Pinochet did in Chile after overthrowing the democratically elected government of Salvador Allende in 1973. In modern era, a lot of people are in favour of authoritarian governments with the argument that there are better able to implement tough reforms in comparison to democratic government.
However, the reality is the complete opposite. Through diversity of areas, democracies are more likely to adopt market friendly reforms. Whenever a country democratises, it often moves towards a battery of reforms while undergoing a variety of inefficient regulations and monopolies instilled by its previous nondemocratic regime.
Primarily, because of these reforms and because of other economic and social changes which democracy brings along, there is a steady increase in investments, which are collectively responsible for the growth in the following years after the onset of democracy. Besides this, democracy is noteworthy in increasing taxes and spending more on education and health along with preparing economies to achieve greater productivity in the decades to come.
American Economist Richard Posner suggested that when electorate is poorly educated or either when the economy is not yet modern, democracy will face greater difficulties and at certain instances its negatives might well outweigh the positives. On the contrary, the data shows something different — democratisation even in low-income and low-education countries appears to lead to faster growth rates. Therefore, it should not be proposed that some countries are not yet ready for democracy.
Furthermore, it cannot be said that nondemocratic governments will experience smooth transitions to democracy. Democracies, in real terms, demand work and will also face headwinds because the idea of democracy is often threatening to powerful international actors such as Russia and China today.
Moreover, some of the major problems attached with a democratic system are internal rather than external. Democracy gives birth to both losers and winners. After all, the weaker groups fall prey to giving higher taxes and few are unhappy after an end to their monopolies. These tensions aggravate when the losers are powerful enough to undermine democracy and generally, this is the main reason behind why democracies fail to operate.
Likewise, democratic politics also becomes difficult to practice during times of hardship when natural forces leading to polarisation are showing resistance to compromise, which is an integral pillar of democracy.
This piece does not aim to criticise democracy, rather it seeks to support it. Democracy has its problems but it is the only viable option. In summation, Churchill’s famous thoughts on democracy explain better than I can: “No one pretends that democracy is perfect or all wise. Indeed it has been said democracy is the worst form of Government, except for all those other forms that have been tried from time to time.”