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Does Democracy Deter Development?

by Abdul Bayes
WHILE the world at large la heading fast towards democrat^ governance, with many oi us. suspicion still looms large on the proclivity of such an order In providing faster economic reforms and higher economic growth. The burgeoning skepticism, mostly related to the present-day context of the LDCs and largely aired by the so-called undemocrats" appear to follow from the fact that the theme of pluralism enshrined In a democratic setup usually delays the decisionmaking processes and Implementation schedules pertaining to socio-economic development of the country, in a fashion quite unseen In an autocratic regime. It IS further alleged that, under democracy, the existence of various pressure groups tends to vie for a grip on policy outcomes and thus leaves very little room for quick decisions and actions. As a result, many of the policies and programmes targeted for higher economic growth and social development are. more often than not. either axed or being shelved for distant future under democracy than under autocracy. However, despite volleys of such criticisms people. Including those even of the poorest countries Of the world, breed a love for democracy To them, al times, political free-
It Is often stipulated that in East Asia, reforms came first and then arrived democracy so that the then autocratic rulers could carefully suppress any resistance, whatsoever, arising out of the painful processes. As these countries grew In terms of higher per capita income and lietter longevity of people's life, democracy peeped as the most delicious chocolate to
chew. Thus growth-led democracy is what appears to happen In the case of East Asia and to some extent It is in the offing In some other countries Including China. But in Eastern Europe, former Soviet Union or. say. tn Bangladesh, democracy seems to have ar rived first to welcome reforms so much so that the resistance appears too tough for a nascent democratic regime to swallow In consequence, moat of the reforms needed to promote rapid economic growth tend to remain half hearted producing half-baked results On this score alone, the authoritarianism has a strong populist appeal: No free speech but the train runs on time Thus, there seems to prevail a broad agreement on the proposition that democracy and economic dom seems no less valuable than an economic one although the availability of both would, perhaps, place them on higher frontiers of satisfaction
Why Hate Democracy?
Mr Lee Kuan Yew. one of the world's most successful economic policy makers (who. in fact, set the tone for to-day's Singapore) is reported to have iold a Filipino audience in 1992: "I do not believe that democracy necessarily leads to development. I believe that what a country needs to develop Is discipline more than democracy. The exuberance of democracy leads to indiscipline and disorderly conduct which are Inimical to development".
The above mentioned ob-
servations 'by Mr Lee could perhaps, be duly applauded bv those who are basically (or par tlallyl democracy averse But ironically, in recent times, (he theme Is reported lo have been picked up by some of the western 'democracy-losers' too. They tend to view that the success stories of East Aslan Tigers came out of the carrots of autocratic regimes prevailing In those countries rather than out of the groves of democracy. Stretching the argument a little bit further, the opponents of democracy also tend to cite the success story of China — a country with highest growth rate and least democracy In the world In a similar fashion, the growth rate of Pakistan (a case of infant democracy) is compared with India (a case of adult democracy) or that of to-day's Bangladesh Is compared with its erstwhile autocratic periods. In all of these cases, the haste and fervor with which the undemocratic regimes run economic managements, despite the gloss, are vigorously highlighted Robert Wade of Sussex Institute of Development Studies. while describing Taiwan s political regime and its contribution to economic growth, argued that Taiwan's government was able to intervene intelligently in economic management partly because it was spared popular pressure to Intervene unintel-ligently .... Instead of giving jobs In doomed Industries it could concentrate on policies likely to create new Jobs and new wealth’1
growth (or democracy and economic efficiency) are In conflict or at odds.
Why Love it?
Cross country empirical ev idence tends to show that the above observations are not true or at best these are half-truths The proponents of democracy led development and growth try to cite the examples of Africa. Cuba and. North Korea. If authoritarianism regimes are friendly to higher growth and development, then why are these countries yet to reach a respectable height in terms of per capita income and Human Development Index? Accord Ing to this school of thought, there are atleast four occasions in which democracy edges out autocracy. First, the greatest virtue of democracy is believed to be the security of property rights which hardly persuits under autocracy. Security of property rights is. as one author puts it. more firmly anchored under democracy than under autocratic rules regard for Individual rights Is necessary for lasting democracy and that regard for exactly the same rights Is also needed if there is to be any lasting comnjltment to security of property and enforcement of contracts". Second, a benevolent dictator. It Is argued. may pursue right economic policies and ensure higher economic growth. But what he falls to do Is to guarantee the credibility and sustainability of the reforms uphered by hjm ’’partly because he can suspend them at a moment's
notice and partly because when he dies or steps down he may be replaced by a non benevolent dictator". Not that democracy in spch cases can offer cast-Iron guarantees but it Is plausible to believe that over time democracy entrenches economic freedom, making them more stable and more credible In this way political freedom makes a contribution in Its own right to economic growth' Third, the dead-weight loss of resource allocation or corruption mal practices and nepotism in the society are reported to be on a higher side under autocracy than under democracy Why? Because, democracy forestalls freedom of press and media. Parliamentary committees etc. where there is a perceived threat from public upheaval. But autocrats do not care for these and as such mushroom growth of these vices are alleged. Thus democracy minimizes resource wastage and nepotism while autocracy tends to foam them up.
Fourth, compare the revenue raising objectives of an autocrat and a democrat. The former Is likely to be a revenue-maximizer with very little care for the subjects' left over income. The latter would care for his slice as well as for the distribution of the slice so regenerated. The difference comes from the fact that the former is going to be In power whether his subjects like his policies or not but the latter will have to face his voters after a fixed term. On this account. democracy seems to
have an edge over the autocracy: tax proceeds are shared with voters and the incentive io grab plenty is muted. There are many instances like the above wherein democracy could be projected more productive than undemocratic governments.
Concluding Remarks
1s democracy a deterrent lo or .< detergent of growth and development? Based on cross country analysis, available studies tend to find very little Justification to support the view that democratic governments are worse than non-demo-cratic ones at carrying out reforms As to whether democracy. once in place, inhibits growth, the research is reported to be in conclusive and yes' or no differences are also reported to be statistically Insecure. What is clearly brought to the fore is the fact that "dictatorships with wise economic policies can achieve rapid economic growth: but they are rare and being dictatorship. will lack the economic strengths of stable democracy Far from inhibiting growth, democracy promotes it. East Asian autocratic history of comparatively short period should be given weight but more weight should go on other socio-cultural and ethnic peculiarities as promoters of growth in those countries. Bear in mind, what we have been talking so long is democracy in the real sense of the term and not of the type that Bangladeshis. Pakistanis or even Indians are presented with at the moment If democracy lands on our soils with Its original form, growth and development cannot be far behind. Only then discipline and democracy would not be mutually exclusive events.