Democracy And Development Essay ⋆ Political Science Essay Examples ⋆ EssayEmpire

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Does democracy cause prosperity, or do prospering nations develop democratic structures? How far do critical junctures in history determine both a society’s economic development and its level of democracy? While these questions have occupied a central place in modern comparative political economy, they, nevertheless, remain highly disputed. The starting point of this ongoing debate lies in the strong correlation between the level of democracy and different measures of economic prosperity. Societies equipped with democratic institutions— such as free and fair elections, a free press, and checks and balances among the executive, the legislative, and the judicial branches—are on average better off economically than those with more autocratic structures.

Modernization theory provides the traditional explanation for this correlation. Economic prosperity strongly augments the likelihood for a society to develop democratic structures. From a more cultural perspective, citizens of prospering societies slowly change their political behavior and attitudes. As a consequence of rising education levels, citizens tend to develop a political culture more receptive to political participation and tolerance, crucial elements for the emergence and stability of democracy. Increasing education also improves citizens’ capacity for monitoring political processes and articulating demands toward the government, both factors constructive for democracy. Finally, there is an economic argument that relates economic modernization to democratization. In developed and diversified economies, the tax base of the state will increasingly depend on the middle classes and educated labor. But diversified taxation comes with the diversified demand of political representation. Thus, modern economies augment the likelihood of a prodemocracy bargain between citizens and the state actors. Citizens grant the state the privilege to tax only if the state is organized in a way that allows citizens to participate in the decision-making process on how public resources are spent.

While modernization theory has gained empirical support, especially with regard to the impact of education, more recent studies have carved out evidence that points toward an economic dividend of democracy. On average, democratic countries provide more public goods—such as education, health, the rule of law , and productivity-enhancing policies—than autocracies provide. The underlying theoretical argument states that autocracies and democracies differ with regard to their societal support. These differences result in different incentives for economic policy making. Autocratic regimes generally depend on a relatively small fraction of society—for example, the military, bureaucracy, or mighty oligarchs—and exclude the majority of citizens from political participation. Such a setting enables the government to supply itself with huge economic privileges. To maintain the regime, it is more rational for autocratic leaders to engage over proportionally in the distribution of economic privileges (rents) to the small distribution coalition than in providing development-promoting public goods for the majority.

In contrast, democratic governments need much broader support for political survival. Accordingly, they will find it rational to invest their resources overproportionally in nonexclusionary public goods that benefit large fractions of society. Therefore, the different incentive systems of different kinds of political order have strong implications for public policy making, which strongly affects overall economic development. Still, this theoretical perspective does not neglect the possibility of development under autocratic rule and makes a case for a more gradual differentiation between the economic impact of different levels of democracy and autocracy.

Finally, there is a third alternative for explaining the correlation between democracy and development; it focuses upon the importance of crucial events in history. Accordingly, the correlation between democracy and development is a result of endogeneity. The emergence of democracy and economic development are both caused by crucial events in a society’s past. Historic path dependency becomes a critical factor from which single countries cannot easily escape. For instance, the varying quality of political institutions and the different levels of economic development in developing countries today are said to be heavily influenced by different types of colonization dating back centuries. Therefore, societies’ political and economic development reflects critical junctures in history that are difficult to neutralize by “ordinary” political changes. While it is certainly true that history matters, the difficulty consists in making terms such as critical junctures or path dependency operational. What kind of historic events constitute tipping points that drive a society toward a new pathway from which it cannot easily deviate?

Altogether, the debate about democracy and development can easily appear as a whirlpool of interdependencies, where different scientific schools fiercely defend their claims. These competing perspectives have, nevertheless, generated most valuable insights about the relations between politics and economics. Today, the challenge consists in providing more fine-tuned explanations for the correlation between democracy and development that provide context sensitivity and show under which specific conditions the different theoretical approaches are of particular importance.

Bibliography:

Acemoglu, Daron, Simon Johnson, James A. Robinson, and Pierre Yared. “Income and Democracy.” American Economic Review 98, no. 3 (2008): 808–842.
Faust, Jörg. “Democracy’s Dividend: Political Order and Economic Productivity.” World Political Science Review 3, no. 2 (2007): 1–28.
Inglehart, Ronald, and Christian Welzel. “What Do We Know About Modernization Today?” Foreign Affairs 88, no. 2 (2009): 33–48.
Lake, David, and Matthew Baum. “The Invisible Hand of Democracy: Political Control and the Provision of Public Services.” Comparative Political Studies 34, no. 6 (August 2001): 587–621.
Lipset, Seymour. “Some Social Prerequisites for Democracy: Economic Development and Political Legitimacy.” American Political Science Review 53, no. 1 (1959): 69–105.
Olson, Mancur. “Dictatorship, Democracy and Development.” American Political Science Review 87, no. 3 (September 1993): 567–576.