D. Potter

From T. Allen (ed.), Poverty and Development into the 21st Century pp. 365-382

 A Summary

In a Nutshell

An exploration of the different lines of thought regarding the effect of democracy on development

 Democracy Stimulates Development

  • Liberal market capitalism and liberal democracy were thought to be a virtuous circle (Washington Consensus). This meant that aid agencies used conditionalities in order to stimulate democracy.
  • Objectors did not argue that democracy were irrelevant to development, only that there was an abjection to the notion that there was one neoliberal formula of “right” economic and political policies that could stimulate development at any stage of a countries growth trajectory.

 Democracy Impedes Development in Poor Societies

  • Popular with leaders, particularly from the east (Yew thesis). The idea is that what a poor country needs is discipline not democracy as democracy leads to disorder. This is because in advanced democracies although governments may change, there is little threat to the broad group of established powers that they will be wiped out. No group will commit to the democratic process if it feels it will be excluded by it. Developmental states on the other hand involve a radical and turbulent process of structural change and redistribution. This generates many new political interests. Thus is the state is democratic, as change may only be incremental (as that is all the elites will agree to), development will be retarded. If states are authoritarian they have the strength to make the structural changes necessary for development. [Does this totally ignore the history of the UK?]
  • For example the extreme poverty of India where nearly 40% of people are landless could potentially be solved by land reform, however the democratic process does not allow for reform that would radically change the interests of the powerful. Elections are too blunt a tool for such reform.

 Authoritarian Regimes Perform Better in Poor States

  • This view was popular in the cold war.
  • This view was shown to be nonsense by Przeworski et al. who showed that of the large sample of authoritarian regimes they tested, very few grew economically.
  • There were exceptions of course in Taiwan and Korea. Yet perhaps it could be that these are simply examples of effective developmental states that featured a dedicated developmental elite, relative autonomy of state apparatus, insulated economic bureaucracy, weak civil society, and able to trade off a level of repression with real material benefits.
  • Some then argue that authoritarianism combined with devlopmentalism can work best in poor societies. Others retorted that that type of regime only occurred in East Asia due to a very special and non-transferable set of historical conditions.

 Democracy Unrelated to Economic Growth

  • Prezworski & Limongi found that economic miracles happened in both democracies and authoritarian regimes. Thus is does not seem to be democracy per se that makes the differences so much as something else, not yet identified. Political institutions probably matter for growth but thinking only in terms of regime does not seem to capture the relevant differences.
  • This analysis was based on econ growth, whereas some want to include political liberties and well-being as part of the definition of development (Sen etc.)
  • Others argue that what is important is not the type of regime, but the type of governance (Huntington). Good governance was recognized by the World Bank as important and is central to creating and sustaining an environment where development is possible. [And providing some sort of stability of decision making – people act differently when they are scared (North), and institutional equilibrium is important for regularizing activity by delimiting potential response patterns (O’Donnel). Without that kind of stability growth of any kind should be very difficult. Thus it could be the swings between types of state that are most damaging (Latin America).]

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