Democracy and Economic Development : Are they related ?

Does economic development lead to political democracy? Or does political democracy generate economic development? Through reviewing literature of political economy of development, this study attempts to show audience at least five possible patterns and theoretical explanations of the connections between development and democracy. They are: 1) development first, democracy later, also modernization theory, 2) political change process, 3) development not leads to democracy, 4) democracy first, development later, and 5) democracy not matters in development. Furthermore, I point out that in the process of democratization economic development varies from stage to stage: it declines in the early phrase, but increases in the later; investigating economic change corresponding to political transition is critical to reconsider the causality between development and democracy. Lastly, I conclude that the controversy over development and democracy is inconclusive and will be continuing.

1999

Most of us, ardent democrats all, would like to believe that democracy is not merely good in itself, it is also valuable in enhancing the process of development. Of course, if we take a suitably broad concept of development to incorporate general well-being of the population at large, including some basic civil and political freedoms, a democracy which ensures these freedoms is, almost by definition, more conducive to development on these counts than a non-democratic regime. We may, however, choose to look at freedoms as potentially instrumental to development, as is usually the case in the large empirical literature that aims at finding a statistical correlation between some measure of democracy and some measure of a narrower concept of development (that does not include those freedoms as an intrinsic part of the nature of development itself). I have in general found this empirical literature rather unhelpful and unpersuasive. It is unhelpful because usually it does not confirm a causal process and the results often go every which way. Even the three surveys of the empirical literature that I have seen come out with three different conclusions: One by Sirowy and Inkeles (1991) is supportive of a negative relationship between democracy and development; one by Campos (1994) is of a generally positive relationship; and the one by Przeworski and Limongi (1993) is agnostic ("we do not know whether R. Wade, Governing the Market: Economic Theory and the Role of the

Sustainability

Democracy has both a direct and an indirect relationship with sustainable development. Democracy is related to the movement toward long-term economic development directly, and indirectly, democracy can provide the means to create the institutional structures needed to create links between the political systems, the culture of participation, and the social values of a society. Since economic development is a multidimensional concept and one of its primary requirements is to achieve a high level of income and appropriate economic growth, knowing the relationship between democracy and economic growth is especially important for policymakers. Many important questions are raised about the relationship between democracy and economic performance. What is the relationship between democracy and economic growth? Is this relationship different in developed countries and developing countries? Considering the effects of democracy and economic growth on the welfare of communities, the main purpos...

2006

Does democracy promote economic development? Despite many attempts to address this question, the answer remains elusive. Richer countries are generally democratic. But this cross country correlation could reflect reverse causation or omitted variables. Evidence that political regime changes produce subsequent economic growth is considerably weaker. Does this mean that political regimes have no systematic influence on economic development? Not necessarily, but-given the data limitations-such causal effects are difficult to identify from the within-country variation. A plausible reason for this difficulty is that "democracy" is too blunt a concept. Democracies and autocracies come in various forms, and regime changes come about in various circumstances. If this heterogeneity is not random, the correlation between specific features of political reforms and their occurrence makes it hazardous to estimate an average causal effect on economic growth, or other outcomes. This paper illustrates three specific instances where the details of democratic reform influence the effect on economic outcomes. Section I of the paper clarifies our empirical strategy. Section II zooms in on political

Many social scientists, particularly in North America, believe that democracy hinders development. This paper discredits this obscure opinion by clarifying the conceptions of democracy, capitalism and development: Democracy, the theory of a political system of the non-communist state, is founded on the political wisdom that people are the sovereign authority of the state, and government, which executes this sovereign power, is their deputy. Capitalism, the economic system of the non-communist state, rests on the belief that an economy prospers rapidly if individuals are allowed to own and accumulate private property, because human beings are selfish by nature. Development is the performance of capitalism. Since democracy promotes individual’s liberty, including the right to own and accumulate private property, it is supposed to be most agreeable to capitalism - the most trusted model of affluent society.

It is reasonable to declare democracy is a good concept because it offers free human choice and it furthers the good of political participation. But there is a debate between democracy and development as concept, about the effects of democracy on the development process and vice versa, some argue, for example, that the experiences of Korea, China, and Indonesia that a strong authoritarian state is better able to engineer a successful process of development than a democracy (because of its ability to discipline fractious demand groups).this leaves a large debate on the relationship between the two concepts.

2007

This paper reconsiders a long-held view that democracy is a hindrance to economic development, at least in its early stages, and, further, that authoritarianism works better than democracy, because it allows the state to mobilize more effectively the resources necessary for industrial take-off. The different experiences of India and China would appear to reinforce this conventional wisdom. The Economist sums it up thus: A proudly democratic India that grows at 6% a year should be congratulated for having succeeded better than a brutal anti-democratic China which grows at 10% a year. I suggest reasons to be sceptical of this view, and argue, to the contrary, that democracy will, in the medium to longer run, promote, rather, than retard, economic development, and predict that the future experiences of India and China may bear this out. This is quite apart from the philosophical consideration that democracy and liberty are intrinsic, not merely instrumental, to the process of development.

Most of the countries of Asia achieved independence from the colonial rulers during 1940's and 1950's. After the independence, most of these countries adopted democratic system of government. However, some countries either turned into authoritarian rule, open dictatorships or military junta. In this backdrop the aims and objectives of the paper is to answer the question that what should come first-Democracy or economic growth? Should the government give pre-eminence importance to civil-political rights, liberty and freedom, get the consent of its citizens for government policies; or prefer to remove poverty, hunger, unemployment illiteracy, misery of the people and provide economic growth through an authoritarian regime. The specific objectives of the paper is to understand the relationship between political institutions and economic development, to focus on the debate which institutions matter most for development: states, nations or regimes and to compare Western experiences of political and economic development with those of developing countries today. The study undertaken is basically qualitative in nature based on secondary data. Certain research questions have been raised in the study and attempt has been made to obtain answer to these questions. Findings of the study are both positive and negative. Political stability is a crucial for economic growth. Stability means a predictable political environment, which in turn attracts investment, both internally and from outside. Democracy provides political stability. Democracy has an intrinsic value and an instrumental value. It plays an important role in the creation of value and norms. On the other hand scholars who do not see any democratic values that support economic growth. They say that the main purpose of economic growth is to promote economic rights only. Democratic rights and freedoms hamper economic growth and development. This view is called as the 'Lee Thesis' after former Singapore Prime Minister Lee Kuan Yew who was an ardent proponent of it. If people are given a choice between political freedom and fulfilling economic needs, people will invariably choose growth to rid themselves of economic misery and deprivation. They would not care for democracy. Liberal political freedoms are a western cultural priority and obsession, and culturally it is not that important for some cultures like those to be formed in the middle-east and Asia. The so called Asian Tiger economies are less than democratic to quite dictatorial. The Future Scope is that it will familiar us with the major debates about how different institutions matter for development.