Does Economic Growth Create Democratic Societies?

I’m in a development mood right now, having had a conversation with someone over whether the American democratic model is portable to other cultures. Let me ramble on about democracy and development for a while.

I say yes, with caveats, of course. There are certainly things about American style democracy that are peculiarly American. Our intense emphasis on property rights being the main candidate. Outside of that, I can see no reason why the American model isn’t transferrable elsewhere, and would even argue that an American (or western style) democracy is not peculiarly Western, but rather a natural outcome of economic growth.

Benjamin Friedman, a Harvard economist, writes in “The Moral Consequences of Economic Growth“:

Economic growth—meaning a rising standard of living for the clear majority of citizens—more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness, and dedication to democracy. Ever since the Enlightenment, Western thinking has regarded each of these tendencies positively, and in explicitly moral terms.

I tend to agree with this. Persons who participate in an economy also participate within a system that requires them to step outside their small circles of family and friends. They are forced to rely not merely on one another, but rather must negotiate and interact with persons they may not know, and may not even like. Old hierarchies become meaningless, as the nature of jobs and value become fluid. A King may be necessary today, but useless tomorrow. Most salient, violence and force, which are both wholly un-democratic, become less attractive when one has something to lose.

Interestingly, one researcher has found the same result, that GDP leads to democracy, but that these effects were weaker than that of primary education:

Over the last two centuries, many countries experienced regime transitions toward democracy. We document this democratic transition over a long time horizon. We use historical time series of income, education and democracy levels from 1870 to 2000 to explore the economic factors associated with rising levels of democracy. We …nd that primary schooling, and to a weaker extent per capita income levels, are strong determinants of the quality of political institutions. We …find little evidence of causality running the other way, from democracy to income or education.

The interesting piece here is that, in most contexts, primary education is a state-provided service. Thus, using public funds (socialism!) to allow near universal education can actually enable the creation of democratic states. I would argue here, that the authors are taking a narrow view. I believe, though cannot test it, that it is not education, but rather women’s education that creates democratic states.

The development – democracy theory, however, can be countered when one considers mostly undeveloped India. India has a GDP lower than that of Ghana and Papua New Guinea, but is a functioning republic, with disparate, linguistically diverse and culturally heterogeneous states that don’t kill one another after elections. Amartya Sen, an Indian economist, is a devoted believer in democracy as a universal and essential system:

India, of course, was one of the major battlegrounds of this debate. In denying Indians independence, the British expressed anxiety over the Indians’ ability to govern themselves. India was indeed in some disarray in 1947, the year it became independent. It had an untried government, an undigested partition, and unclear political alignments, combined with widespread communal violence and social disorder. It was hard to have faith in the future of a united and democratic India. [End Page 5] And yet, half a century later, we find a democracy that has, taking the rough with the smooth, worked remarkably well. Political differences have been largely tackled within the constitutional guidelines, and governments have risen and fallen according to electoral and parliamentary rules. An ungainly, unlikely, inelegant combination of differences, India nonetheless survives and functions remarkably well as a political unit with a democratic system. Indeed, it is held together by its working democracy.

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About Pete Larson

Assistant Professor of Epidemiology at the Nagasaki University Institute for Tropical Medicine

3 responses to “Does Economic Growth Create Democratic Societies?”

  1. stumpwater says :

    I hope I have time later to respond to this with the thoughtfulness it deserves — there are several good points here — but I do want to say that I find any study which uses GDP as the primary indicator of economic health to be fundamentally flawed. I believe that will be understood without further explanation — if not, then I suppose that’s a whole ‘nuther conversation. But I think it needs to be said here, regardless.

  2. Pete Larson says :

    I absolutely agree. Using GDP is merely a matter of convenience,as people are already quite familiar with it. There are others, the HDI being one of them.

    Joe Stiglitz wrote a great book on it, to which Amartya Sen is a contributor, called “Mismeasuring Our Lives”:

    “Mismeasuring Our Lives is the result of this major intellectual effort, one with pressing relevance for anyone engaged in assessing how and whether our economy is serving the needs of our society. The authors offer a sweeping assessment of the limits of GDP as a measurement of the well-being of societies—considering, for example, how GDP overlooks economic inequality (with the result that most people can be worse off even though average income is increasing); and does not factor environmental impacts into economic decisions.

    In place of GDP, Mismeasuring Our Lives introduces a bold new array of concepts, from sustainable measures of economic welfare, to measures of savings and wealth, to a “green GDP.” At a time when policymakers worldwide are grappling with unprecedented global financial and environmental issues, here is an essential guide to measuring the things that matter.”

    It’s a small book and worth the read.

  3. stumpwater says :

    Sounds great — thanks for the recommendation!

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