Nepali Times
The myth of authoritarian growth


The relationship between a nation's politics and its economic prospects is one of the most fundamental, and most studied, subjects in all of social science. Which is better for economic growth: a strong guiding hand that is free from the pressure of political competition, or a plurality of competing interests that fosters openness to new ideas and new political players?

East Asian examples (South Korea, Taiwan, China) seem to suggest the former. But how, then, can one explain the fact that almost all wealthy countries (except those that owe their riches to natural resources alone) are democratic? Should political openness precede, rather than follow, economic growth?

When we look at systematic historical evidence, instead of individual cases, we find that authoritarianism buys little in terms of economic growth. For every authoritarian country that has managed to grow rapidly, there are several that have floundered. For every Lee Kuan Yew of Singapore, there are many like Mobutu Sese Seko of the Congo.

Democracies not only out-perform dictatorships when it comes to long-term economic growth, but also outdo them in several other important respects. They provide much greater economic stability, measured by the ups and downs of the business cycle. They are better at adjusting to external economic shocks (such as terms-of-trade declines or sudden stops in capital inflows). They generate more investment in human capital, health and education. And they produce more equitable societies.

Authoritarian regimes, by contrast, ultimately produce economies that are as fragile as their political systems. Their economic potency, when it exists, rests on the strength of individual leaders, or on favorable but temporary circumstances. They cannot aspire to continued economic innovation or to global economic leadership.

At first sight, China seems to be an exception. Since the late 1970's, following the end of Mao's disastrous experiments, China has done extremely well, experiencing unparalleled rates of economic growth. Even though it has democratized some of its local decision-making, the Chinese Communist Party maintains a tight grip on national politics and the human-rights picture is marred by frequent abuses.

But China also remains a comparatively poor country. Its future economic progress depends in no small part on whether it manages to open its political system to competition, in much the same way that it has opened up its economy. Without this transformation, the lack of institutionalized mechanisms for voicing and organising dissent will eventually produce conflicts that will overwhelm the capacity of the regime to suppress. Political stability and economic growth will both suffer.

Still, Russia and China are both large and powerful economies. Their example can sway leaders elsewhere to think that they can aspire to economic ascendancy while tightening the screws on domestic political opposition.

For the true up-and-coming economic superpowers, we should turn instead to countries like Brazil, India, and South Africa, which have already accomplished their democratic transitions and are unlikely to regress. None of these countries is without problems, of course. Brazil has yet to recover fully its economic dynamism and find a path to rapid growth. India's democracy can be maddening in its resistance to economic change. And South Africa suffers from a shockingly high level of unemployment.

Yet these challenges are nothing compared to the momentous tasks of institutional transformation that await authoritarian countries. Don't be surprised if Brazil leaves Turkey in the dust, South Africa eventually surpasses Russia, and India outdoes China.

C Project Syndicate

Dani Rodrik is professor of political economy at Harvard University's John F. Kennedy School of Government and author of One Economics, Many Recipes: Globalisation, Institutions, and Economic Growth

The End of History Comes to Tunisia

Pierre Buhler

Tunisia's Jasmine Revolution is still unfolding, but we can already read into it lessons about democracy and democratization that extend far beyond the Maghreb.

To set the Jasmine Revolution in historical perspective, we must recall June 4, 1989 that pivotal Sunday when the Poles voted the communists out of power and, at the other end of the Eurasia, the Communist Party of China crushed a burgeoning democratic movement on Tiananmen Square. In retrospect, that day looks like a fork in the road of human history. One path led to the demise of communism and a new birth of freedom and democracy at times bloody and painful in Europe. The other path traced an alternative course, with China remaining under the grip of its ruling party, but delivering prosperity to its impoverished masses through astounding and sustained growth.

As the revolutionary year of 1989 was unfolding, Francis Fukuyama, presciently yet controversially pondered whether the path chosen in Europe heralded the end of history. Following Hegel, Fukuyama made the case that history is directional that it is leading somewhere for two reasons. First, the ceaseless spread of technology and of the economic liberal order, which has a homogenizing effect. Second, the Hegelian struggle for recognition has been a pervasive driving force of mankind, powerful enough to lead countless individuals to the ultimate sacrifice.

But, while a widespread consensus held that communism was nothing but a dead end, China's economic success, and the authoritarian backlash in Russia following Boris Yeltsin's departure from the Kremlin a decade ago, prompted a more pessimistic analysis. Theories of democratic rollback and of a resurgence of authoritarian great powers
surfaced to unveil the potential of systems that combined nationalism and state-led growth-yielding capitalism.

Some argued that authoritarian rule provided a much surer and safer path to welfare than democracy could offer, others extolled the virtues of Asian values, and still others argued that democracy in the Arab or Muslim world would only pave the way for Islamic fundamentalists to take power. Not surprisingly, autocrats everywhere embraced such views.

But the message of Tunisia's Jasmine Revolution rings loud and clear: democracy and the liberal political order in which it is rooted is not merely a Western concept (or a Western conspiracy), but holds universal attraction, powered by the craving for recognition. Moreover, it can be accessed at an early stage of a country's modernization.

To be sure, authoritarian rule can manage the early stages of industrialization. But a knowledge economy cannot operate with muzzled minds. Even the smartest authoritarian rulers are unable to manage complexity on this scale not to mention the corruption that inevitably breeds in the protected shadows of autocracy.

Challenging the myth of the autocratic revival,the American political scientists Daniel Deudney and John Ikenberry have examined China and Russia, finding little evidence for the emergence of a stable equilibrium between capitalism and autocracy such that this combination could be dignified as a new model of modernity. While neither country qualifies as a liberal democracy, both are much more liberal and democratic than they have ever been, and many of the crucial foundations for sustainable liberal democracy are emerging" one main hurdle being the centrifugal forces that democracy might unleash.

But most countries that are unburdened by such a threat have, quietly or spectacularly, rallied to the liberal order over the past decades. Asian countries such as Japan, South Korea, Taiwan, and Indonesia have done so without being hampered by their supposed Asian values.

Similarly, Latin America, once the playground of myriad /juntas/ and /golpes/, is now largely anchored in political liberalism. Turkey is ruled by a mildly Islamist party that plays by the rules of democracy. And, in the spring of 2009, the presidential campaign in Iran evinced a formidable craving for freedom.

What is obvious from these cases is that development activates the two channels that Fukuyama identifies as shaping the direction of history: cumulative economic and technological change and the desire for recognition. Both foster individual empowerment, which is the gateway to freedom and democracy. The paths differ between countries, setbacks are not uncommon, and it can take decades, but the leap can occur when the circumstances are ripe as in Tunisia.

Indeed, the Jasmine Revolution embodies all the tenets of the liberal political order that the West has been advocating since the Atlantic Charter of 1941: a yearning for freedom, opportunity, and the rule of law. Moreover, Tunisia's revolution was indigenous, not imported as part of some forcible regime change.

The Tunisian people, led by a frustrated middle class that refused to be cowed, thus provide a healthy reminder of the steady and compelling forces driving the behavior of individuals and nations nowadays. They illustrate the catalytic effect of digital connectivity (clearly visible, too, among China's twittering classes. And they might embolden other Arab peoples, as may be happening in Egypt, to force accountability upon their rulers.

Whatever the outcome in Tunisia, those who believe that democracy, to paraphrase Woodrow Wilson, makes the world a safe place and that more democracy makes it safer" have every reason to rejoice at such an auspicious development.

C Project Syndicate /Institute for Human Sciences

Pierre Buhler, a former French diplomat, was an associate professor at Sciences Po, Paris.

1. arty
India outdoes China?  Unlikely, even in the best of scenarios.  India can't do a single task without mass corruption (telecom spectrum allotment, commonwealth games, etc.).  Meanwhile, China doesn't mess around and executes those who are corrupt and dazzles the world with the Olympics.  China puts a man in space.  India's  second attempt to launch its Geosynchronous Satellite Launch Vehicle (GSLV) end up being a 125 crore fireworks display as it is destroyed five minutes after lift-off.

No doubt, India is making progress.  But make no mistake: the industriousness of the Chinese far outshines the quintessential Indian mentality of, "Aray, chalta hai, yaar". 

2. farty

China will the sprint but India will win the marathon.

Live with it.

(11 JAN 2013 - 17 JAN 2013)