I came across this article, witch is rather interesting: [spoiler:51h68j3y]Does Economic Success Require Democracy? By Kevin Hassett From the May/June 2007 Issue Filed under: World Watch, Economic Policy, Government & Politics Sadly, no. In fact, the politically unfree countries are enjoying more economic growth than the politically free ones. Kevin Hassett tells why. When Kenneth Arrow was awarded the Nobel Prize in Economics in 1972, one of the contributions the awards committee cited was his miraculous “impossibility” theorem. Decades from now, Arrow’s theorem, originally drawn in his doctoral dissertation, will be viewed as the 20th-century idea that best anticipated the 21st century. While mathematical in origin, the impossibility theorem is simple to describe in words: A government is really just a mechanism that makes collective decisions for a large number of citizens who have different preferences. I might want to spend our tax dollars on dog parks; you might prefer more police. The government’s job is to work it out. This job is called “aggregating preferences.” In the U.S., we send signals with voting to help the government aggregate preferences. Dictatorships now understand that they have to provide a good economy to keep citizens happy, and they understand that free-market economies work best. Arrow was able to show that no voting scheme can be devised that will create a government that has rational preferences, where rationality is defined precisely by Arrow as meeting a number of conditions. Democracy might be a form of government that many prefer to live under, but there is nothing theoretically compelling that suggests that it is the form of government that best reflects the underlying preferences of citizens. As a result, democracies will not necessarily outperform other types of mechanisms for preference aggregation as a route to economic prosperity. Democracies will not always win. In the latter half of the 20th century, this observation seemed irrelevant. The United States, with its free markets and democracy, defeated the Soviet Union, with its centrally planned economy and party dictatorship. But in the 21st century, things look different. Dictatorships, as in China, appear to have learned from the failure of the Soviets. While they continue to oppress political opponents, they allow a high level of economic freedom within their borders. So far, this approach is working, and in a big way—as the chart illustrates. An organization called Freedom House rates the level of political freedom of the world’s nations on a scale of 1 to 7, with 1 the most free. For example, according to the 2006 survey, countries like the United States and Italy are rated 1, while Singapore is rated 4.5, China and Saudi Arabia 6.5, and North Korea 7. In addition, the Fraser Institute in Canada rates the economic freedom of nations, looking at taxes, regulation, trade barriers, and the like. Economic Growth The chart shows the economic growth of two different sets of countries. The first set comprises nations that are both politically and economically free; the second, those that are repressed politically (have high numbers on the Freedom House scale) but are economically free. In each case, I looked at the average five-year growth rate of GDP, weighted by the size of each respective economy. The chart tells a striking story: the countries that are economically and politically free are underperforming the countries that are economically but not politically free. For example, unfree China had a growth rate of 9.5 percent from 2001 to 2005. But China was not the whole story—Malaysia’s GDP grew 9.5 percent from 1991 to 1995, Singapore’s GDP grew 6.4 percent from 1996 to 2000, and Russia’s grew 6.1 percent from 2001 to 2005. The unfree governments now understand that they have to provide a good economy to keep citizens happy, and they understand that free-market economies work best. Also, nearly all of the unfree nations are developing countries. History shows they grow faster, at least for a while, than mature nations. But being unfree may be an economic advantage. Dictatorships are not hamstrung by the preferences of voters for, say, a pervasive welfare state. So the future may look something like the 20th century in reverse. The unfree nations will grow so quickly that they will overwhelm free nations with their economic might. The unfree will see no reason to transition to democracy. Meanwhile, democracies may copy many of the market-friendly policies of the dictatorships, but it seems unlikely that free citizens will choose to reduce their own political freedoms. Democracies will stay in the game, but, as Arrow showed long ago, their victory is not assured.[/spoiler:51h68j3y] http://www.american.com/archive/200...tents/does-economic-success-require-democracy What do you think?
Well the only reason for this is that the ones that are repressed are all emerging economies that grow faster.
Possibly. A dictatorship can be said to be more efficient than a democracy in terms of setting government policy.
That is indeed a good question. In article it mentioned Russia. While it has some what limited freedom of speech (I'm not sure if its official) but I would not call it dictatorship or anything close to that
One of my profs from the fall actually wrote his thesis on this. His basic conclusion is that democracies experience a grace period before the benefits of a democratic economy kick in. http://www.sciencedirect.com.ezproxy1.l ... rticle.pdf And here's an article he wrote about the correlation between corruption, democracy and economic growth.... http://web.ebscohost.com.ezproxy1.lib.a ... d=2&hid=11 Let me know if you guys can't access the links as I did pick them up from my library
Yea not posting my school id and password here lol. I'll work on getting you guys links that work http://www.un.org/esa/desa/papers/2007/wp55_2007.pdf The one relating corruption democracy and economy Here's the conclusion of the article dealing with democracy and economy in southeast Asia: What should one make of the empirical findings reported here? Four considerations bear mention. To begin with, some limited and quite modest support (shown in Tables 2–4, but not in Tables 5 and 6) is found for the hypothesis that electoral democracy, by itself, increases growth and investment in Asia while almost no support is found for the hypothesis that autocracy, by itself, increases growth and investment. The finding that autocracies by themselves tend not to increase growth and investment is not particularly surprising—it just confirms what we know from the case literature, not all autocracies are committed to development, have the capability to implement their development visions, or adopt development policies that work. The limited finding that democracies by themselves may increase growth and investment casts some doubt on the validity, at least for Asia, of the recent work by Rodrik and Wacziarg (2005) and by Papaioannou and Siourounis (2007), which shows that electoral democracies grow faster than their authoritarian counterparts. It may well be that the impact of democracy on growth is region and/or polity specific, that is, it may depend on how, among other things, power relationships play out in particular democracies/autocracies. There is some evidence of this in Rodrik and Wacziarg (2005) who report that the impact of electoral democracy on growth appears to be a bit different in sub-Saharan Africa than it is elsewhere. Second, substantial support is found for the hypothesis that state capacity, as defined here to include bureaucratic quality and adherence to a rule of law, matters in both democracies and autocracies. For democracies, this finding is wholly consistent with the literature on democratic consolidation. As Linz and Stepan (1996), p. 10) and Diamond (1999), pp. 111–112) argue, in consolidated democracies all significant actors respect and uphold the law, and as Linz and Stephan say with respect to effective government (1996, p. 11), ‘Modern democracy. . .needs. . .a functioning state and a state bureaucracy considered useable by the new democratic government. To protect the rights of citizens and. . .deliver the. . .services that citizens demand, a democratic government needs to be able to exercise. . .its claim to the monopoly of the legitimate use of force. . . . . .it would have to tax compulsorily. For this it needs a functioning state and a state bureaucracy usable by the new democratic government.’ Said another way, the growth advantage of democracies may be limited to consolidated democracies or ones with ample state capacity. But this finding is also consistent with the literature on East Asia’s developmentally oriented autocracies. As Evans and Rauch (1999, p. 760) say about the impact of bureaucratic capability on growth in East Asia, ‘These findings support interpretations of high East Asian growth that emphasize the contribution of competent, cohesive bureaucracies and offer a succinct, objective, and replicable substitute for the unsatisfying amorphous and atheoretical idea of an ‘‘East Asian” effect.’ Finally, support is also found for a third structure of political institutions variable, the number of veto players in democracies and autocracies, as explicated by MacIntyre (2003, 2001). Following Tsebelis (2002), he focuses on the impact of the distribution of veto players on two policy syndromes, policy rigidity, and policy volatility. The thrust of his work is to demonstrate that effective democracies probably need fewer powerful veto players than usually found in democracies, to guard against policy rigidity, while effective autocracies probably need more veto players than usually found there to guard against policy volatility. Taken together, these findings reinforce the growing shift inthe literature on democracy and growth away from attempting to demonstrate that electoral democracies grow faster than autocracies to focus on the structure of political institutions in democracies and autocracies. This suggests that those interested in the link between democracy/autocracy and development would probably be better served by asking questions such as does a given polity possess an effective governmental bureaucracy, does it adhere to the rule of law, is it developmentally oriented, does it have enough flexibility to change development policies when this is needed, and does it have enough capability to sustain policies when this is called for? One final consideration matters. The Asian values debate, the continuing strong growth performance of China and Singapore, and the weakening performance of Indonesia and Thailand following democratization have led a number of analysts to worry that publics, political elites, and governments in these economies will yearn for a return to autocratic rule because at least the autocrats delivered growth. While there is not much evidence yet of waning public support for democracy in Indonesia (McLeod & MacIntyre, 2007, p. 4), data from two Asian Barometer Surveys reveal lingering support for authoritarian rule and a loss of popular confidence in democracy elsewhere in East Asia, including in Thailand (Ytzung, Yun-han, & Park, 2007). Ytzung et al. (2007, p. 77) attribute declining confidence in democracy to slow progress toward establishing a rule of law, accountable and responsive government, and to economic performances that have not lived up to expectations. The major implication of findings reported here is that concern over the economic growth performance of new democracies in Asia is misplaced. There, if anything, a democracy advantage appears to be emerging, particularly in the more consolidated democracies—those with strong state capacity and fewer veto players. But since this is the case, what accounts for public disenchantment with economic performance? Two culprits are possible. To begin with, at least in Indonesia and Thailand, growth performance for the decade prior to the crisis was little short of astonishing. Unfortunately, subsequent declines in performance occurred on democracy’s watch. This may have led some to conclude that democracies are not as good as autocracies at delivering growth. But lest one forget, even Indonesia’s and Thailand’s growth-oriented autocratic regimes experienced serious economic setbacks—in the late 1970s and early 1980s, let alone during the 1990s (in Indonesia). Second, public disappointment over economic performance may encompass more than growth. At least in Indonesia and Thailand, democratization went hand in hand with the rise and spread of money politics, a breakdown in centralized corruption networks, and the rise of unscrupulous politicians and businessmen with insider access. There is little doubt that this combination has affected public resentment. Taken together, this is not particularly auspicious news, but it does suggest what governments and others might do to build confidence in democracy. They need to remind publics that over the long haul, including before 1966 in Indonesia and during 1932–60 in Thailand, their autocratic governments have not done better in delivering growth. They need to tackle rising corruption while focusing political efforts on consolidating democratic rule by re-building bureaucratic capabilities and increasing adherence to the rule of law. They also may need to engage, as a number have begun to do (Reilly, 2006, 2007), in electoral engineering to reduce the number of veto players.
It doesn´t mather if you have a democracy or a dictatorship. When the market is more free, the better the economy will turn out to be. Look for example Hong Kong. It is only a city, but because of the free market, it is one of the most rich cities in the world.
I point to the improvement of living conditions in Venezuela and Cuba after socialism(or the path to it) took hold. The free market has little to do with this, planned economy's, socialist or capitalist can do just as well. A example of a planned capitalist economy working very well is Nazi Germany.
Even if there were improvements in Cuba and Venezuela, they are still way far from the improvements in many capitalist coutnries.
I dont think it has that much to do with the governement type but more with the actual prosperity of the country, for example Ethiopia has a way higher GDP growth rate then many Western countries but that doesnt mean it is more ecomically prosperous. And well if you have one factory in your country and the next year you have two then your economical capacity has doubled, and if you have 100 factories and the next year you have 105 factories, well you get my point.
Not necessarily look for example at nigeria, big oil deposits but this translates poorly into actual increases in wealth.
