Waylaid Dialectic

July 29, 2010

The Consequences of Democracy

Filed under: Governance — terence @ 5:45 pm
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There’s an intrinsic appeal to democracy – it seems only fair that people should have some sort of say in collective decisions that impact on their lives. Within small communities this may well be achieved through informal means, but once you get to the level of a nation-state, some sort of formal system of voting will be necessary to recognise this ideal. And so democracy. It’s only fair.

But idealised fairness is only one criteria on which democracy needs to evaluated. Another is consequence. I instinctively support democracy because it appeals to my sense of fairness but if you could show me that democracies were more violent, less healthy, worse performing economically, and less happy, my support would be seriously shaken*.

Fortunately though, as best I can tell, the bulk of the evidence suggests that democracies do generate better outcomes for people living in them.

First, in the economic sphere…

A common perception is that democracies don’t do a good job of generating strong economic growth, particularly in developing countries. It’s a perception informed by the relative economic success of non-democratic nations such as China and Vietnam, along with a belief that democracies simply aren’t capable of making the hard choices necessary for economic liftoff. And at first glance it seems plausible. However, in development arguments based on what seems plausible or what or on selected countries often don’t stand up to more detailed analysis. Which is precisely the case for the ‘democracies grow slower’ argument. A meta-review, for example, by Hristos Doucouliagos and Mehmet Ulubasoglu [PDF] using cross country data finds no evidence to show that, on average, democracies grow slower than authoritarian states. What’s more there’s some good evidence to show that on average countries that successfully transition to democracy grow faster than their authoritarian counterparts eventually. Also, while there is little evidence to suggest a strong short-term cross-country relationship between democracy and growth, there is some evidence to suggest that democracies perform better economically in the long-run.

So if we use GDP per capita growth as our yardstick of success, we certainly can’t say that democracies perform worse than alternatives – and indeed, if anything, the evidence suggests they perform better.

Second, in distribution…

In his book One Economics Many Recipes Dani Rodrik provides evidence that democracies tend to have more egalitarian distributions of wealth and pay higher wages to workers in the manufacturing sector (p180-182). In other words, for any given level of wealth democracies will do a better job at reducing inequality and poverty.

Third, in famines and shocks…

As far as consequences go, famines are about as bad as it gets. And so Amartya Sen’s famous finding that (Post WW2 IIRC) no democratic country with a free press had experienced a significant famine is further evidence in favour of democracy, particularly when you consider the welfare impacts of the massive famines in countries such as China. Sen’s finding is from a while ago now, and I’m not familiar enough with famines to know whether or not subsequent famines have occurred in democracies, but even if they have, the simple fact that democracies experience fewer famines is still good evidence in favour of democracy.

While they’re not as awful as famines, large negative economic shocks also have significant welfare consequences. And there’s a good theoretical reason to think that the same feedback mechanisms which cause democracies to experience fewer famines would also generate fewer negative shocks in democracies. And, indeed, that’s what the evidence suggests, with Rodrik (ibid, p175-77) finding democracies significantly less prone to such shocks.

Fourth in war…

The consequences of war are, of course, awful. So – to the extent that it holds (and it is certainly contested, although there is convincing evidence that it holds in part, see here, for example) – the Democratic Peace Theory which suggests that democracies are less likely to go to war with each other and which is backed by some evidence at least is another reason for consequentialists to favour democracy.

Fifth in human rights…

Respect for human rights is clearly linked with better welfare (torture, like war and famine is about as horrific thing as can be afflicted on a person or people). And as you’d expect, systematic studies find that democracies have better human rights records (although the relationship is not always simple). Examples of evidence on this can be found here and here.

And finally, in social services…

Peter Lindert in his book ‘Growing Public‘ provides good evidence to suggest that democratisation in Europe was a key driver of state provision of social services. Public health care and education are essential components of well being, so once again we have good reason to suggest that the consequences of democracy for the people who live within democracies are on the whole positive.

So, in other words, the consequentialist case for democracy is pretty good, I think.

[Update: Democracies are more likely to provide free schooling in Africa according to this article; and more likely to engage in re-distributive spending (generally) although not more likely to be less unequal in the new Acemoglu Naidu et al paper]

[Update: See this, which looks potentially like very strong evidence democracy does lead to better economic performance on average.]

*Actually, technically it would be toast – as a Utilitarian (albeit a conflicted one) consequence is my ultimate metric of evaluation.

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2 Comments

  1. […] I think Easterly is absolutely right in his support of democracy. Not only does it seem fair that people should have a say in decisions about how they’re governed, but there are also significant development dividends associated with democratic governance. While democracies don’t on average experience higher economic growth rates than autocratic regimes, their rates of growth aren’t any lower either. Meanwhile, democratic transitions do tend to spur economic growth. Democracies also typically have more egalitarian distributions of wealth than dictatorships, and pay higher wages to workers in the manufacturing sector. Their human rights records are also better and they experience fewer severe economic shocks. (I’ve summarised evidence for these claims here.) […]

    Pingback by Aiding or Abetting? Should we give aid to dictatorships? | Development Policy blog — November 28, 2010 @ 6:12 pm

  2. […] I’ve been updating my post on the development benefits of democracy. William Easterly is absolutely correct to see democracy as central to development. Yet he […]

    Pingback by Aiding or Abetting, should we give aid to dictatorships? « Waylaid Dialectic — November 30, 2010 @ 5:21 am


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