Literature on the relationship between democracy and economic growth is growing. However, .. This is a big difference compared to M1 or M2. M1 and M2 are. The nexus between democracy and development in Africa has been one of the . for assessing the development of a country, not economic growth alone.6 to explain the relationship between democracy and development. relationship between democracy and economic growth they emphasise that the . In emphasising the difference between authoritarian regimes a distinction has .
If it did, it would by definition not be a free market economy. Free market economies are generally a feature of democracies. They are generally not a feature of dictatorships. Generally in politics we distinguish between public and private activities. Producing, selling, and purchasing goods are "private" - they are the domain of the individual or firm rather than the state.
If you are interested in states where the government handles all the affairs of daily life i. Modernization theory was the dominant view in comparative political science for most of the last century. Although it has since been dethroned, it is still incredibly common in research. The basic notion is that economic development causes democratization although at some point the claim was softened to just that they are strongly correlated. A Note About Generalization What we are talking about here is a generalization of how the world works.
Like commenters and other answers have pointed out - you can always find examples where it doesn't seem to apply perfectly. This is entirely normal.
It just means there are things yet to be explained in the world.
Democracy and economic growth
The Theory Basically, the theory is just that as an economy develops it also tends to become more democratic. He uses some indicators of economic development and shows that the countries with high levels of economic development are also the ones that are democracies. Cutright goes a lot further as did a lot of other modernization theorists: Similarly, if a democratic country's economy slipped it would eventually become less democratic.
What does a developed economy look like? Of course, this research will very highly depend on how you measure the state of an economy. A developed economy should be higher in urbanization. This does tend to happen as an economy develops agricultural workers move to urban areas to take jobs in manufacturing, and eventually the manufacturing jobs are lost to service jobs.
Back in the hey-day of modernization theory, this was measured as the number of telephones per 1, people. Not only can a developed nation afford telephones, communication lines are valuable for economic growth. A developed nation has a well-educated work force.
The reasoning is again two-fold: Similarly, poor democracies are half likely as nondemocracies to experience a 10 percent decline in GDP per capita over the course of a single year. Some disappear in the midst of an economic crises, while other after a long period of prosperity, some after the founding dictator dies or some as a result of defeat in foreign wars. However, observing the conditions and predicting a transition to democracy is so difficult, because the conditions only lay the ground-works for the possibility that it may occur.
But it is actions of people under these conditions that shape the outcome. Many dissertations have been written on the history of different transitions, and the opinions are divided into two main categories.
One party proclaims that it boils down to the creation of civil society, which comes to fruition almost of itself. A process fostered by transformations of the social structure.
The causal relationship between economic development and democracy - Politics Stack Exchange
However, others proclaim that it is those that start with play the "strategic game" and reach a bargain under conditions taken as a datum. The literature pits "sociological" against "strategic" perspectives, yet we can say that both of them are needed for a transition, and they are not mutually exclusive. Survival of democracies[ edit ] The conditions for their origins may be hard to determine, but the factors on which its survival depends are easily identifiable, and are tightly connected to economic growth, that is the level of development measured as per capita income.
Another factor would be the education of the labor force. Specifically the years of schooling of an average citizen. This greatly elevates the probability that a democracy will survive. However, even though income and education are highly correlated, their impact seems to be to some extent independent, with the impact of per capita income being much stronger. Empirical patterns show that a democracy is more fragile in countries where per capita income stagnates or declines, but the causality is not clear.
The fact that economic growth is tightly connected to democracies does not come as a surprise, since democracies are more frequent among the economically developed countries, and are rarer among poor ones. Effects of economic development on democracy[ edit ] The notion of economic growth having a greater influence on democracy was a very popular opinion in the s.
The most important work on the subject has been done by Lipset  where he states that economic development is one of the prerequisites for democracy. However, this is not true.
Both concepts are of equal importance and there are many cases where one acts as a prerequisite for the other, i. Economic development may influence democracy in many ways. By tightening the revolution constraint, creating rising inequality or simply increasing the level of income in the society.
This means that as an economic structure transforms, and since it is related to capital intensity, capital itself becomes more important than land, which is one of the reasons that states with a higher income per capita would generally perform better.
As mentioned, the causality of economic development and democracy is inconclusive. However, if we consider that democracy should be supported by some preconditions, it is economic growth that creates these conditions for democracy: Work done by Lipset is best well-known on this topic.
By his comparative studies Lipset shows a strjong statistical association between GNP per capita and the level of democracy, to finally conclude that "the more well-to-do a nation, the greater the chance that it will sustain democracy".
It is especially relevant in just shaping democracies, even though they may survive in poorer conditions. As democracies require certain political institutions, it is quite interesting that they do not have a high impact on economic growth. What matters for economic development is, in fact political stability, rather than a particular political institution.
As it is safe to assume that any political institution will promote development as long as it is stable, which means that the danger lies in political instability. Yet, political instability does not affect economic growth in democracies, only in dictatorships.
The reasons for this are not entirely clear, whether it may be due to institutional constraints or of motivations of those who govern democracies.
Under dictatorships, it slows down significantly when the tenure of rulers is threatened. Similar outcomes emerge under various forms of "socio-political unrest" such as strikesanti-government demonstrations and riots. Under different regimes, political phenomena have a different meaning, and as such, it is not surprising that economic actors react differently.
Under dictatorships, whenever the regime is threatened, or there are expected changes, workers or masses of people assemble to strike and protest against their opposition, that is the government, and the economy suffers. Under democracies, this is rarer, since everyone knows that the government will change from time to time, and while they know that they are able to protest in the same manner, most often than not they do not.
For instance, it would be enriching to see Gerald Scully for some strong arguments on political instability and growth. Studies actually observe that democracies can somewhat affect growth.