Wednesday, May 20, 2009

Does economic growth foster democracy?

What causes countries to transition to democracy? Richard Florida relays study results that may not be as startling as they sound at first blush:

Researchers from ETH Switzerland and Georgetown University used a statistical procedure called "extreme bounds analysis" to test the salience of 59 factors identified in more than three million previous statistical regressions (h/t: Charlotta Mellander). The study finds a "humbling result": Out of all those studies, all those variables, and all those millions of statistical analyses, just five factors predict the emergence of democracy, while four predict its survival.

Most surprising of all is the role played by economic growth, measured as gross domestic product (GDP) per capita. The study finds that GDP per capita is negatively associated with the transition to democracy. Contrary to "modernization theory", the study finds that richer countries are not more likely to become democracies. Richer countries are more likely to remain democracies once they become one.

There may be some slight distortion in the retelling here. The study itself say this:

Regarding transitions to democracy, we find that economic growth has a robust negative effect. This finding, standing in stark contrast to modernization theory, suggests that autocracies with strong economic performance are unlikely to see democracy emerge. Instead, economic contraction causes dictatorships to break down. Also in contrast to modernization theory...the level of GDP per capita does not have a robust relationship with the emergence of democracy (p.2).

We have an interesting finding for economic growth: it makes dictatorships more likely to survive and lowers the chances for democracy to emerge (p. 27).

Florida tells us that the study finds that GDP per capita is negatively associated with the transition to democracy. The study authors write that GDP growth is negatively associated with transition -- in either direction. That's a big difference. Contra Florida, richer countries are not less likely to transition (though they may not be more likely to). Growing countries are less likely to transition.

The takeaway, as far as I can see, is that governments are stable while economic growth is robust -- growth gives governments authority, and no one wants to change a winning game. The authors suggest as much:

Countries that perform better economically are less likely to see democracy emerge. In good times, the "need" for a change might not be felt in the population, and autocratic rulers can justify their position (21).

They then claim that this fact "defies a basic idea in modernization theory that as a country develops, democracy should become more likely."

But does it? Here's how the authors describe modernization theory:

Modernization theory argues that as countries develop economically, social structures become too complex for authoritarian regimes to manage - technological change endows owners of capital with some autonomy and private information, complex labor processes require active cooperation rather than coercion, and civil society emerges. At some point in the process, dictatorship collapses and democracy emerges as the alternative (p. 5).

Is it possible that this pattern does indeed often play out -- but only after a dictatorship that has enjoyed sustained economic success suddenly faces economic crisis? Perhaps arrested growth triggers discontent. Perhaps the curbs to growth that modernization theory claims are inherent in dictatorship only kick in at a relatively high level of economic development.

Against this hypothesis, the authors do find that "the level of GDP per capita does not have a robust relationship with the emergence of democracy" (p. 3) and that "GDP per capita does not explain democratic transitions" (p. 19). But lack of a finding of a robust relationship does not mean that there is no relationship. Their more unequivocal finding again, is that rapid growth obviates against a change in form of government. Could it be that a period of growth followed by economic crisis does tend to trigger democratic transitions?

The study, Extreme Bounds of Democracy, is by Martin Gassebener, Michael J. Lamia and James Raymond Vreeland.

3 comments:

  1. Consider the origins of the first two great democracies. The US rose from a backwater agrarian society through a tax revolt. The French republic rose from a famine. I wonder if the conventional wisdom on this is somehow biased by the example of the UK which became a full democracy during a golden age.

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  2. Consider the origins of the first two great democracies. The US rose from a backwater agrarian society through a tax revolt. The French republic rose from a famine. I wonder if the conventional wisdom on this is somehow biased by the example of the UK which became a full democracy during a golden age.

    ReplyDelete
  3. Consider the origins of the first two great democracies. The US rose from a backwater agrarian society through a tax revolt. The French republic rose from a famine. I wonder if the conventional wisdom on this is somehow biased by the example of the UK which became a full democracy during a golden age.

    ReplyDelete

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