THE TEMASEK REVIEW

An extract from The Economist

Given that democracy is unlikely to advance,  these days, through the military of economic preponderance of the West, its best hope lies in winning a genuinely open debate. In other words, wavering countries, and sceptical societies, must be convinced that political freedom works best.

So how does the case in defence of democracy stand up these days? As many a philosopher has noted, the strongest points to be made in favor of a free political contest are negative. Democracy may not yield perfect policies, but it ought to guard against all manner of ills, ranging from outright tyranny (towards which a “mild” authoritarian can always slide) to larceny at the public expense.

Transparency International, a corruption watchdog, says that all but two of the 30 least corrupt countries in the world are democracies (the exceptions are Singapore and Hong Kong, and the are considered semi-democratic).

Autocracies tend to occupy higher rankings on the corruption scale and it is easy to see why. Entrenched political elites, untroubled by free and fair elections, can get away more easily with stuffing their pockets. And strongmen often try to maintain their hold on power by relying on public funds to reward their supporters and to buy off their enemies, leading to a huge misallocation of resources.

Yet it is easy to find corrupt democracies – indeed, in a ramshackle place like Afghanistan elections sometimes seem to make things worse. Or take the biggest of the ex-Soviet republics. Russia is authoritarian and has a massive problem with corruption; Ukraine is more democratic – the forthcoming elections are a genuine contest for power, with uncertain results – but it too has quite a big corruption problem.

What about the argument that economic development, at least in its early stages, is best pursued under a benign despot? Lee Kuan Yew, an ex-prime minister of Singapore, once asserted that democracy leads to “disorderly conduct”, disrupting material progress. But there is no evidence that autocracies, on average, grow faster than democracies.

For every economicall successful East Asian (former) autocracy like Taiwan or South Koera, there is an Egypt or a Cameroon (or indeed a North Korea or a Myanmar) which is both harsh and sluggish.

The link between political systems and growth is hard to establish. Yet there is some evidence that, on average, democracies do better. A study by Morton Halperin, Joseph Siegle and Michael Weinstein for the Council of Foreign Relations (CFR), using World Bank data between 1960 and 2001, found that the average annual economic growth rate was 2.3% for democracies and 1.6% for autocracies.

Believers in democracy as an engine of progress often make the point that a climate of freedom is most needed in a knowledge-based economy, where independent thinking and innovation are vital. It is surely no accident that every economy in the top 25 of the Global Innovation Index is a democracy, except semi-democratic Singapore and Hong Kong.

What about the argument that autocracy creates a modicum of stability without which growth is impossible? In fact, it is not evident that authoritarian countries are more stable than democracies. Quite the contrary. Although democratic politicians spend a lot of time vacillating, arguing and being loud and disagreeable, this can reinforce stability in the medium term; it allows the interests and viewpoints of more people to be heard before action is taken.

On the State Fragility Index, which is produced annually by George Mason University and studies variables such as “political effectiveness” and security, democracies tend to do much better than autocracies. Tito’s Yugoslavia was stable, as was Saddam Hussein’s Iraq – but once the straitjacket that held their systems together came off, the result of a release of pent-up pressure, and a golden opportunity for demagogues bent on mayhem.

At the very least, a culture of compromise – coupled with greater accountability and limits on state power – means that democracies are better able to avoid castastrophic mistakes, or criminal cruelty. Bloody nightmares that cost tens of millions of lives, like China’s Great Leap Forward or the Soviet Union’s forced collectivisation programme, were made possible by the concentration of power in a small group of people who faced no restraint.

Liberal democratic governments can make all manner of blunders, but they are less likely to commit mass murder. Amartya Sen, a Nobel prize-winning economist, has famously argued that no country with a free press and fair elections has ever had a large famine. And research done by CFR scholars found that poor autocracies were at least twice as likely as democracies to suffer an economic disaster (defined as a decline of 10% or more in GDP in a year).

With no noisy legislatures or robust courts to hold things up, autocracies may be faster and bolder. The are also more accident-prone.

For all its frustrations, open and accountable government tends in the long run to produce better policies. This is because no group of mandarins, no matter how enlightened or well-meaning, can claim to be sure of what is best for a complex society.

Autocracies tend to be too heavy at the top; although decisions may be more easily taken, the ethos of autocracies – their secrecy and paranoia – makes it harder for alternative views to emerge. Above all, elections make transfer of power legitimate and smooth.

Tyrannies may look stable under one strongman; but they can slide into instability, even bloody chaos, if a transitioni goes awry. Free elections also mean that policy mistakes, even bad ones, are more quickly corrected. Fresh ideas can be brought in and politicians thrown out before they grow arrogant.

Source: The Economist

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