The Democratic Advantage How Democracies Promote Prosperity and Peace

1. The Democratic AdvantageHow Democracies Promote Prosperity and Peace • By • Morton Halperin • Joe Siegle • Michael Weinstein The way forward for low income countries

2. The Democratic Advantage - Frame • Key questions Should the international communitity more vigorously support the emergence of democracy? Or should stability be the primary goal? What are the implications for the economic development and international security? • Problematicthe belief of economic superiority of authoritarian governments over democracies at the early stages of development - especially during the cold war but did not fade away after the demise of the soviet union • international development agencies have been designed to ignore a country’s political orientation making funding decisions • Main Argument Global democraticisation, positive fo alleviating poverty and advancing economic development. democracy and development as compatible and complementary. • “democracy does a better job raising living standards in poor countries than does authoritarian government” • Perspectivein general – do not attempt to axe the argumentation on special cases, discredit of “pseudo-axioms”

3. Objective of this book • “by acknowledging a democratic advantage for development — that is, democracy on average propels social and economic progress more effectively — policy markers open the door to a major rethinking of political and economic policy toward the developing world” • “our analysis of the evidence, however says that all other things equal, poor democracies are more likely to experience positive social and economic development and less likely to suffer economic crisis than are poor authoritarian regimes.”

4. Definitions • democracy: we mean those governance systems in which national leaders are selected through free and fair elections, there are institutions that foster a shared distribution of power and citizens have extensive opportunities to participate in political life. This explicitly requires a ugh degree of basic political freedoms, civil liberties and political rights. • development indicators: life expectancy, literacy, access to clean drinking water, agricultural productivity, infant mortality • authoritarian argument: autocratic regime are a better primary step

5. 1.Exposing a 50 year old myth • 1 The Argument for Authoritarian Rule • 2 Democratic Disappointment in Latin America • 3 Defying the Predictions, Democracy Works • 4 “Democratic Peace” • 5 Why Democracies Do a Better Job • 6 Accounting for Democracy’s Shortcomings • 7 The Flaws of the Authoritarian Growth model • 8 China vs India • 9 The way forward

6. Authoritarian advantage Authoritarian advantage • Since post world war II - development should precede democracy – not as an impasse, but as a step, preceding democracy • democracy in poor countries breeds economic stagnation and premature election would be destabilising • Strong political grip & Power Monopoly - poor countries “ill suited for democracy” beset to the manipulation by elites, dispersion of problems, fiscal irresponsibly - macroeconic instability, ethnic fractions, low income polarisation, civil strife • channel and march more efficiently power and resources • concentration of the bigger picture • better to establish and protect the property rights, consistent rule of law • Cultural dimension “compounding these concerns has been the belief that the cultural values in certain societies — be they Asian, African, Eastern European, Middle Eastern, or the former Soviet Republics — were inherently incompatible with democracy” • International and national stability economic development - reducing poverty and spurring economic growth - stability • “democracy should be seen as the crowning achievement after a long process of modernization” urbanisation - expanded literacy - broadening of middle class political power sharing - compromise - common identity democracy Groundin a literate and urbanised middle class. Otherwise it would be manipulated by opportunistic leader (selfish priorities once in office)

7. Authoritarian advantage Academicians & Reports • Samuel Huntington “Political Order in Changing Societies” touted the advantages of one party states for low income countries • World Bank’s report 1993 The East Asian Miracle • 2002 Report of the Asian development bank • 2003 Fareed Zakaria “The future of Freedom: Illiberal Democracy at home and abroad” advocating that the goal should be to support “liberal authorities” in the developing world • Robert Kaplan “lacking the western traditions of tolerance and multiculturalism, efforts to encourage democratisation in other regions of the world are likely to be highly destabilising” • Amy Chua - World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability : free market democracy has been a principal cause of ethnic instability and violence . (..) result has been ethnic demagoguery, confiscation of property, authoritarian backlash and mass killing. Seymour Martin Lipset • they are no friend of typranny. rather they are realists and their pragmatism is a surer path to economic prosperity and democracy becomes viable – key is timing • few exceptional case: South Korea, Taiwan, Portugal, Spain

8. Authoritarian advantage Democratic Disappointment in Latin America? • late 70s, 80s: democratization process • 80s: robust and rapid growth for latin america, raising hopes that democratization and prosperity could grow hand in hand • growth slowed, poverty on the rise, corruption, growing disparities, political tensions • Venezuela case: “Bolivarian Revolution” lading to “21st century socialism” • Hugo Chavez 1999 election - plan for poors / development • despite a relative decrease of poverty, higher rate of crime and unemployment • plunder the democratic prospect such as with the constitutional amendment, to centralise political and presidencial power, media censorship, nationalisation, decrease the autonomy of the central bank • further social polarisation

9. “Democratic Peace” • Democracy as a Peace Factor • low income countries undergoing political pluraization are no more likely to be engaged in conflict than other low income countries • do a better job of developing broad social coalitions and balancing multiple, competing interests in diverse cultures • “democracies rarely, if ever, go to war with each other” • Minxin Pei “the preservation of a one party state and the implementation of the rule of law are fundamentally incompatible” • Global Trends in Regime Characteristics since 1950 • r” • Guillermo O’Donnell: highlights the contraction of the authoritarian argument, whenever it is sufficiently economically developed to make the big lead to democracy • Long process “political system affect the culture, values, incentive structure and economy of a society. Nations that have lived with authoritarian rule undergo a persistent deterioration of societal values and cohesion” “the further down an autocratic path a society has gone, the longer and bumpier is the road to democracy”

10. Why Democracies Do a Better Job & Authoritarian flows • Authoritarian regimes – vicious circle • extensive patronage network • lack of transparency -patronage and corruption - internal conflict • dubious assumptions of what is the best for the society • growth is limited to a small part of population • may impede the middle income lead democratisation process lead • More prone to conflict. 80% of all inters tae conflicts are instigated by autocracies. Civil wars: 30% more chance of spilling over into neighbouring countries • during the cold war: justification of the authoritarian led growth with democratic failures - Bhutan, China, Egypt, Indonesia, South Korea, Singapore, Taiwan, Tunisia and Vietnam - but ignoring the 85 of other dictatorships - 48 had at least one episode of a disastrous economic experience • Outdated argument: • context of cold war, west was obsessed with the communist threat “cooperation from anticommunist authoritarian allies was highly valued” • 50s-60s, there weren't many low income democracies (70% were nondemocratic) • Democracies • boil down to 3 characteristics of representative government: • - shared power: encourages innovation and entrepreneurship - Mancur Olson, greater investor confidence • - openness: information: freedom of speech and association - both beneficial for public and private • - self correcting capacity “horizontal networking” the flow of ideas back and forth between the public, private and civic sectors • Amartya Sen “there is never been a democracy with a free press that has experienced a famine” • resiliency - permitting to grow incrementally • Adam Prezworski “There was never any solid evidence that democracies were somehow inferior in generating growth — certainly not enough to justify supporting or even condoning dictatorships” • development first: 55 low income country have made marked advancements toward democracy over the past two decades. 4/5 had fully authoritarian government before they started their transition - economic growth and democratization • “when one looks at the experience of developing countries as a whole, those with more representative and pluralistic political systems have developed significantly more rapidly, boldly and consistently than those with closed systems”

11. Accounting for Democracy’s Shortcomings • “whatever the cause, slow growth is demoralising for citizens of an emerging democracy who had pinned their hopes for a better life on their new freedoms” • Raising instability? former shadow conners (such a corruption)are not becoming more prevalent, but in fact they are becoming more visible, since citizens want to claim for their rights and fairness • stronger mechanism of checks and balances to adress to economic shortcomings • create a system of restraints on government

12. China vs India • China’s stunning performance&the fragile nature of it’s economic growth • 70s: economic reform towards a capitalistic model liberalised pricing, labor, export and capital policies • But insolvent banks, environmental destruction and growing unemployment, disappointing returns on FDI, closure of state enterprise, weak adherence to a rule of law • economic growth - from economic reforms (not based on the form of government), towards a market system • social based in rural area is narrowing – now, accept entrepreneurs into the party = elaborating patronage relationship - corruption on the rise /alienation from the general public • “a survey of migrant labourers indicates that the prevailing image of the party is that of a self serving elite” • political legitimacy based on the claim “deliver economic growth” • India • 1993 economic reform • import substitution and industrialisation models • more liberal posture, growth accelerated, 7% annual capital gain • exhibit the corrective traits of democratic governance • “its growth is robust, through not exceptional. Nonetheless, it has avoided economic crises and humanitarian catastrophes, something china has not” • reduce subsidies of state owned enterprises, and allow foreign ownership, strong innovation • competitive party politics “entrenched formal and informal patronage” • conclusion “china would have grown faster as a democracy and India would have grown slower as an autocracy — but neither does the evidence support the oposite propositions”

13. The way forwardconclusion of the 1st chapter • - Economically “democracies grow as fast as dictatorships and that democracies do at least well as dictatorships in avoiding fiscal deficits and other economic threat” • - Socially “democracies typically outperform authoritarian governments on a range of social and economic development indicators” • from the 90s UNDP, World Bank and other development organisations began to focus on the governance component • “poor governance and its draining by product corruption, were identified as root causes to chronic underdevelopment” • focus “enhancing governance effectiveness by strengthening the capacity of the civil service, judiciary, an anti corruption agencies” “property rights and contract enforcement legislation” “democracy promotion units” with the USAID • however autocraties still receive as much as democratic regime • at the present, certain agencies are legally required to ignore political characteristics of a government to which funding is provided • responsibility of international community to give priority to democratic forms of government • 9/11 “America’s vital foreign policy interests of promoting democracy and safeguarding national security are not only compatible, they are complementary”