Democracy And Economic Development

Abstract

In this paper, we will look into the relationship between democracy and economic development. The paper opens with a brief look into the importance of economic development, and then looks into democracy and its elements and how they factor into the growth of the economy, with some hypotheses from specialists of the field. Cases of economic growth in non-democratic countries are also delved into, namely the case of China. There the paper analyzes what results in economic growth in the absence of democracy. In the end we come to a conclusion on the matter, whether or not democracy is a necessity for economic growth.

Economic development is one of the core priorities of any given state, regardless of regime or position in the international

Other scholars believe the relationship between democracy and economic development to be unilateral; economic development leads to democracy, however democracy impedes growth. According to them democracy is directly related to the level of economy, but has an inverse relation with growth; wealthy countries may have reached a high level of economy prior to establishing democracy, but slowed down afterwards. They claim that most of the advanced economies – including the US, Germany, Japan, etc. – and rising economies had their initial economic boom and growth under a non-democratic or different form of democratic regime. Some might say that autocrats are in fact beneficial to economic development

This allows for economic actors to have more freedom in their decisions and greater influence in the economic policies of the government. Whereas autocratic regimes have strict barriers to entry in the policymaking process, democracies have small barriers.

Regular, free and fair elections and peaceful transition of power: reduce uncertainty for political actors and their policies, which in turn lead to greater certainty in the economic institutions. Generally, autocracies lack free and fair elections, and as a result there is a level of uncertainty towards them and their policies. There is no means of legitimate removal from power to incite these governments to follow through with beneficial policies.

Accountability of the government to the public: produces constraint on government actions, building credibility and reducing uncertainty. This keeps democratic governments in check and ensures their policies benefit the private and public entities. Autocracies on the other hand lack this accountability, and their actions are generally unopposed. Moreover, autocratic rulers might use their absolute power to take the wealth for themselves; the rule of Ferdinand Marcos of the Philippines turned the country into the poorest in the