[A-List] Development dilemma: democracy vs. accumulation

[Keaney Michael]

Back in the 1960s development theorists such as David Apter noted that there was no necessary connection between development and democracy. Indeed, he claimed that the economic drove the political, social and cultural, these latter being dependent. In "Radical Democracy" (Cornell UP 1996), C. Douglas Lummis goes so far as to claim that development per se is inherently undemocratic, regardless of the model chosen (capitalist, Soviet, etc.). Now we have confirmation from the Asian Development Bank that the developmental state thesis underlining Chalmers Johnson's analysis of Japan, for example, remains important in much economic thinking in that region, and that the "models of capitalism" debate that is one manifestation of inter-imperialist rivalry is far from over.


Democracies 'slower to fight poverty'
Financial Times; Apr 5, 2002
By JOHN THORNHILL

The democratisationprocess currently sweeping the world might hinder economic development and poverty alleviation, says a report published by the Asian Development Bank Institute.

Based on a study of the post-war east Asian "miracle" economies that have made the most startling progress in tackling poverty , the paper argues that economic success depends on many factors. These include openness to trade and technology, macro-economic stability, labour market flexibility, good economic governance and skills formation.

However, it suggests that the authoritarian nature of all the east Asian miracle economies - Singapore, Taiwan, South Korea, Indonesia and Malaysia - helped foster good economic governance.

"When this experience is juxtaposed against that of India, it appears that whereas democracies have been slow in grappling with poverty, the authoritarian regimes in the miracle economies achieved spectacular success," the paper states.

The report, which reflects the personal views of its author, M.G. Quibria, rather than the institutional stance of the ADB, is bound to reignite the debate about the connections between economic and political liberalism.

Western governments, the main shareholders of most multilateral aid organisations, have long argued that democratisation needs to proceed in tandem with economic development.

The paper acknowledges the complex relationship between political regimes and economic governance. A democracy is not necessarily economically liberal, and an autocracy is not always economically illiberal.

The "miracle" economies had fewer labour market regulations than most modern democracies and boasted more flexibility. "The advent of democracy and political pluralism hinders the adoption of some programmes and policies that were feasible in the absence of democracy," the report states.

"In addition, in a democracy with a thriving civil society, the process of policy consultation, adoption and execution is much more time-consuming and involves many more procedural formalities than under an authoritarian regime."

However, Surjit Bhalla, a leading Indian economist, said there was no empirical evidence proving that autocracy necessarily promoted economic development. Indeed, many autocracies in Africa and Latin America had been disastrous for economic growth.

While India had long championed political freedom, Mr Bhalla said it had suppressed economic freedom, thereby hampering its efforts to promote growth and alleviate poverty.

The paper concludes that the lessons of east Asia's successful economic development cannot simply be transplanted elsewhere. Changes in the global trading environment, the increased influence of the World Trade Organisation, the development of information technology and civil society, and the greater mobility of capital mean that developing countries today face very different challenges and policy options than existed in the 1960s.

Growth and poverty : Lessons from the East Asian Miracle Revisited by M.G. Quibria. Available on the ADBI website at: 
http://www.adbi.org/publications

Full article at:
http://globalarchive.ft.com/globalarchive/article.html?id=020405001003&query=Democracies+slower+to+fight+poverty


 LETTERS TO THE EDITOR: Miracle economies allowed critical freedoms
Financial Times; Apr 12, 2002
By M. G QUIBRIA

>From Dr M. G. Quibria.

Sir, I am highly gratified by the generous attention given to my research paper "Growth and Poverty: Lessons from the East Asian Miracle Revisited" in John Thornhill's article "Democracies are slower to fight poverty" (April 5) and in your editorial "Asian values" (April 5). However, I think readers may have been given the wrong impression that my paper advocates political autocracy as a means of accelerating economic growth and reducing poverty.

Indeed, far from it. In my paper I suggested that, in explaining the spectacular success of the east Asian "miracle economies", an important point to emphasise is their good economic governance, an area that has been highlighted by all multilateral aid organisations, including my own, the Asian Development Bank. In that connection, as you rightly noted, my paper discussed at length the complex inter-relationship between political regimes and economic governance: a democracy is not always economically liberal nor an autocracy always economically illiberal.

In view of that complex inter-relationship, the conclusion of my paper in this regard was as follows: whether politically autocratic or not, the miracle economies provided an economic framework that allowed critical economic freedoms and a structure of market-supporting institutions needed for the economy to blossom. Without this framework - as reflected in the enlightened policy instincts of the autocrats and the operational insulation of the bureaucracies - the economic miracle would not have been possible. The policy lesson from this, however, is not to make a transition from a democratic polity to an autocratic regime, but to create an institutional framework for greater economic freedom in otherwise illiberal democracies.

This conclusion by no means suggests the repudiation of the argument that democratisation should proceed in tandem with economic development, a viewpoint widely shared by the development community.

M. G. Quibria, Senior Adviser, Asian Development Bank Institute, Tokyo 100-6008, Japan

Full article at:
http://globalarchive.ft.com/globalarchive/article.html?id=020412001886&query=John+Thornhill

Michael Keaney
Mercuria Business School
Martinlaaksontie 36
01620 Vantaa
Finland

michael.keaney at mbs.fi