In the context of developing economies, is there a negative correlation between gdp growth & societal / governance factors of openness, transparency, democracy ? Those emerging / developing countries that appear to be doing best in terms of economic (i.e. GDP) growth appear to be those jurisdictions that have a history of lowered democratic traditions, oftentimes a dominant one-party model, e.g. Indonesia under Suharto, Chile under Pinochet, Singapore under Lee Kuan Yew. The complexity and contentions that attend open democratic governance seem to militate against unity of vision and long-term strategic planning. Has any empirical work been done in this area to confirm or disconfirm these propositions ?
Collier and Leftwich have done a lot of works in this area. But I suggest you read some works by Leftwich. See below:
Politics in command: Development studies and the rediscovery of social science
A Leftwich - New Political Economy, 2005 - Taylor & Francis
On the primacy of politics in development . A Leftwich - Democracy and Development, 1996 - Polity Press Cambridge
Democracy and development. A Leftwich - New Political Economy, 2002 - Taylor & Francis
Maybe you can find this article useful as well:
https://www.researchgate.net/publication/280313051_Debating_Developmental_States_in_Africa_Reflections_on_Culture_and_Civil_Society_in_Botswana
Article Debating Developmental States in Africa: Reflections on Cult...
Thank you Gbenga for sharing these article references
I have ordered the Leftwichn book online
Dear Silburn Clarke
I tried to correlate GDP (PPP) with perceived corruption index (The lowest the corruption the highest the index). For a sample 0f 170+ countries I founf a positive correlation. In other words, richer countries are less corrupt.
Then I tried different subdivisions (European and developed; developing; developing oil producing, developing non-oil producing) allways I found positive correlation even when the slopes of the regression were different.
I have too many foes and I dont want to name countries. It is true that in several oil producing countries corruption is rampant. In Norway, as they say, nobody became millioner at expenses of Norwegian oil, In some African country the daily amount of stoled oil surpases the daily needs of my country (Cuba).
Perhaps we need other indices, such as GDP growth (as you suggested), GINI index for disparity among the poorest and the richest. As you surely know the richest man of this world is from a third world oil producing company.
Best regards
Jose Luis Hernandez Caceres
Data a perceived corruption I downloaded from
http://www.transparency.org/cpi2013/results
data about GDP(PPP) I took from Wikipedia.
It took some time to match countries.
Best regards
Jose Luis
On the relationship between the level of democracy and growth, you may want to check cross-country empirical studies, which lead to mixed results:
Doucouliagos, H. and Ulubaşoğlu, M.A., 2008. “Democracy and Economic Growth: A Meta-Analysis”, American Journal of Political Science, 52 (1), 61–83.
Przeworski A. and F. Limongi, 1993. “Political regimes and economic growth”, Journal of Economic Perspectives, 7 (3), 51–69.
Panel studies on the impact of democratizations display a more homogeneous pattern:
Acemoglu, D., Naidu, S., Restrepo, P., & Robinson, J. A. (2014). “Democracy does cause growth”, National Bureau of Economic Research, working paper No. 20004.
Méon, P.-G., K. Sekkat, and L. Weill, 2009. “Institutional reforms now and benefits tomorrow: How soon is tomorrow?”, Economics and Politics, 21 (2), 319–357.
Papaioannou, E., and G. Siourounis, 2008. “Democratisation and Growth”, Economic Journal, vol.118, 1520–1551.
Rodrik and and R. Wacziarg, 2005, “Do democratic transitions produce bad economic outcomes?”, American Economic Review, 95, 50–55.
On corruption and growth:
Mauro P., 1995. “Corruption and growth”, Quarterly Journal of Economics, 110 (3), 681–712.
Méon, P.-G., K. Sekkat, 2005. “Does corruption grease or sand the wheels of growth?”, with Khalid Sekkat, Public Choice, 122 (1-2), 69-97.
Méon, P.-G., L. Weill, 2010. “Is corruption an efficient grease?”, World Development, 38 (3), 244-259.
Rodrik, D., A. Subramanian, and F. Trebbi, 2004. “Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development”, Journal of Economic Growth, 9 (2), 131–65.
Regards,
P.-Guillaume
a healthy institutional environment is able to encourage domestic and foreign investment and consequently initiate sustained economic growth. However an environment characterized by corruption, socio-political instability, failure protection of property rights, lack of respect for the law .. ct.
such an environment can block the mechanisms of economic growth and hinders the economic development process. this is exactly the stiuation of developing countries
A good place for some of the answers is Daron Acemoglu and James Robinson´s book "Why nations fail". I also think that truly independent states, which are not captured by special interests matter. These state formation issues contain a lot more than just how inclusive institutions appeared. Some states have been very good at providing public goods (Singapore etc) and others very bad.
I examined the impact of democracy on urban poverty in developing countries and found that democratization alone was not sufficient to reduce urban poverty but rather that democratization that was accompanied by economic development and a more equal distribution of income that was expected to lead to a reduction in urban poverty.
I also found that democratization and per capita GDP are positively correlated, unlike what Silburn Clarke was alluding to when posing this question.
Grateful for all the responses with the various viewpoints from the many respondents,
Appreciate your insightful and interesting comments.
A very strong trend detected in the various comments is the recurring reference to a distinction between economic development as measured by gdp growth and real development (of people, societies etc)
It brings to mind the work and philosophies of Amartya Sen especially his thoughts on the development of Human Capabilities (reference his piece on "Development as Freedom"). So while, for instance, the gdp perspective would track the production of physical books in a factory, a human capabilities development perspective would track the incidence of literacy among the population. Similarly, while the gdp construct would measure production of vaccines, the human capabilities perspective would track the improving health of a population.
https://books.google.com.jm/books?hl=en&lr=&id=Qm8HtpFHYecC&oi=fnd&pg=PR9&dq=amartya+sen&ots=81chF0h9DY&sig=Vw_PwwDY8bQH2LTd0xbBrf-1-Os&redir_esc=y#v=onepage&q=amartya%20sen&f=false
Silburn
With respect to this question, I wonder if factors such as timing, geopolitics, historical context and other deviant variables do not play a role in explaining the negative relationship. Lipset's thesis and others may seem to be irrelevant with respect to Chili of Pinochet, Indonesia of Suharto, Singapore of Lee Kuan Yew.
I think the problem with the question is using GDP as the measure of development. It would be worthwhile to explore other measures such as the Physical Quality of Life Index, or a combination of PQLI and other measures.
www.importingdemocracy.org
I think authoritarian governments increase the risk of outcomes; you can be lucky and have a competent administration like in Singapore that generates good economic outcomes or you can get stuck with a government like Zimbabwe's that generates very bad outcomes. In a democracy checks and balances may impede some desirable reforms but they allow the worst governments to be removed. If this is right then there would not be a strong correlation between one party dominance and good outcomes. But if you are risk-averse (or even risk-neutral) I think you should prefer a more vibrant democracy.
The issue is as to how we explains deviant cases where economic growth is linked to authoritarianism. Democracies with check and balance may, as well, create an economic nightmare for some groups in the society (acute economic inequalities). despite the fact such a society may register an economic growth in terms of GDP growth.
An interesting question, indeed. As we all know, the answer to this question could vary depending on the context and the way it is interpreted. In this regard, Singapore represents a unique hybrid model which is different from most other developing countries (Singapore is a developed country now). In the majority of developing countries, the correlation is positive while it may be negative in certain countries where the actual openness and democracy are not well-developed and impacted by political turmoil and racial instability. Governance, in this regard, plays an important role. Please see my article at http://joaag.com/uploads/6_1_-1_As-Saber.pdf.
Nonetheless, a linear or direct relationship between GDP and democracy/openness is difficult to draw as there are many other factors impacting on such relationship!
This question can be interpreted as a special case in the long search for links between economic development and democracy. According to North et al. (2009,3) it has remained open if there is a.causal link. One of the research difficulties arises from the fact that there is no consensus on the definition of democracy (cf Diamond , 2008,19). In my recent book (attached below), I noticed that corruption perception index correlated very well with GNI (PPP) per capita (pp.152-161). On the other hand, democracy did not correlate well with GNI per capita (PPP) ( p.195).
Book Missing a Decent Living for Everyone: Success and Failure in...
Data Missing a Decent Living for Everyone: Background Tables for Appendix 1
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