The Link between Democracy and Development

By Mark Green | MAY 31, 2016

Why does promoting democracy and human liberty matter in development terms? The simple answer is that democratic nations—those that respect the voices and values of their people—are usually more prosperous, stable, and reliable partners. Their economic prospects are brighter, because they possess the characteristics and conditions that experience tells us are vital for economic vibrancy and sustainable growth. They also happen to be better strategic partners for the United States because they are citizen-centered, making them less likely to engage in armed aggression.

While there are always exceptions and outliers, generally speaking, evidence supporting the link between democratic development and long-term economic viability is strong and growing.

Take, for example, the catastrophic drought and accompanying famine that struck much of East Africa in 2011. While many people across the region suffered during the crisis, in many ways, the famine was most intense in Somalia. According to the United Nations, more than 260,000 people—mostly children under age five—died. Of course, Somalia has long been among the world’s most failed states. Its government has little authority or effective control outside of the capital, Mogadishu, and it consistently ranks among the most corrupt and least transparent governments in the world. In contrast Somaliland, the semiautonomous region in the northwest portion of Somalia, is among the greatest democratic success stories in the Horn of Africa. Its citizen-driven democratic government not only successfully managed to avoid the worst of the famine for its own people, it also provided famine relief to the rest of Somalia. The difference between a responsive, citizen-driven democracy and a corrupt, authoritarian regime quite literally meant the difference between life and death for tens of thousands of people. The Somalia-Somaliland comparison is at least one sign of how democratic government, civil society, and rule of law can prevent a natural disaster from becoming a human calamity and how economics is inextricably linked to governance.

Effective democracies are fundamentally more responsive. Whether it is responding to an impending food shortage or adapting to long-term economic changes, democracies must address the people’s needs. If they do not, governing parties risk intense criticism from their opposition, the press, and, most importantly, from the voting public. Elections serve as powerful incentives for responsible governance. This continual interaction, adaptation, and communication between the people and their government also create a dynamic and responsive economic environment. Economies can prosper, innovate, and change as necessary. People are free to start businesses, change jobs, and trade at will without the continual restrictions of arbitrary governance.

What’s more, in order to succeed and continue to be vibrant, democratic governments must share power broadly, including with civil society organizations. This relationship enables them to build support for, pass, and implement their policies, and it helps ensure that leaders consider interests beyond their own party, tribe, or region in order to succeed.

Authoritarian systems, however, have none of these incentives. Their limited success is based only on their ability to wield fear and power to achieve their narrow goals. For instance, the monopolization of resources and power enabled only members of Somalia’s government to avoid the kind of suffering and starvation they inflicted upon the public. There was no accountability and no citizen recourse. Without citizen engagement and democratic governance, public planning and facilities, including schools, roads, and hospitals, often fall into disrepair-eroding a country’s ability to adapt and depleting its economic opportunities. Moreover, the denial of basic civil and economic rights stifles innovation and stunts long-term growth.

And it is the long-term, sustainable growth that’s most tied to democratic governance. In the short term, there are certainly gains to be made without the challenges and debate of a democratic system. China’s remarkable economic emergence is probably the most obvious example of this centralized and manufactured growth. Over the last decade, its economy grew at an annual rate of nearly 10 percent. But the limits of this kind of highly restrictive political and economic environment are beginning to show. China’s growth has slowed significantly in the last year and it is now proving difficult to propel a robust economy from a rigid, centralized force without free choice, innovation, and strong markets.

The fact is democratic processes are often the driving force of economic and societal development, not the result of it. Democratic institutions are the foundation on which economic growth can be built and the lives of citizens can be improved. A great example of this is post-communist Poland. Not only did the Solidarity movement—led by repressed citizens and workers—spur the end of communism in Poland, its focus on free press, elections, rule of law, and market-oriented reforms set the country up for more than 20 years of uninterrupted growth. These reforms and a transparent transition to democracy have created a thriving private sector with robust competition and an economy that has grown quickly and sustainably even through Europe’s most recent recession.

While authoritarian systems like China’s may be able to capture short-term gains their tight restrictions do not have the resilience characterized by open, democratic systems and are less able to adapt and expand.

This does not mean we need to impose American-style democracy on places where it is not, but rather illustrates the importance of working with countries to build their own responsive, citizen-driven institutions. Where political parties and civil society organizations are strong, diverse citizen interests are represented, consensus is built, and economies thrive. From the experience of Somaliland’s ability to cope with widespread drought and famine to Poland’s ability to shift from repressive communism to a thriving democracy, the link between democratic and economic development and its effect on the health, well-being, and security of millions of people is clear.

If we are going to truly improve the lives of the world’s poor and repressed, we must do more than offer them short-term economic options devoid of long-term democratic gains. Making democratic development a cornerstone of economic development programs is essential in creating a more stable, secure, and successful world not to mention avoiding needless suffering no matter what natural disasters or economic challenges may yet come.