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  • The New Thinking on Development
  • Jagdish Bhagwati (bio)

Nearly three decades ago, I wrote of a trade-off or “cruel dilemma” which then seemed to govern the relationship between democracy and economic development. 1 It is now my pleasure to admit that this view, based on arguments that I shall presently discuss, was too pessimistic and despondent, and to affirm the more sanguine view of this relationship that has replaced the old thinking. The new view is that one does not have to choose between doing good and doing well, or, to put it in a nutshell, that democracy does not handicap development, and in the right circumstances can even promote it.

Thus the pursuit of political and civic virtue in the form of a vibrant democracy need not come at the expense of the drive for economic development. All good things may sometimes go together, just as we have discovered that literacy is good both in itself and for development, and that female education emancipates women while at the same time restraining the growth of population and enhancing the possibility of greater economic prosperity for smaller numbers.

The new view is less a total reversal than a nuanced revision. It claims not that democracy is necessarily or overwhelmingly better for development, but only that democracy can be consonant with development, and may even help to promote it, if circumstances are right. In discussing such matters, it is well to keep in mind the Oxford social anthropologist Edward Evans-Pritchard’s remark that the only generalization in the social sciences is that there are no generalizations, or the Cambridge economist Joan Robinson’s mischievous observation that in economics, everything and its opposite are true (for you can almost [End Page 50] always find evidence, from some place or historical period, to support almost anything).

Examining the record of the developing nations over the last half-century, one is hard-pressed to find a strong relationship between democracy or its absence in a country and that country’s rate of economic growth. Democracy has come to most of the developing world only in recent years: in the last two decades, nearly 40 countries have turned to democracy. For the bulk of the postwar period, only India, Costa Rica, and Sri Lanka sustained democracy for long periods, and their growth rates were admittedly far from compelling. But then nondemocracies also displayed an immense range of performance, ranging from spectacular in the Far East to abysmal across much of Africa. Looking only at the developing countries in the postwar period, therefore, it would be hard to conclude that the democracies among them lagged behind in development. Moreover, if we shift our gaze to the countries of the developed world, we see that the democracies have overwhelmingly outperformed the socialist dictatorships that happily have now vanished, at least for the present, from our midst.

Thus to maintain the old view—that democracy necessarily handicaps development whereas authoritarianism aids it—is to argue a case that must explain away these facts by citing other factors and cross-country differences that overwhelm the outcomes. 2 Indeed, democracy and authoritarianism are only one dimension on which countries and their developmental performances differ; to develop the new and more nuanced view that holds democracy to be compatible with and at times even conducive to development, I shall address qualitatively and directly the ways in which, and the reasons why, such a happy symbiosis is the likely reality.

It would be wrong for me to suggest, however, that the old, dismal, and deterministic view is necessarily dead. Echoes can often be heard, amplified by undemocratic governments boasting successful developmental records. Singapore’s former premier Lee Kuan Yew, for instance, frequently attacks democracy for its “undisciplined” ways and credits his own “soft” authoritarian rule with saving his city-state from the debilitating and development-crippling effects of democracy. Thus he has argued that “what a country needs to develop is discipline more than democracy. The exuberance of democracy leads to indiscipline and disorderly conduct which are inimical to development.” 3 Indeed, the phenomenal success stories of South Korea, Taiwan, Singapore, and Hong Kong—none of which is a democracy in...

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pp. 50-64
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