The Optimist

¡Viva la Recesión!

Are bad economies good for democracy?


As the wave of democracy protests continues its spread across the Middle East, it is not just regimes that are flailing. A cherished shibboleth of modernization theory — that democratic development is the result of economic growth — is looking a little more waterlogged, too. It wasn’t economic growth, after all, that pushed Tunisians, Egyptians, and now Libyans and Yemenis out into the streets. Rather, what those countries share, aside from autocratic regimes, is quite the opposite: Their recent economic performance was all too stagnant.

At least since the work of American sociologist Seymour Martin Lipset half a century ago — and probably since Karl Marx — the idea that wealth is the handmaiden of democracy has been a received wisdom of political scientists everywhere. Recently, Harvard University economist Benjamin Friedman has gone a step further in his book The Moral Consequences of Economic Growth to suggest that continuously expanding incomes are a key factor in maintaining inclusive democracies.

But is it actually true that countries that get richer get more democratic? In the developing countries of the Middle East and North Africa, it certainly isn’t miracle growth rates that lie behind the stunning recent outburst of fervor for political rights. Average GDP per capita growth in the region has limped along at a little higher than 1 percent a year over the past 30 years (though it picked up some in the last decade). And far from the development of a large, independent middle class of entrepreneurs, the region has seen sclerotic private-sector growth, with business opportunities limited to a privileged, increasingly elderly elite. According to the World Bank, the number of registered firms per 1,000 people in the Middle East and North Africa is less than that in sub-Saharan Africa. The average length of time people in the region have to work before being given a management position is 14 years. In East Asia, it’s half that.

The much more plausible story linking economic performance to political change in the region is this one: Governments created expectations in a bulging youth population that they then singularly failed to meet. College enrollment in Egypt has climbed from 14 to 28 percent since 1990, and from 8 to 34 percent in Tunisia. Cairo University alone has around 200,000 students. But while educational opportunities abound, the weak performance of the economy ensures that jobs do not. Unemployment among 15 to 24 year olds in the Middle East and North Africa is the highest of any region in the world, averaging more than 25 percent (in Egypt and Tunisia the numbers are even higher). And discontent with limited opportunities will only be spiked by rising food prices. To the extent that economic performance played a role in recent events, it was by fanning a sense of injustice at hardship — not by creating a class of bourgeois de Tocqueville fans.

Nor is the Arab world an outlier. While rich countries everywhere are on balance more democratic than poor ones, it does not appear that getting richer necessarily leads to more — or more stable — democracy. In a 2009 study, MIT economist Daron Acemoglu and colleagues demonstrated that the apparently strong link between income and measures of democracy around the world at any one point in time disappears when you look at changes in income and rights over time. They conclude that “high levels of income per capita do not promote transitions to democracy from non-democracy, nor do they forestall transitions to non-democracy from democracy.”

In fact, if the last century’s worth of global evidence suggests anything, it is that countries seeing a decline in incomes move toward democracy considerably faster than countries that have seen income growth. The communist bloc collapsed in the 1980s when growth had slowed, not in the 1950s when growth was rapid. India has grown later and more slowly than China, yet was democratic far earlier and remains more democratic to this day. (Indeed, Gandhi’s civil disobedience movement first got off the ground because poor Indians couldn’t afford salt.) Newly independent African states moved toward autocracy in the 1960s and 1970s, a period of comparatively successful economic performance. They moved back towards democracy in the 1980s and 1990s, when growth was markedly slower.

To say that recessions speed along the fall of odious regimes is not to say that they are a necessary prerequisite for them; indeed, the overall link between economic shocks and political instability is still subject to debate. Other factors, including urbanization and vastly improved communication — from satellite TV to Facebook to Twitter — have clearly played a role, as has the simple fact of the willingness of people in Egypt, Tunisia, and elsewhere to brave violence in the name of democratic reform.

In that regard, the Arab world’s uprisings are the latest manifestation of democracy as the new normal, rather than democracy as the natural byproduct of wealth. Nowadays, if you are going out to demonstrate (and you aren’t in the employ of an autocratic regime), you are going out to protest in favor of democratic change. Riots between fascists and communists over which totalitarian model should be put in place of the kind that occurred in prewar Germany are, thank goodness, a thing of the past. The percentage of people in favor of the statement “democracy may have its problems, but it’s better than any other form of government” in World Values Surveys ranges from a low of 81 percent in the former Soviet Union to 88 percent in the Middle East and 92 percent in the West.

And while economic growth doesn’t necessarily pave the way for a democratic transition, people who are agitating for the latter often have a strong interest in encouraging the former, too. The upheavals in the Arab world demonstrate this as well as anything: When a 26-year-old man named Mohamed Bouazizi set himself on fire in front of a Tunisian government building in December, he wasn’t demonstrating in favor of democracy — he was protesting his treatment by local officials and police, which was keeping him from running a fruit stall. The act sparked the protests that brought down President Zine el-Abidine Ben Ali, and then rippled throughout the region. If a democratic Arab world can provide greater opportunities for a well-educated and dynamic young population to compete for jobs and markets on a level playing field, it will create a path out of stagnation — and turn modernization theory on its head. And that may finally address the complaints of the man who started it all.

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