Is an Authoritarian Government Better for Economic Development Than a Democracy?
Introduction
Authoritarian regimes are the new hot topic in history classrooms. Children listen anxiously yet eagerly as their teachers educate them on the unfortunate citizens' hardship and dismay. The latter has faced the relentless wrath of their nation's heartless dictator. Names such as Hitler, Stalin, and several more have become synonymous with fear and terror; the mere mention of their chilling names can evoke horrifying memories of their past atrocities. Like how they seized power, dictators ruled their helpless civilians barbarically and utilised the power of fear and a lack of freedom of speech to tackle any possibility of subversion and cement their position as rulers. Nowadays, authoritarian governments are under heavy criticism for their lack of civil liberties and political participation. For example, western powers have condemned China for their supposedly brutal actions involving Hong Kong and Taiwan. However, some authoritarian governments have become prosperous despite their faults and have established their nation as wealthy and powerful. Nations like Saudi Arabia, Russia, and China are now the nineteenth, eleventh, and second highest GDP nations.
According to the Cambridge English Dictionary, authoritarianism is "the belief that people must obey completely and not be allowed the freedom to act as they wish."
Whereas on the opposite end of the spectrum, democracy is "the belief in freedom and equality between people, or a system of government based on this belief, in which power is either held by elected representatives or directly by the people itself." Democracy is a policy adopted by nations such as the UK, Norway, and the USA.
Economic development occurs in a country when there is an improvement in citizens' overall standard of living. To measure economic development, I will be looking at a country's HDI and real GDP.
In this essay, I will investigate the effects an authoritarian government has on economic development. I will focus on China primarily, as I believe China the most pertinent since China has maintained its authoritarian labelling since Mao's establishment of the PRC on October 1st, 1949, while also establishing itself as a global superpower rivalling the democratic United States of America. Furthermore, China is quite a relevant example since its growth has occurred mainly during the late 20th century and the early 21st century.
Economist Global Democracy Index
Throughout this essay, I will use the Global Democracy Index from the Economist to judge whether a county is democratic or authoritarian.
China – from an agricultural society to a global superpower
China is arguably the most successful authoritarian government and boasts the second-highest GDP in the world. However, China was not always the global superpower it is today.
Since the establishment of the People's Republic of China in 1949, China has experienced significant HDI growth, especially during the reform and opening officiated by the new President, Deng Xiaoping, in 1978.
Deng's economic reform brought a remarkable period of unparalleled economic development. As stated by the UN Human Development Report in 2019, 740 million people have been lifted out of poverty, taking up more than 70% of the total population lifted out of poverty worldwide. In the meantime, of rapidly increasing national income, significant improvement is also seen per capita years of education and life expectancy in China, which would boost the country's HDI, representing an increase in economic development. Furthermore, China's per capita income has increased 25-fold, which causes an increase in the country's real GDP.
President Xi's Belt and Road Initiative (BRI) allows China to export massive quantities of metals, find new markets, and ensure state-owned enterprises' survival. Most importantly, the BRI allows the CCP to consolidate power to undermine growing democracies and popularise their authoritarian model. This approach illustrates the importance of power and how it can bring economic development.
Deng's famous quote, "It does not matter whether a cat is black or white, as long as it catches mice," highlights his pragmatic approach to the economy. However, despite Deng's easing of Mao's anti-capitalist views, he was still a hard-line communist. He strongly opposed the idea of democracy, which many Chinese citizens believed would be the fifth modernisation of China. Therefore, 20th to 21st century China maintains its non-democratic position and is, therefore, a suitable representation of authoritarianism's effects on economic development.
Singapore, under Lee Kwan Yuen, is another successful example. Lee was a benevolent dictator, and during his tenure, Singapore's GDP increased from 704.8 million USD to 36.14 billion USD, and it remains one of the most prosperous countries in Asia today.
Failures
Despite the successes of China, not all authoritarian governments can bring economic development. (Stephanie Rizio and Ahmed Skali, 2019). A study by the Royal Melbourne Institute of Technology and Victoria University in Melbourne analysing autocratic governments from 1858 to 2010 showed that they are inconsequential or damaging to the economy.
One pertinent example is Turkey. Turkey's President Erdogan has consolidated his presidential powers and attacked the judicial and legislative branches' independence while restricting freedoms. Between the years 2013 and 2016, Turkey's GDP has fallen by about 60%, representing a decline in economic development. Moreover, Turkey is experiencing double-digit inflation and an unemployment rate of 13.6 in February 2020. These factors will harm GDP because of a low level of foreign investment and lack of consumer expenditure caused by a smaller workforce. However, Turkey still maintains a high HDI, which increased to 0.806 from 0.761 in 2014 when Erdogan came to power.
Statists 2020 H. Plecher
Statists 2020 H. Plecher
A further example of the damages caused by authoritarian governments is the level of HDI in African nations. As shown by the diagram on the previous page, authoritarian regimes dominate the continent; African countries represent 19 out of the 20 lowest HDI countries, according to a 2020 HDI report, while also representing 18 out of the 20 lowest real GDP per capita nations.
Effectiveness in LDCs
(Lawrence Saez and Julia Gallagher, 2009) mention the belief that democracies' argumentative nature can impede development and that authoritarian government can bypass these hindrances. These beliefs would suggest that South East Asia and Africa would contain some of the wealthiest countries – however, this is not the case.
William Dick, 1972
As shown by the table, competitive governments (democracies) perform better in Africa and America in terms of economic growth, indicating increases in economic development. This data suggests that competitive governments are more suitable in Africa and America, whereas autocratic governments are more efficient in Europe. Europe, however, contained a small data pool and is therefore not very reliable.
The table below analyses real GDP growth rates varying by country. The table further implies that authoritarian regimes are less useful for economic growth than hybrid regimes and democracies.
Table 3, on the other hand, suggests that authoritarian regimes can be effective and that they are more efficient below the median real GDP per capita.
Table ranking economic growth (William Dick, 1972)
Analysis of democracies
According to DW, democratic governments tend to have an average higher economic development level, regardless of whether education, life expectancy, or per capita income. This idea is further supported by democratic countries such as Norway, Sweden, and Denmark, which lead the democracy index while also holding high HDI levels.
Norway, for example, has a democracy index rating of 9.87 and an HDI of 0.954, making it the best in both categories. However, when looking at real GDP per capita, it is placed 11th and behind authoritarian governments such as Singapore and Qatar. This data may highlight the importance of Norway’s socialist values, which lead to a high HDI value due to public goods and services. Similarly, the UK has a high HDI of 9.20 but is only 27th in real GDP per capita, placing it below numerous middle eastern autocrats.
South Africa, for example, has a low HDI of 0.705 and real GDP per capita 6,374 USD (2018). These data metrics show that democracies are flawed and do not always bring high economic development levels like the UK and Norway.
Verdict
To conclude, neither authoritarian nor democratic governments are better at achieving economic development. Both governments have their advantages and can attain economic development, as shown by autocratic governments like China and Singapore, and Norway and the UK for democratic countries. This judgment is supported by (William Dick, 1972), who quotes Bhagwati (1966), stating that authoritarian governments benefit as their structure shields them from the electorate's rigorous and judgements. Furthermore, democratic governments are more likely to invest in social welfare to help improve the standard of living, which, in turn, increases the HDI. Authoritarianism seems to work better in nations where the culture supports it. For example, society holds more importance to individuals due to communist history, making authoritarianism a better option than democracy.
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