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Democracy and Development: Cruel Dilemma or Symbiotic Relationship?

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  • Jagdish N. Bhagwati

Abstract

The paper dissects the hypothesis that democracy is inimical to economic development. The historical origin of this perspective is presented and its key theoretical and empirical assumptions are examined and assessed. The chief conclusion is that there is no necessary tradeoff between democracy and development. When compared to authoritarian regimes, democracy is more likely to foster an environment that facilitates the innovative and entrepreneurial process so essential for sustained development. On the other hand, democracy is better for development only when accompanied by an expansion of markets and competition. Democracy without markets is unlikely to deliver significant growth. In this context, liberalized international trade can act in a productive symbiosis with democratic institutions to promote development by facilitating bilateral flows of ideas, knowledge, goods, services, and technology.

Suggested Citation

  • Jagdish N. Bhagwati, 2002. "Democracy and Development: Cruel Dilemma or Symbiotic Relationship?," Review of Development Economics, Wiley Blackwell, vol. 6(2), pages 151-162, June.
    • Handle: RePEc:bla:rdevec:v:6:y:2002:i:2:p:151-162
    DOI: 10.1111/1467-9361.00147
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    Cited by:

    1. Oluwole Owoye & Olugbenga A. Onafowora, 2018. "The Role Of Educated Leaders In Economic Growth And Development: Evidence From Central African Republic And Singapore," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(01), pages 81-102, November.
    2. Jac C. Heckelman, 2010. "The Connection between Democratic Freedoms and Growth in Transition Economies," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 56(2), pages 121-146.
    3. Shakeel Qadir & Muhammad Tariq & Muhammad Waqas, 2016. "Democracy Or Military Dictatorship: A Choice Of Governance For The Economic Growth Of Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 12(1), pages 39-51.
    4. Serikbayeva, Balzhan & Abdulla, Kanat & Oskenbayev, Yessengali, 2020. "State capacity in responding to COVID-19," MPRA Paper 101511, University Library of Munich, Germany.
    5. Younes Boujelbene & Nedra Baklouti, 2021. "The Causal Probabilistic Relationship Between Economic Development and Democracy: Evidence from Bayesian Networks Analysis," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 27-42, March.
    6. Kanybek Nur-tegin, 2014. "Entrenched Autocracy or New Democracy: Which Is Better for Business?," Kyklos, Wiley Blackwell, vol. 67(3), pages 398-419, August.
    7. Mireille Razafindrakoto & François Roubaud, 2005. "Les pauvres, la démocratie et le marché : une analyse à partir de trois séries d'enquêtes auprès de la population malgache," Revue d’économie du développement, De Boeck Université, vol. 13(1), pages 53-89.
    8. Jessica Henson Decker & Jamus Jerome Lim, 2008. "What fundamentally drives growth? Revisiting the institutions and economic performance debate," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(5), pages 698-725.
    9. Gonçalves Junior, Oswaldo & Braga Martes, Ana Cristina, 2015. "Democracy, markets and rural development: The case of small goat-milk farmers in the Brazilian northeast," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 16(3), pages 25-33.
    10. Khurram Jamali & Kirsten Wandschneider & Phanindra Wunnava, 2007. "The effect of political regimes and technology on economic growth," Applied Economics, Taylor & Francis Journals, vol. 39(11), pages 1425-1432.
    11. Tang, Sam Hak Kan & Yung, Linda Chor Wing, 2008. "Does rapid economic growth enhance democratization? Time-series evidence from high performing Asian economies," Journal of Asian Economics, Elsevier, vol. 19(3), pages 244-253, June.
    12. Dereje Alemayehu, 2022. "Challenges to The Assumption That Economic Success Could Enhance State Legitimacy in Africa, Ten Years Later," Development, Palgrave Macmillan;Society for International Deveopment, vol. 65(2), pages 161-177, December.
    13. Muhammad Ashraf & Nawaz Ahmad & Sheema Haider3, 2016. "Antecedents Of Turnover Intentions: A Study Of Karachi Business Schools," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 12(2), pages 12-10.
    14. Robert Neumann & Peter Graeff, 2010. "A Multitrait-Multimethod approach to pinpoint the validity of aggregated governance indicators," Quality & Quantity: International Journal of Methodology, Springer, vol. 44(5), pages 849-864, August.
    15. M. Adnan Kabir & Najib Alam, 2021. "The Efficacy of Democracy and Freedom in Fostering Economic Growth," Emerging Economy Studies, International Management Institute, vol. 7(1), pages 76-93, May.
    16. Benno Torgler, 2021. "Symbiotics > Economics?," CREMA Working Paper Series 2021-15, Center for Research in Economics, Management and the Arts (CREMA).
    17. Rui Tang & Shiping Tang, 2018. "Democracy's Unique Advantage in Promoting Economic Growth: Quantitative Evidence for a New Institutional Theory," Kyklos, Wiley Blackwell, vol. 71(4), pages 642-666, November.
    18. Asiye TÜTÜNCÜ, 2020. "The Effect of Democracy on Economic Growth in Developing Countries," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(44).
    19. Eduardo Sanz-Arcega, 2013. "The Nonexistence of the cruel dilemma or the unlikely prosperity of the economic system of freedom in the absence of it," Documentos de Trabajo (DT-AEHE) 1308, Asociación Española de Historia Económica.
    20. Paudel, Jayash & de Araujo, Pedro, 2017. "Demographic responses to a political transformation: Evidence of women’s empowerment from Nepal," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 325-343.
    21. Narayan, Paresh Kumar & Smyth, Russell, 2006. "Democracy and Economic Growth in China: Evidence from Cointegration and Causality Testing," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 2(1), pages 1-18.

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