When thinking about a democracy, we do not typically consider how a nation’s wealth, industrialization, urbanization, and education all impact its economic development, and how these factors in turn influence the degree of democracy that is present in a state. Seymour Martin Lipset’s essay on “Economic Development and Democracy” took the argument in a different direction than I would have expected. Lipset emphasized the idea that a state’s economic situation can determine how great of a degree of democracy it is able to maintain, rather than observing the effect of democracies on economic development. The evidence that is presented seems consistent with what we might expect concerning the correlation between higher education and a greater likelihood of maintaining a stable democracy. Lipset also appears to be presenting the idea that since an increase in the factors that determine economic development are desirable, becoming and maintaining a stable democracy should be the ultimate goal for all societies that currently lag behind in world.
Furthermore, the emphasis on wealth illustrates that poorer countries have a greater tendency to breed communist parties and have a greater level of dissatisfaction with their country. Poorer countries with no exposure to the idea of an improved lifestyle also tend to be more conservative, and see no reason to democratize their ideas since everyone else around them thinks and acts similarly.
Though Lipset’s ideas may not be completely new, it is interesting to see the dynamic impact of economics on a democratic form of government, and how these two ideas seem to go hand in hand. This also brings to mind Duverger’s Law – Lipset seems to be proposing his own “law” of sorts, by asserting a strong relationship between democracy and economic development.
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I am not sure if this is in tact with your argument, but it makes me think of Russia. Putin and the top officials are using their economic and political powers to shape their own government, is they never had those wealth/status, would it have ever been possible for Putin to give himself so much power? Economics and the political system seems to go very in hand, the corruptions that give rise to top officials and etc..... who then determines the pattern of their own political system, it then becomes centralized and how can it ever achieve Democratization, especially in developing nations where the most elites are usually in power or the most popular ethnic group or rebel and etc.... It makes me wonder about politics.
I have one criticism for Lipset: his lack of recognition for reverse causality. Are countries more democratic because they are more economically developed (as Lipset argues) or is it because they are democratic and have liberal constitutional regimes that they are more economically developed? That is to say, is economic development driving democratization or is democratization driving economic development. It's very difficult to separate these two effects and figure out which way the causation runs. But finding out the correct causation is integral to analyzing the relationship between the economy and democracy and for those tasked, creating policies that address this reality. I propose that democratization drives economic development which I will explain through Russia, nature of societies/economies, and the world economic regime's views.
In response to Jia, while Russia has seen increased economic development while Putin and his authoritarian regime solidifies its hold on the government, one could make the argument that the economic successes Russia has seen would be even higher if it were a democratic country with rule of law and comparable rights, governance, and institutions like Western industrialized nations. Also we need to remember why Russia has had an increase in revenue: a bubble in oil prices (which are now down to $68 a barrel) and 10 years ago Russia defaulted on its international debt and was on its last legs. Russia's high point comes and goes, and its recent economic success has the potential to be very fleeting because of the economic anomalies of the present and weak underlying fundamentals. It is very likely the authoritarian regime could lose its dominance it currently enjoys.
Going back to attempting to answer the question of economics or democracy driving the other. There have been economics papers I have read that have looked at issues of development, stability, democracy, etc and compared them to such variables as wheat/sugar land ratios (instrumenting for extractive economies, which lead to more paternalistic and less free societies), ethnic legal traditions, and colonial influences (whether it was a settled colony or one that was managed from afar). And we see from all these studies that the institutions that were established in the past have influenced the level of economic development today and the success of present day institutions too.
We see this new philosophy of Institutionalism in the international financial structures of the world. Since its inception, the IMF and world bank always promoted neo-liberal pro-growth policies, thinking that creating economic success and focusing only on GDP growth rates was the right way to go. However we have seen as the century has turned that these institutions have moved away from solely pro-growth policies to more institutionalist policies where political stability, good governance, rule of law, and human rights are respected and consistently upheld. They have now realized that good governance and free stable societies are the best way to achieve long lasting economic success. I think it comes down to one main reason: in liberal democracies, the government is forced to respond to the needs of its people when elections role around and the people have the conditions to properly exercise their freedom to speak their minds and petition the government to address their grievances.
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