This paper from the Overseas Development Institute analyses the complex relationship between democracy and development.
The paper highlights the importance of democracy as a process and development as an outcome. The evidence on whether democratic or authoritarian regimes promote development more effectively remains mixed. Given that different political regimes may be capable of implementing similar policies, it may be useful for donors to consider the kinds of institutional arrangements that are in place instead of focusing solely on regime-type.
State institutions matter and the orientation and effectiveness of the state are the critical variable explaining why some countries succeed whereas others fail in meeting development goals. Many of the countries stuck in incomplete democratisation processes, especially poor ones, are not only trying to democratise but more fundamentally to build effective states. Democratisation does not automatically yield benefits for equity or state capacity, however.
Further findings are that:
- Democratisation and state-building may pull in different directions. For instance, democratisation often involves establishing checks and balances and diffusing power more evenly across a greater number of actors within and outside government, while strengthening state capacity may call for greater autonomy and centralisation of power.
- Economic development is neither a necessary nor a sufficient condition for the emergence of democracy, but may help to sustain democracy because it can reduce class struggle. As a number of authors note, equitable distribution of wealth also helps to maintain democracy.
- Authoritarian regimes may be conducive to development but an authoritarian ruler may not always be interested in playing a positive role in the developmental process.
- The good governance agenda tends to assume that democracies will lead to policies favouring redistribution. However, in many developing countries, democratisation has not been associated with redistribution.
When donors make choices about how to support democracy and how to promote development they need to take account of how their activities in one realm affect the other. The international community should also note the following:
- A democracy should not be expected to produce better socio-economic outcomes simply because it is a democracy.
- Democratisation can increase corruption, and may not necessarily improve growth, poverty or inequality.
- A combination of low state capacity and low human development in poor countries poses challenges for external democracy promotion and protection.