Yes if you are an individual, but probably not if you are an entire country. As the figure below shows, there are very few countries that have developed beyond $5,000 in 2005 PPP dollars without becoming democracies somewhere along the way (unless they are an oil economy).
This scatter plot covers all countries with population larger than 1 million and with fuel exports less than 50% of export revenues. (Democracy is measured by the Polity score, which runs from -10 to +10).
The exceptions in the chart are interesting. Singapore is the most intriguing, of course, as one of the richest countries in the world, but with what Polity considers an authoritarian regime. Belarus is one of the Soviet-era holdovers. Tunisia and Jordan – well, we know what has happened recently in that part of the world.
Which leaves China. Will China remain an exception and develop into another Singapore? Or will it go in Tunisia's direction?
My guess is that this question will leave a larger imprint on the world economy than the double-dip we seem to be entering at present.
There is a movement amongst some parts of Chinese intelligensia (e.g Pan Wei) to adopt Singapore as a model - particularly because of the ethnically Chinese character of the state. There's a huge number of issues adopting it to China though, including size and the lack of an authority figure like Singapore's Lee. Not the least of though is the recent election results in Singapore. The opposition made modest gains, but it's widely interpreted as Singapore moving towards a real democracy and away from a pseudo democracy.
At greater length here if you're interested http://clubtroppo.com.au/2011/07/16/a-new-big-idea-for-china/ . It will be fascinating to watch, even if it takes decades to tell the story.
Posted by: RichardHTGreen | August 05, 2011 at 04:29 PM
What about Hong Kong and Macau ? If you consider them independently from mainland China, I think they would be pretty close to Singapore on the chart even though they are different kinds of "dictatorship". Maybe Hong Kong could be a more suitable model for mainland China than Singapore
Posted by: FLachenaud | August 05, 2011 at 04:57 PM
Is there any chance of getting the complete list of countries on the plot?
Posted by: tomslee | August 05, 2011 at 05:59 PM
Then, there are evidently rich democracies whose institutions are prone to be hijacked by ideological nutjobs who have no qualms about setting those countries on a path of political and economic down-spiral. I am afraid how a rich democracy comes to this is the real question. On a somewhat related note, Larry Summers noted in a NYT article today that “No one is satisfied with the efforts to reduce foreclosures and support the housing market,” But “... the barrier to doing more has not been ideology or any solicitude for the financial sector..." Rock on, dude!!
Posted by: Murat Iyigun | August 06, 2011 at 09:06 PM
It's interesting to see which countries are actually developed, by checking the GINI score... per capita is nice, but it doesn't indicate that a country is wealthy, only that some of its citizens are... if you combine GINI with Income per capita, you get a better sense
Posted by: 21tigermike | August 06, 2011 at 10:27 PM
Dani
The question you must follow with, is "once a country has enough of a middle class to develop democracy, how long can that country remain a democracy before Schumpater's problem of public intellectuals converts it back to totalitarianism?"
:)
Posted by: Curtd | August 06, 2011 at 11:51 PM
Aside from the excemptions, this is perfectly matching what Amartya Sen has been emphasizing for years. You (as a society) cannot improve economically without some basic rights.
Indeed, I wouldn't wonder if what 21tigermike proposed would change the picture, at least for China.
Posted by: Zielonygrzyb.wordpress.com | August 07, 2011 at 01:46 AM
The graph and post are both somewhat misleading; countries with a Polity score of six or above are democracies, according to Polity's own classification. Nevertheless, the main point is correct (but hardly novel): there is a strong correlation between democracy and development.
Posted by: Dan O'Neill | August 08, 2011 at 11:32 PM
"Yes if you are an individual, but probably not if you are an entire country." Do rich individuals generally care about others?
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Posted by: www.google.com/accounts/o8/id?id=AItOawlpBDXBuSlAoDOIdRpl7Cj180yaNdVijHc | August 09, 2011 at 10:36 AM
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Posted by: Donald Trueman | August 09, 2011 at 01:06 PM
Another thing that jumps off that chart is that there are only 2 dots between 0 and 5 exclusive and 7 inclusive. Also who is that dot polity=10,GDP~=$2,000?
Posted by: Eric Dimick Eastman | August 10, 2011 at 07:44 AM
First of all, a single example proves that it is possible, so the answer is YES.
In addition, there are many reasons industrialization started first in the West, and democracy may not have been a necessary component. Even if you argue that democracy mattered greatly in the process, there may also be a difference between becoming rich, highly developed societies from scratch, and doing the same now.
Lastly, it bears remembering that most of the dots in the top right represent small countries. Population-wise, the balance may look a good lot different.
In the end, this question invariably has to address the difference between India (relatively democratic) and China (pretty autocratic). With every possible advantage, India has severely underperformed its autocratic neighbour for decades. It is difficult to square this with the idea that democracy is a necessary component of developing a country now.
Posted by: D | August 10, 2011 at 12:33 PM
Indeed, socio-economic prosperity establishes a wonderful trigger mechanism for democratization. And affluence is even more important for the SURVIVAL of democratic regimes (see Paul Collier on this)
After the Arab Spring, I too had my eyes on China, waiting for some action there.
But political scientists quickly hailed with bad news:
Apparently, China had developed a wonderfully DELIBERATIVE system of governance! Except that it's not the liberal, Habermasian type that the West would wish for. It's a highly regimented, dare I say, authoritarian form of deliberation channelled through the long tentacles of the Chinese Communist Party.
So there you have it... With 7-8% growth and all that trade surplus, what we get is deliberative authoritarianism, instead of democratic "Springs" in China...
Posted by: Evren Celik Wiltse | August 29, 2011 at 10:46 AM
How about taking a millennium view? Was China and other world powers not on top of the world economically for centuries before democracy as a form of government became a reality?
Posted by: Philip Law | August 29, 2011 at 01:31 PM
I am curious as to your thoughts regarding the following:
(1) How is "rich" defined? Is there a distributional component? While the U.S. is conventionally understood as the "richest" country, many citizens cannot be credibly classified as being rich (e.g. 75% of working individuals earn less than $50k US per annum).
(2) Can a democracy sustain wealth and its status as a rich country in the presence of openness to globalization? The temptations of wage arbitrage, skirting costly environmental and labor standards, and the siren song of conditional access (even favored access) to rapidly growing emerging markets is proving irresistible. Any U.S. firm experiencing success in China likely has mortgaged its future for a short term gain. They have provided core technology to a Chinese firm that will transition from a partner to a competitor in China, and then everywhere else.
(3) Can a democracy like the U.S., that has inarguably been coopted by MNCs on trade policy issues, ever align the interests of the working class with the interests of the MNCs. This seems critically important to ensure growth, competitiveness, and productivity gains over time.
Posted by: Michael Turner | September 07, 2011 at 09:23 PM
The graph and the message are both somewhat misleading; country with a Polity score of six or more are democracies, as classified by Polity own. However, the main point is correct there is a strong correlation between democracy and development.
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