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The Value of Democracy

The Value of Democracy - The Value of Democracy Why Some...

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The Value of Democracy: Why Some Dictatorships Economically Outperform Some Democracies When we say dictatorship what is it that comes to mind? For older Americans it might be the image of Stalin during cold war era, Soviet Russia. A more modern image may be Kim Jung il standing on the balcony of a palace saluting the passing military units beneath him. Certain ideas are glued to the perceptions we have about dictatorships, some with good reason. For instance limited political freedom or civil liberties are synonyms associated with authoritarian regimes. Most Americans may also have a general image of a country of dire poverty, such as the examples of Soviet Russia and North Korea. However this is not always the case. On occasion there have been examples of successful dictatorships that do significantly better than democracies. So why do some dictatorships economically outperform some democracies? Though there are numerous examples of successful dictator ships for simplicity reasons I will primarily be using China as my example of a successful dictatorship. Because China has become a global superpower through commerce rather than military presence it stands a good chance of standing the test of time, when considering its economic viability. Before answering the question of why some dictatorships outperform democracies we have to look at the forces that create a dictatorship. Olsen’s (1993) view on the matter is: Under anarchy, uncoordinated competitive theft by “roving bandits” destroys the incentive to invest and produce, leaving little for either the population or the bandits. Both can be better off if a bandit sets himself up as a dictator –a “stationary bandit” who rationalize theft in the form of taxes. He goes on to say, the conditions for a lasting democracy are the same necessary for the security or property and contract rights that generates economic growth. With this
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statement Olsen is implying that with mere social stability and property right you will have economic growth. This is a somewhat limited view because if it were universal truth than the countries that were primarily agrarian based economies would prosper, yet we know that they do not. He also claims that it is in a dictator’s best interest to confiscate property when faced with a short time line. Durham(1999) shows direct contrast to Olsen’s view by saying, “that discretion decreases growth in advanced areas, and, contrary to theory, inhibits investments in poorer countries. Also, single-party dictatorships have higher investment ratios.” Robinson (1995) theorizes more along the lines of Olsen but goes even further and believes it is in a dictator’s best interest to keep the state underdeveloped to maintain power. This may explain
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