Does democracy helps or hinder market oriented reform

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Unformatted text preview: essure groups that causes distortions in resource allocation. ­ Third, democracy puts pressure on the rulers to redistribute ahead of growth. What is required for development is more savings and less consumption. That is easier to achieve under an authoritarian regime that can take unpopular decisions. Does democracy helps development? development? On the other side stand those who belong to the compatibility school. ­ They argue that democracy promotes civil and political rights, property rights, free information flows and the rule of law, all of which are seen as pre­conditions to development. Does democracy helps or hinder market-oriented reform? market-oriented Theoretical arguments – several of which are common to the discussion in the preceding section ­ can be made in favor of both sides. Democracy can reinforce market oriented development in several ways. ­ The freer flow of information helps a market perform better. An accountable and transparent system checks corruption. ­ The rule of law guarantees property rights that helps capitalist production. ­ Democracy may also lead to reforms that transfer resources from privileged sections of the community, say, urban areas, to under­privileged sections, sa...
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