Does democracy hurt or help economic performance? There are few questions in political economy that have attracted more attention over the years. Thinking on this subject, in one form or another, goes all the way back to Plato—who favored aristocracy to democracy, and has preoccupied many of the most fertile minds in political philosophy. More recently, with the advent of cross-national data sources and statistical techniques, there have been numerous econometric studies investigating the relationship between political liberties and economic growth | DEMOCRACY AND ECONOMIC PERFORMANCE1 Dani Rodrik Harvard University December 14, 1997 Does democracy hurt or help economic performance? There are few questions in political economy that have attracted more attention over the years. Thinking on this subject, in one form or another, goes all the way back to Plato—who favored aristocracy to democracy—and has preoccupied many of the most fertile minds in political philosophy. More recently, with the advent of cross-national data sources and statistical techniques, there have been numerous econometric studies investigating the relationship between political liberties and economic In policy circles, discussions on this issue inevitably gravitate toward the experience of a handful of economies in East and Southeast Asia, which (until recently at least) registered the world’s highest growth rates under authoritarian regimes. These countries constitute the chief exhibit for the argument that economic development requires a strong hand from above. The deep economic reforms needed to embark on self-sustaining growth, this line of thought goes, cannot be undertaken in the messy push and pull of democratic politics. Chile under Pinochet is usually exhibit no. 2. A systematic look at the evidence, however, yields a much more sanguine conclusion. While East Asian countries have prospered under authoritarianism, many more have seen their 1 Paper prepared for a conference on democratization and economic reform in South Africa, Cape Town, January 16-19, 1998. I am grateful to Sam Bowles for comments and Joanna Veltri for editorial suggestions. 2 See in particular Helliwell (1994) and Barro (1996, Lecture II). These two studies are also a good source for citations on the earlier literature. Przeworski and Limongi (1993) is a good introduction to the conceptual issues. 2 economies deteriorate—think of Zaire, Uganda, or Haiti. Recent empirical studies based on samples of more than 100 countries suggest that there is little .
