Brisk economic development, until take-off stage, requires elements of predictability and popular conformity ensured, generally, by a well-intentioned, strong and successfully imposing State. Once that is achieved, it helps in creation and strengthening of institutions—the hallmark of a democracy.
By Jagvir Singh
NITI Aayog CEO Amitabh Kant’s nonchalant linkage of ‘too much democracy’ to India’s comparatively slow economic growth, notwithstanding his clarification in a December 11 Indian Express article, prompted Shekhar Gupta to pen a Business Standard piece to elaborate importance of democracy for economic progress. That encouraged this author to see through different territories sitting comfortably at citadels of economic development or on its course and extent and maturity of democracy has a bearing on this. They fall in three categories.
First: the erstwhile colonisers and countries having geographical and cultural contiguity thereto, i.e. the capitalist Western Europe bloc. Abundant raw material from their colonies and the Industrial Revolution built their economies. As they prospered, they also built democratic institutions. Steadily, economic growth and democracy webbed a virtuous cycle, leading to universalisation and standardisation of objective administrative processes and their gradual internalisation by their citizens. It ensured certainty in anticipation of business regulatory processes and social stability, which made them attractive to investors, both indigenous and foreign.
Second: new nations whose lands were initially colonised by the first group and who eventually became their permanent inhabitants, with aboriginal populations made extinct by mass displacements, destructions and homicides. Canada, the US, Australia and New Zealand make this group. As they had all benefits of the first group, except geographical proximity, mainly because of their constituents coming from colonising countries, economic and consequent democratic institutional growth there also experienced a similar trajectory.
The third group, interestingly, is mainly constituted by countries that did not benefit from colonising others, though some of them were themselves colonised formerly. But these have been or are territories where initial brisk development during what Walt Rostow referred to as ‘preconditions for take-off’ and ‘take-off’ stages of development occurred when strong-willed autocrats enforced revolutionary changes in governance. There also, it was only after successful completion of take-off stage that democratic institutions started mushrooming.
Gupta mentions facts right, but draws wrong conclusions. Democracies never led any such countries past take-off stage, when an economy starts self-generating, self-propelling and self-accelerating.
One of Rostow’s conditions for success is ‘a political, social and institutional framework which … gives growth an on-going character’. It also means decisive leadership and subjects’ general tendency to be conformists to new rules of governance prescribed by an imposing leadership. South Korea’s ‘authoritarian’ President Park Chung-hee ushered in remarkable economic growth, exhorted his countrymen to ‘trade their individual choices and freedom for larger community good’, and laid foundations of a developed, democratic and happy Korean society. Lee Kuan Yew shunned populism, embraced meritocracy, withstood criticism of civil liberties’ curtailment, but built an affluent and truly democratic Singapore. Gupta mentioned Taiwan—it was under one-party dictatorship inherited from his father by Chiang Ching-kuo that multiple construction-development projects were launched in a single move that contributed to the famed ‘Taiwan Miracle’. The resultant robust economic growth led later to mature democracy there.
Gupta quoted Japanese ambassador. As Japanese industry is migrating from communist China, regional democracies and federations are not attracting them. India comes last in democratic Japan’s list of countries under its ASEAN Supply Chain Diversification Support Program, behind unitary and ‘undemocratic’ Vietnam, Cambodia and Thailand. Of course, there are also other factors responsible for additional attraction for these countries, whose analysis merits a separate OpEd piece.
The above leads us to one uncomfortable but inevitable inference. Brisk economic development, until take-off stage, requires elements of predictability and popular conformity ensured, generally, by a well-intentioned, strong and successfully imposing State. Once that is achieved, it helps in creation and strengthening of institutions—the hallmark of a democracy. Europe saw it during the Industrial Revolution, when today’s democracy was still a distant dream.
Strong leadership capable of taking revolutionary decisions and procuring their enforcement from regulators and regulated alike is a common factor in all these cases. The cycle, discernibly, is: conformism commanded by strong, decisive and probably autocratic dispensation leading to brisk and irreversible economic growth past pre-developed stage, building mature and self-sustaining democracies and, eventually, a virtuous cycle of democracy and economic development propelling each other. Notwithstanding the above, I shall loathe favouring brisk economic growth to democracy.
The author is founding partner of Jupiter Law Partners