Acemoglu et al. (2019) show evidence that democracy engenders economic growth by attracting more investment, facilitating increased educational attainment, spurring economic reforms, decreasing social restiveness and thus the security of lives and property, and the provision of public services.
Whether Africa’s democratic experiment thus far has led to differential economic development is a subject of debate. Many complain that the democratic process is expensive and sluggish, with an increasingly number of Africans beginning to question whether western-style or liberal democracy is the development panacea it is touted to be. Nonetheless, there are studies that show democracy has engendered economic growth in Africa. But there is also evidence of democratic decline and disillusionment. According to Cheeseman (2019), Africa’s democratic progress is stalling, with the continent’s countries divided down the middle between autocracies and democracies. Cheeseman (2019) also notes a worrying trend: African autocracies have become more repressive and their democratic counterparts have not shown much progress. With evidence that democracy does engender growth and ample evidence to the contrary, what then should Africa do?
Evidence On Democracy-Development Nexus Is Mixed
Acemoglu et al. (2019) show evidence that democracy engenders economic growth by attracting more investment, facilitating increased educational attainment, spurring economic reforms, decreasing social restiveness and thus the security of lives and property, and the provision of public services. Democracy also engenders economic growth by making opportunities available to most of the people as opposed to a powerful few. For instance, Acemoglu and Robinson (2012) argue that “inclusive political institutions, vesting power broadly, would tend to uproot economic institutions that expropriate the resources of the many, erect entry barriers and suppress the functioning of markets so that only a few benefit.”
In sum, Acemoglu et al. (2019) posit that as democracy encourages economic reforms, increases human capital, raises state capacity, improves public service delivery, increases investment and reduces social unrest, economic growth occurs consequently. Acemoglu et al. (2019) also find that their results of the beneficial effects of democracy on economic growth are robust across developing and advanced economies. When a country adopts a democratic form of government, Acemoglu, et al. (2019) assert, its GDP per capita rises by at least 20 per cent over the subsequent 30 years. Acemoglu et al. (2019) also find this effect to be easily attained in countries with already high levels of educational attainment.
Conversely, Gerring et al. (2005) argue that democracy has no significant effect on economic growth; and if at all, it is negative. Similarly, Gerring, Thacker and Alfaro (2012) do not find substantial human development gains from democratic transitions. Instead, a country’s poor only begin to see substantial gains from democracy when it is longrunning. To some extent, this corroborates Ross (2006) findings that while democracies tend to spend relatively more on education and health, the main beneficiaries tend to be non-poor groups. There are more nuanced arguments. Baum and Lake (2003) investigate the indirect and direct effects of democracy on growth using a 30-year data set of 128 countries and find no statistically significant direct effect on growth. Instead, they find that democracy’s effect on growth are “largely indirect through increased life expectancy in poor countries and increased secondary education in nonpoor countries.”
Varshney (2005) actually argues that relative to dictatorships, democracies have recorded a lacklustre performance with respect to poverty alleviation. They have not failed in the task, but they have also not been spectacularly successful. In fact, Charron and Lapuente (2010) show evidence that poor countries may be better off with dictatorships until they become wealthy when “good bureaucracy and administrative services and lower corruption are better provided by democratic rulers.” Besides, Collier and Rohner (2008) find that democracy actually increases the risk of political violence for countries below the US$2,750 income per capita threshold. While they do not altogether discountenance the benefits of democracy, their evidence clearly shows the net benefits of democracy for poor countries are not robust.
Rafiq Raji, a writer and researcher, is based in Lagos, Nigeria. Twitter: @DrRafiqRaji
References available at https://rafiqraji.com/2019/12/27/macroafricaintel-democracy-african-development/