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Beyond growth vs democracy

Beyond growth vs democracy
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First Published: Wed, Aug 27 2008. 11 56 PM IST

Illustration: Jayachandran / Mint
Illustration: Jayachandran / Mint
Updated: Wed, Aug 27 2008. 11 56 PM IST
China’s Olympic glory and India’s inability to decide on a car project at Singur stand in stark contrast. It has revived the old communist myth: So long as people get to eat, why should democracy matter?
Illustration: Jayachandran / Mint
What gives currency to such notions is the West’s current economic woes and inability to do anything about Russia’s aggression in Georgia and the US inability to restore order in West Asia. For those who measure success by what it appears to be, this can only mean that democracy does not equal success. So who cares?
The world does. So do economists. In a recent article in the Financial Times, Pranab Bardhan showed the choices were not as clear as Chinese and Russian “successes” show them to be. His work builds on a vast, inconclusive literature on the subject. If Singapore is a successful authoritarian government, Botswana, Costa Rica and India are examples of decolonized nations successfully marching to development, via democracy. In between, of course, is a vast pool of failing democracies and dictatorships. In 1993, two political scientists, Adam Przeworski and Fernando Limongi, reviewed statistical evidence on the linkage between democracy/dictatorship and economic growth. They found it to be split evenly between the two. Why is this so?
Economists agree that secure property rights and high investment are important ingredients of economic growth. In the world of political animals, things, of course, get messy. Take investment. In India, for example, politicians splurge money senselessly. They think this is important to win elections. This does not happen in a dictatorship such as China. But in China there is no right to property. Yet, the two politically distinct economies are on a high-octane growth path.
We believe the issue should not be judged by solely on grounds of success. India, for most of the time after independence, was a poor country where population grew faster than gross domestic product. Yet, the average Indian never spoke against democracy. Economic growth is, no doubt, important: For the poor, democracy has no meaning if they can’t have basic amenities of life.
Bardhan has argued that a vigilant and proactive public is what can propel politicians to take the right economic decisions. This is easier said than done, especially in a country such as India. The travails of the Tatas show one reality; that of chief ministers stampeding to woo the car project to their states shows another. For creating such a mixed state of affairs India is, perhaps, a unique country.
Does democracy matter? Write to us at views@livemint.com
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First Published: Wed, Aug 27 2008. 11 56 PM IST