is precisely what has happened in the newly industrializing states of the
Third World, where democracy has until very recently been conspicuously
absent in some of the fast growing capitalist economies, notably Brazil,
Singapore, South Korea, Taiwan, Thailand and Indonesia (Leftwich, 1993,
pp. 612–13). The Asian Tigers are sometimes offered as evidence that
authoritarianism is better than democracy for rapid economic development,
though it should be recognized that the conditions which were crucial to
economic success – including a high rate of domestic savings and a large
number of small and medium-sized enterprise – do not appear to be depend-
ent on an authoritarian political regime (Sandschneider, 1991).
There have been different perspectives on whether democracy or author-
itarianism is required to lift a poor country out of economic and social
underdevelopment. The conflictperspective argues that economic develop-
ment needs an authoritarian regime to push through policies needed to facil-
itate rapid growth in the face of resistance. Democracy is regarded as
inherently unstable and permits the expression of powerful pressures to
redistribute and consume resources rather than accumulate and invest them.
Both tendencies hamper development. The compatibilityargument claims
democracies are as capable as authoritarian regimes of combining growth
with redistribution, leading to expanded markets and economic growth.
Democracy is also a precondition for a functioning market economy which
promotes growth, human development and social equality. The sceptical
view doubts whether there is any systematic relationship between democ-
racy and development. These different perspectives can be attributed to the
different time periods, countries, and political and economic indicators used
by the researchers (Helliwell, 1994; see also Ersson and Lane, 1996).
Helliwell’s comparative analysis of data for 125 countries between 1976
and 1985 found no significant causal influence of variable levels of democ-
racy on economic growth, though there was evidence that democracy stim-
ulates education and investment, both needed for economic development.
Furthermore, democracy does not incur costs in terms of lost economic
growth. Ersson and Lane similarly found that investment in physical capital
and the availability of human capital had more impact on growth than level
of democracy, but that democracy is positively correlated with human
development generally.
Przewroski et al. (2000) also found no evidence that democracy under-
mines investment. Democratic regimes also preside over economies gener-
ally paying higher wages, using labour more effectively, and benefiting
more from technological progress than autocracies. Per capita incomes also
grow faster in democracies. While some authoritarian regimes, notably the
Conclusion: Democracy and Development 277