Is linking democracy and economic growth telling a bedtime story?

At the world Economic Forum, conference
held in Addis Ababa, in May, 2012
that some in the media dubbed the Meles Zenawi Show
^[1], Meles Zenawi said: “

There is no direct relationship between economic growth and democracy, historically
or theoretically…..I don’t believe in bedtime stories, contrived
arguments linking economic growth with democracy”, He was even more unequivocal and emphatic when he added that “We
need to democratize but not in order to grow”.  According to him the only reason we need to democratize
for is “in order to survive as united sane nation”.   He didn’t
care to elaborate on what he meant by surviving as united sane nation. Only God
knows how he compartmentalized the usefulness of democracy for the sanity of a
nation and how any such sanity doesn’t directly relate to economic
growth.  There is every reason to
suspect that this was a strong attempt on the part of the Prime Minister to
fend off the barrage of criticism coming at him these days about the closure of
democratic space in the country, the abuse of human rights, the repression of
civil society and free expression from his irate donors in the west.  He was in effect saying judge me by the
economic growth statistics I give you, not by my credentials on democracy and
human rights.  I suspect his
experience of attempted opening of the country for democracy in 2005 has
fatally blinded him.

If Ato Meles was opining as an
academic and not as a head of a government, we could have taken his statement lightly
and perhaps as something which is only academic, i.e., something that has value
only in the exercise of thought with benign relevance to real world situations.
 But when such declarative statements
as the Prime Minister’s, which are at best based on half truths, come
from people in positions of power, it gets troubling and scary.   It is even more troubling when the
individuals are the kinds that pursue their beliefs with zeal and propensity to
use the machinery of state force at their disposal in pursuit of their ideas.  Anybody who lives the military
dictatorship in Ethiopia remembers the deafening declaratory statements of
Mengistu and his officials such as the “not only do we control the
reactionaries – we will control nature too” slogan.   A regime official who I once politely
told that the Gambella plains were unfit to resettle peasants moved from
highland Ethiopia, accused me of preaching cowardice and told me that I am
confused by pseudo education.   He said what is important is the
belief and conviction, the rest is easy.  I only told him that unlike the highlands,
the flat plain in Gambella has drainage problems, and that the soil gets waterlogged
and leached and not reach in soluble minerals that many crops need adding that
the green forest should not fool us.  I had to shut up my coward mouth and regretted
for venturing into dangerous territory.   The disingenuous project ended up in
shambles even before it started.

Meles’s declaratory
statement is also in the same tradition.   It is an indication of a decision
by him that the prevailing intolerance of dissent and civil discourse is going
to be kept in place.  I fear that
this may lead to the intensification of existing conflicts and widespread discontent
in the country.  As someone who
doesn’t prefer a violent or revolutionary approach to the solution of Ethiopia’s
problems, I sincerely do fear.  

The fact of the matter is that
Mr. Prime Minister is half right.  But
his assertion seems to be based on linear thinking and selective reading of the
literature on the relationship between democracy and economic growth.  I am sure he has read the works of some
in academia that do make similar generalizations about the relationship between
democracy and economic growth. He has disregarded that in many cases even these
conclusions depend on the measures they use and the context of their studies.  Unlike the Prime Minister, many of these
academics and researchers who do come to these conclusions are careful to add
that the relationship between democracy and economic growth is more complex
than meets the eye and encourage us to do more innovative examination and
develop methodologies and do a more careful use of data.  In fact, the literature of political
economic thoughts regarding the relationship between democracy and economic
growth is in many cases contentious and inconclusive and varies with the
country or region considered and the kind of data used. 

Yes, economic growth can occur
even under tyrannical dictatorships.  The world has many examples of places
where economic growth and democracy even seem to relate inversely, so much that
the linear thinker can conclude democracy affects economic growth negatively.   Kaddafi’s Libya and many of
the rich countries in the Gulf and Asia provide ample example of this.  Russia’s transformative achievement
in infrastructure such as the building of the world famous Moscow subway and
other industries occurred under iron feasted Joseph Stalin.   China’s one party rule hasn’t
slowed its growth although many attribute the speed of its growth to
liberalization within the party and managing conflicts including the country’s
cultural context.   That you do
and don’t fit the variables in a linear regression model and predict an
outcome may not necessarily mean a universal relationship does or doesn’t
exist.  Professional observers
suggest the need for a closer examination of each country’s economic
realities, resource bases, level of development and their socio-cultural
environments more than accepting these observations as universal truth as our
Prime Minister does.  But none on
all sides in the debate on the subject come to saying anything approaching what
our Prime Minister said – that it is a bedtime story.  Like all knowledge the enquiry goes on
and on.  Our Prime Minister seems to
want to stop it. 

If I am as selective as Meles, I
can bring testimonies of non-armchair researchers who made many empirical
studies that show the direct effects of democracy on economic growth and
development using various components of democracy as measures.  Scholars like Cooper Drury et al., who
actually made hands in the mud kind of research as opposed to armchair
contemplation, for example, argue:

…one
of democracy’s indirect benefits is its ability to mitigate the detrimental
effect of corruption on economic growth. Although corruption certainly occurs
in democracies, the electoral mechanism inhibits politicians from engaging in
corrupt acts that damage overall economic performance and thereby jeopardize
their political survival. Using time-series cross-section data for more than
100 countries from 1982-97, we show that corruption has no significant effect
on economic growth in democracies, while non-democracies suffer significant
economic harm from corruption. ^[2]

These individuals have crunched
massive data across time to be dismissed as tellers of bedtime stories.  Bringing Nobel Prize winner political
economist, Amartya Sen, who famously said democracies don’t starve, in
this argument with our Prime Minister, may be like taking a gun to a knife
fight.  Instead, let me bring two
other Indian professors, Sarbapriya Ray and Ishita Aditya Ray, who used a fairly
sophisticated model to understand causality between democracy and economic
growth. Here is what they say:

Using co-integration analysis for the
period 1980-81 to 2009-10, we seek to identify the relationship between
economic growth and democracy. Our empirical results suggest that there is a
long run bi-directional causality between economic growth and democracy in
India. Moreover, our statistical investigation confirms that democracy affects
economic growth positively and vice versa both at regional level as well as
aggregate level.
^[3]

There are actually many studies
that show that India’s current leap to a newly developed country relates
to its robust democracy.  I could
have gone on and on citing other studies that challenge the Prime Minister’s
wild assertions that the relationship is a bedtime story.  I believe Ato Meles is savvy enough to
locate the materials if he intends to base his views in knowledge and honesty
and doesn’t have an axe to grind against democracy.   

In my view, there is perhaps no
other country that needs democracy as the primary tool of getting out of its poverty
as Ethiopia does.  In the past we
tried it through governments that tightly control the people and failed
abysmally.   Now we have to try
a government where our people have at least some significant say in it.   It is simple common sense to
understand that economic growth and development in Ethiopia cannot be achieved
and sustained in conditions where simmering political conflicts prevail, where
there is little rule of law, where people have no confidence and control on
what they do, where corruption and favoritism are rampant and government continuously
hovers over the heads of everyone.  The
largely aid funded growth in Ethiopia in infrastructure and social services and
massive Diaspora remittance are no substitute to what we can get out of building
democratic institutions. The PM’s suggestion that Ethiopia doesn’t
need to democratize for economic growth is not different from his now defunct
idea of choosing Albania as our model. There is some weird picture we see in
Ethiopia today when we juxtapose the economic gains over the past several years
and the real life conditions of the Ethiopian people.  How is it that the economic growth that
Ato Meles brags about is related to more and more people becoming unable to
feed themselves and their children? 

The multidimensional conflicts
prevailing in Ethiopia need a resolution through a democratic and transparent
discourse.  Suppressing them is
guaranteeing the destruction of whatever gains we have made.  We are already losing a lot of
opportunity because of the closure of the political space in the country.   Economic growth cannot be
guaranteed under conditions where Ethiopia is losing its human capital at
alarming rates.  I see a massive
wealth and potential of Ethiopians outside and inside Ethiopia not being put to
use because of the democracy deficit. Ato Meles would help Ethiopia more if he
becomes an expert of the art of compromise than a political economist.