Are the statistics on Nazarbayev’s side?
Here is a figure from a recent article by Kevin Hassett of the American Enterprise Institute, a conservative DC think tank, that has been circulating through econoblogs:
Hassett argues that democratic countries in the 20th century had the advantage because the Soviet alternative greatly restricted the open market and thus hindered growth. This is no longer true in the 21st century as most autocracies now favor free markets and are unhindered by pesky voter preferences for things like welfare that hamper democratic governments.
These statistics seem especially relevant for Kazakhstan, given it’s status as Central Asia’s economic success story coupled with an autocratic government. (Given that much of Kazakhstan’s growth can be attributed to natural resources rather than shrewd economic policy, however, there is a limit to this data’s applicability in the Central Asian context.) According to Hassett, Nazarbayev’s strategy of economic growth first, and then (maybe) political reform later might not only be spot on, but representative of a global trend.
On the other hand, statistics can be misleading. As a commenter at Free Exchange points out:
Since it’s a GDP-weighted average, China is really the only story here. The next country down is Russia, which probably held things down for the early periods, and after that Saudi Arabia, which is only 1/8 the size of China. Scattered among those 3 unfree countries are (count them) 20 free countries representing the vast majority of the world’s output.
Another obvious criticism of this sort of reasoning is that economic growth for economic growth’s sake misses the point. More important are questions about the nature of the economic growth and whom it benefits. It is hard to see how a single person (or small group of people) can take a society’s preferences into account better than an open government.
Naturally, only time will tell, but it will be interesting to watch the data start trickling in.
on July 23rd, 2007 at 10:39 am
There is another misleading point about these statics, which was noted by Jonathan Chait over at the New Republic: undemocratic societies often post higher growth rates because they are playing catch up. Of course a nation like Kazakhstan is going to have higher growth than France or Italy– there simply aren’t vast, untapped resources in those mature states. The same is true in Russia, where the Soviets lacked the nohow and market incentive to develop much of their mineral and petrochemical wealth. But use something like the Human Development Index and it becomes clear that democratic societies are still way ahead. Or, if you want to take a more limited AEI-esqu view, just measure per capita GDP or output per worker. Finally, I think even the modest claims of Hasstt’s article are hamstrung by the time frame: from 1991 until 2000 or so the second largest democracy in the world, Japan, was in the doldrums. Japan has since recovered, and Europe is also posting higher growth rates today then in decades. Add to that the spectacular growth of China, as noted by Free Exchange, and it’s clear Hassett’s 1991-2005 time frame is custom fitted to his paper. Let’s wait for the 2005-2020 results before we start appointing AEI or Heritage Foundation scholars as Developing World dictators.
on July 23rd, 2007 at 10:41 am
Sorry, a point of clarification: Japan is not the second largest democracy in the world, it is the second largest democratic ECONOMY in the world.