There are numerous relationships that exist between economic development and democracy in a country. Amongst these outcomes that have been established is a beneficial relationship between democracy and per capita income. Basing on this argument, it is believed that there exist high levels of democracy in a country with high per capita income. On the contrary, a country that has lower levels of per capita income is likely to be characterized with dictatorship (Axtmann, Roland, 2007).
Although to date little has been found on this relationship. Some scientists have argued through their thorough analysis that high level of income has no discernable causal impact on transitions that leads to democracy from dictatorship. They continued to add that their relationship also has to do with the type of regime in relation to income; that is, high income will obviously lead to a more stable and democratic country. After a country has attained democracy and also hit a given level of per capita income, there are limited chances that the country will move back to dictatorship. It is, therefore, clear that the more the income increases the more a country sinks deeper into democracy and thus attaining a highly stable equilibrium (Kivisto, 2010).
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The above results were heavily based on data analysis on how regimes evolved from one level to another. Alternatively, other scholars have also given their argument which is based on several studies that were conducted to the transitional democracy of Latin America and Europe. In their argument, the correlation of democracy and income were realized to hold on a number of cases at all time and points of their study. Conditions are not necessarily held in other countries at some period of time. Focusing on Latin America between 1960 and 1970 during the military dictatorship, income seemed to grow claims which were made that there were social characteristics that were not compared with the high income which at some point begets democracy. In real essence, democracy is best attained in a situation where organized working groups fight for it. In a case of high income, workforce is usually associated with the level of the industrial taskforce. Mobilization of the mass is not necessary is this case. It can also be possible that a coalition should be formed between military and corporatists, agricultural interests, socialist regime and preventing the mass from engaging them in mobilization for democracy and yet they continue to increasingly produce economic output and high levels of per capita income. It is suggested that in order to attain democracy, it is equally important to consider development of a dynamic class which is far away from economic development (Lane & Ersson, 2003).
Apart of causal analysis normative ideas that concern development of political and economical foundations, have yet been opposed by other scholars. This was argued basing on the countries such as Korea and Chile who first ensured that they attained economic growth despite their authoritarian regimes before shifting to transitional democracy. This mode was later named Asian way. Through this way, it was argued that the Asian values are quite compatible with economic development so long as democracy is limited. On the other hand, Latin Americans defended it by saying that such a move is crucial when quelling ruinous populism and when the labor discipline is intended to be created that is important to the development of economic growth before democracy is ushered in.
Other scholars have yet suggested that a democratic route that leads to political development is better, since economic growth is easily achieved as compared to a corrupt authoritarian country. From this argument, it is, therefore, preferred that democracy should be attained first before analyzing the growth of incomes.
From the graph above, the horizontal axis represents the real GDP per capita. The GDP per capita is measured using Laspeyres Purchasing power parity. Analyzing the graph, we will be able to come with comparative measures of real incomes.
The vertical axis, on the other hand, represents the level of democracy or dictatorship which is measured as per the ordinal scale. The dotted horizontal line which acts as a mid-point illustrates the midway point; that is, those below are authoritarian regimes while those above are democratic regimes.
The line labeled ‘Lipset line’ has been used so as to indicate the correlation that exists between economic development and democracy. It is expected that, if all countries are graphed in there, then all results will be expected to spread within that line. Przeworski is the founder of the graph and, therefore, the Przeworski’s findings have been represented on the upper-right side corner of the graph. This zone indicates stability. After a country has attained this level, it will be considered to have achieved it in terms of stability and wealth democracy, at this level such countries will no longer exit.
Most democrats tend to believe that democracy is less important, but the real truth is that it enhances the development of economic growth. In considering a population to be corporately well behaved, basing on political freedom, democracy is actually considered to provide a favorable environment for this development as compared to a non –democratic environment.
The law of economics supports that, in order for developments to be made, there has to be favorable environment and for this reason democracy is actually preferred. A good contractual structure of property rights that are well defined is what is witnessed in this kind of environment. Scholars argued that the rights of property are well protected in a democratic regime other than an authoritarian one. The main point in this argument is that, if the rich are few, their property rights would be threatened, since majority of the population are fighting with poverty. Democracy, therefore, is regarded to be hospitable in a rule of law.
As per other scholars, they have suggested that the relationship that exists between economic development and democracy is a reciprocal to one another. According to them, economic development is achieved only when democracy is granted in politics so as to allow economic rights to take its course. The economic freedom of an individual, on the other hand, is also assured. Through a democratic environment, economic development can be easily predicted so long as a free enterprise is well maintained, thus, a free society will arise that leads to an idea of economic arrangement. The same scholars illustrated negative sides that are relationships between the two phenomena. Activities such as income redistribution experienced in a democratic government are known to retard economic development. Though at some point is not regarded as democracy but considered as government interference.
There is also another group of people who argue that the relationship between the two is viewed to be on a single-direction. In other words, it is through economic development that democracy is achieved. On the other hand, democracy retards economic development. In this case, therefore, democracy and economic are directly related, but inversely proportional to economic growth because rich nations may have attained high economic level for other reasons though reduce gradually as soon as democracy is established. On the contrary, poor countries` democracy has not yet been ushered, because economic development is still underway but will continue to enjoy the growth of economy that is not retarded by democracy.
Another argument though closely related to the previous one is the fact that the two are non-linear also termed curvilinear. In the real sense, there is a control of economic level. This point suggests that economic development is not favored by democracy when the economic level is still at the infancy stage. At a later stage of economic level, a better job will be witnessed through democracy than when dictatorship was in place that encourages economic development. This point can also be explained in a different perspective that democracy can be controlled in order to realize a better economic development. A good contractual structure of property rights that are well defined is what is witnessed in this kind of environment. Scholars argued that, the rights of property are well protected in a democratic regime other than an authoritarian one. The main point in this argument is that, if the rich are few, their property rights would be threatened, since majority of the population are fighting with poverty (Guilhot, 2005).
The conclusions that emanates from the examination in regards to dynagraphs in relation to democracy and development for a number of years appears to be in support of the findings, whereby transitions regarding democracy are not followed by the growth of the economy, neither such transitions nor economic growth .
On the other hand, the outcomes give little support on the fact that there are still little efforts provided by the authoritarian model that may lead to democracy. There is neither democracy nor economic development in an authoritarian government despite reaching high economic growth being a transition. Furthermore, there emerged three distinctive patterns that can be associated with those countries that have achieved their democratic wealth due to the poor dictatorship mode of the government, and this includes gradual multi-step improvement that affects both democracy and income level. Secondly, sudden transition emanating from dictatorship economic growth and finally is authoritarian stagnation caused sudden transition (Kivisto, 2010).
Therefore, it is evident in this case that there are only two variables that have been considered: economic development and democracy, though there are other factors that may either lead to democracy or economic growth. As it can be noted, it is clear that democracy and governance are never used interchangeably. This, therefore, means that good governance respect both property and individual rights sticking to the rule of law through security provision and practice of justice and equity to its citizens, thus leading to economic growth and democracy in society. On the other hand, income may be limited as a result of poor governance leading to political instability and reduction in economic performance.
Stable governance, on the other hand, leads to stable democracy which will never be afforded by democracy alone. It is notable from the arguments that there is ambiguity between growth and democracy on how they affect governance both directly and indirectly. Political instability has negative effects on economic growth as seen in the previous arguments. We can, therefore, conclude that poor countries with strong democratic background tend to experience strong economic growth. As it can be noted, it is clear that democracy and governance are never used interchangeably. This, therefore, means that good governance respects both property and individual rights sticking to the rule of law through security provision and practice of justice and equity to its citizens, thus leading to economic growth and democracy in society (Lipset,2003).
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