An open economy, a closed society

Bruce Bueno de Mesquita and George W. Downs IHT/ Foreign Affairs

WEDNESDAY, AUGUST 17, 2005
Copyright The International Herald Tribune
NEW YORK When Deng Xiaoping opened up China’s economy more than 25 years ago, the prevailing view in much of the West was that his reforms signaled the beginning of the end for the country’s authoritarian regime.
This prediction was not specific to China. Conventional wisdom at the time held – and to some extent still holds – that market liberalization is the most reliable path to democracy. Economic openness, it was reasoned, leads to the emergence of an educated and entrepreneurial middle class that over time, will start to demand more and more control over its own fate.
But something went wrong in China, Russia and other states where authoritarian regimes loosened the economic reins. Economic growth arrived but liberal democracy is still nowhere is sight. The reason is simple but disturbing: A new and more sophisticated breed of autocrat has discovered a strategy that permits them to enjoy the benefits of economic growth while postponing – often for decades – the emergence of authentic competitive democracy.
To understand how this strategy works, it helps first to understand how political competition emerges in the first place. To effectively pursue political power, citizens have to engage in “strategic coordination”: activities such as disseminating information, recruiting and organizing party members, selecting leaders, raising funds and holding meetings and demonstrations.
Economic growth has traditionally been thought to promote democratization by making strategic coordination easier, as communications technology improves, news media become more diverse and the citizenry more educated. But in recent years some savvy regimes have learned how to cut the cord between growth and strategic coordination, allowing the former without having to worry about the latter.
Their trick is to ration carefully the subset of public goods that facilitate political coordination, while investing in others that are essential to economic growth. The “coordination goods” that they need to worry about consist of things such as political and civil rights, press freedom and access to higher education. “Standard public goods” include public transportation, primary and secondary education, and public health; all of which contribute to economic growth and pose relatively little threat to the regime.
Examples abound of how autocrats limit coordination goods. Consider China’s long history of restricting access to the Internet and other media. Or Russia, where President Vladimir Putin has placed all national television networks under strict state control and eliminated elections for regional leaders. Or Venezuela, where last year President Hugo Ch├ívez pushed through a law allowing him to ban news reports of violent protests and to suspend the broadcasting licenses of media outlets that violate any of a long list of broadly phrased regulations.
How well does this coordination suppression strategy work? We recently examined the provision of both coordination goods and standard public goods in about 150 countries from 1970 to 1999. Several findings are particularly noteworthy.
First, the suppression of coordination goods keeps autocrats in power. An autocrat who both permits freedom of the press and civil liberties reduces the chances that he will survive for another year by about 15 to 20 percent.
Second, today’s autocrats tend to suppress coordination goods much more consistently than they do other public goods. Some old-fashioned tyrants, especially in Africa, still suppress all public goods. But a growing proportion of the world’s authoritarian regimes have adopted a more sophisticated brand of oppression.
Third, the greater the suppression of coordination goods in a given country, the greater the lag between the onset of economic growth and the emergence of liberal democracy.
What should Western governments make of these findings? First, they should recognize that promoting economic growth is not nearly as effective a way to promote democracy as was once believed. By limiting coordination goods, oppressive incumbents can have it all: a contented constituency of rich elites who benefit from economic growth; plenty of resources to cope with economic and political shocks; and a weak, dispirited political opposition.
Second, the World Bank and other donor organizations should broaden the set of conditions that they attach to loans to developing states, and start requiring that recipients increase basic civil liberties, political rights and other coordination goods. This does not mean placing less emphasis on economic growth or the provision of standard public goods. Both kinds of goods are necessary conditions for the realization of real democracy.
The third lesson concerns the Middle East. It is tempting to view the elections in Iraq, Syria’s withdrawal from Lebanon and the subsequent elections, the announcement that local elections will be held in Saudi Arabia, and the promise of more competitive elections in Egypt as signaling a new democratic dawn in the region. But this is unrealistic.
Such structural reforms by themselves tend to be more symbolic than real in autocratic states. Policy makers seriously interested in measuring democratic progress in the region should focus on the availability of coordination goods: on the number and variety of truly independent media outlets, for example, or on how easy (and safe) it is to hold a large antigovernment demonstration.
These are the kind of freedoms that make real democracy possible. Until they appear, the United States, the European Union, aid agencies and other donors and must keep exerting pressure for change.
(Bruce Bueno de Mesquita is the chair of the Department of Politics at New York University and a senior fellow at the Hoover Institution. George W. Downs is a professor of politics and dean of social sciences at New York University. This article is based on an upcoming essay in the September/October issue of Foreign Affairs magazine.)


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