business economic policy international global house believes dictatorship best

In addition to the moral concerns, it is not proven that dictatorships are sustainable in the long term. There will always be groups seeking a democratic government, which could lead to revolution.  There is a particular issue with handovers of power in dictatorships, especially those with personality cults – for example the transition to democracy after the death of Francisco Franco in 1975, or the collapse and disintegration of Yugoslavia in to ethnic conflict following the death of Tito. Many authoritarian regimes require a lot of upkeep in terms of propaganda which counterbalances the cost of elections [1] .  An election may be costly but it is also a good indicator of the performance of a government, providing a mechanism of monitoring the performance of the “social contract”. Democratic governments are accountable to their people at the ballot box, which gives those in power an incentive to perform well. If the government is not performing well they will be thrown out. In an authoritarian country if the government performs badly the people have no way to remove them and so change policies to ones that work.  Dictatorships have a different problem with political stability and that is on a smaller scale; it is difficult to know if an investment is safe because the government is arbitrary not bound by the rule of law. The results of this may not be the sweeping changes in economic policy found in democracies but can be more significant locally such as demands for high payments to operate, confiscation, or preferential treatment for competitors.  [1] Marquand, Robert, ‘N. Korea escalates ‘cult of Kim’ to counter West’s influence’, The Christian Science Monitor, 3 January 2007

Dictatorships assure low cost political stability  Due to the lack of rotation in office, a dictatorship allows for a more stable government with more ability to plan for the long term, which is crucial for attracting foreign investment.  Given that a democracy requires regular elections, each election can change the economic environment of a country. A change in government may lead to a switch in policies, partisan appointments to government bodies, and a medium term focus always set on the next election.  Close elections can lead to disorder as votes are recounted and appeals lodged in the courts. After the 2006 Mexican presidential election, tight results lead to popular unrest and mass protests calling for a recount. The president elect had to deal with a large legislative faction that did not recognise him, and his opponent refused to concede defeat. [1] Without a stable framework, the lack of foreign confidence may impede development. The countries that have developed rapidly have tended to be those that have managed to attract this foreign direct investment thus in 2012 China managed to get $243 billion of FDI (18% of the total) against only $175 billion for the United States which is still a much bigger economy. [2]  Additionally the resources needed to operate a democratic society and run elections are a large expense for the state and society as a whole; the US presidential election costs $6bn, [3] money which would be much better spent investing in building infrastructure or businesses.  [1] See for example the case of Mexico’s 2006 elections. ‘Mass protest over Mexico election’, BBC News, 9 July 2006,  ‘Fracas mars Mexico inauguration’, BBC News, 2 December 2006,   [2] OECD, ‘FDI in Figures’, April 2013,   [3] Hebblethwaite, Cordelia, ‘US election: How can it cost $6bn?’, BBC News, 2 August 2012,

Dictatorships generally focus only on supporting one element of society, which means that there are often opposition groups from other demographics ready to oppose them. When the repression fails, the state will no longer be stable. Even if a dictatorship can create economic growth, it will not necessarily permeate through all elements of society, making them more likely to object to the government.  If a dictatorship manages to create an inclusive economy, demands for an inclusive political system will follow. While a dictatorship may work in the short term, political change will then result from this very success as shown by the countries like South Korea and Taiwan that grew rapidly as autocracies before having democratic revolutions.  According to Adam Smith, ““[c]ommerce and manufactures can seldom ﬂourish long in any state which does not enjoy a regular administration of justice, in which the people do not feel themselves secure in the possession of their property, in which the faith of contracts is not supported by law, and in which the authority of the state is not supposed to be regularly employed in enforcing the payment of debts from all those who are able to pay. Commerce and manufactures, in short, can seldom ﬂourish in any state in which there is not a certain degree of conﬁdence in the justice of government” [1] .  [1] Smith, A. (2009). An inquiry into the nature and causes of the wealth of nations. Digireads.com. [1776]. p. 546

Dictatorships are more effective than democracies at mobilizing resources for investment.  Dictatorships are superior to democracies in that they can make decisions and implement policies quicker. They can easily modify institutional and legal frameworks towards development goals, as there is no need for a political consensus behind their actions. This also insulates government from special interests that must be reconciled with in democracies. This allows dictatorships to create a pro-investment legal, economic and institutional framework such as low taxes, exchange rate manipulations and import tariffs, without facing political opposition.  For example, fracking, a technique used to extract hard to obtain gas, has generated widespread opposition in the West, leading to it being banned in France [1] . An autocratic government would find it easier to allow cheap access to this energy, boosting industry, as it could disregard this opposition.  Dictatorships can also control resources to allow for better health and education services, by determining curricula, salaries and supplies. Cuba has one of the best healthcare systems in the world, with more doctors per capita than much of the Western world [2] , and in 2009 Shanghai came first in the PISA test [3] .  [1] Castelvecchi, Davide, ‘France becomes first country to ban extraction of natural gas by fracking’, Scientific American, 30 June 2011,   [2] The Economist, ‘Reshoring manufacturing: Coming Home’, 19 January 2013,   [3] Brouwer, Steve, ‘The Cuban Revolutionary Doctor: The Ultimate Weapon of Solidarity’, Monthly Review, Vol.60 No.8, January 2009,

This makes the assumption that dictators are rational, wise and seek to encourage development, rather than operate as kleptocrats. This is why dictatorship usually does not benefit development; the very concentration of power means when they make poor decisions the effect on the country is much greater. There is a similar result with corruption, a lack of checks and balances mean that decisions can be taken and implemented quickly but this same lack also means there is little to prevent corruption.  Corruption is often rife in non-democratic societies. For example, in Cuba the healthcare system is largely reliant on bribery and is often under-resourced. One US diplomatic cable points out “[i]n one Cuban hospital, patients had to bring their own light bulbs. In another, the staff used "a primitive manual vacuum" on a woman who had miscarried. In others, Cuban patients pay bribes to obtain better treatment.” [1]  [1] ‘Wikileaks cables highlight Cuba’s health care issues’, McClatchyDC, 29 December 2010,

Dictatorships can prevent social unrest  Dictatorships are better at controlling discipline and order within society. They generally promote a state based on hierarchical values, through strict policies based on security. This allows them to prevent financial losses due to strikes and riots, and reduce crime rates, making the country more stable.  Singapore is a de-facto one party state, in which the ruling People’s Action Party, is accused of stopping the operation of opposition parties. A former Foreign Minister of Singapore has asked “How many Singaporeans really want free speech anyway? They want orderliness, a decent living” [1] . This both makes the country more competitive because there are more productive days and more attractive to invest in as expats will want to live in countries with little crime. Moreover when it comes to attracting immigration for sectors of the economy there is none of the opposition that would occur in democracies.  Autocracy may be the only way to stabilize some countries that have never had a democratic government. It has been suggested by Mancur Olson, a leading economist, that “anarchy not only involves loss of life but also increases the incentives to steal and to defend against theft, and thereby reduces the incentive to produce [2] ”. A dictatorship may be the only way to restore order and create a political framework stable enough for trade and investment.  [1] Huff, W.G. (1994). The economic growth of Singapore: trade and development in twentieth century”. Cambridge; New York; Melbourne: Cambridge University Press. p. 358  [2] Olson, M. (2000). Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships. New York: Basic Books. p. 64

Those cases show that the dictatorship helped the economy. Even if it did not trigger the growth, it laid the ground work for it. In Spain’s case it was a dictator who was able to change to the necessary free market policies while in South Korea it was the previous autocrats that launched the country’s miracle. While economic policy is more important than political freedoms, dictatorships are better at implementing such a framework of policies.

Those cases show that the dictatorship helped the economy. Even if it did not trigger the growth, it laid the ground work for it. In Spain’s case it was a dictator who was able to change to the necessary free market policies while in South Korea it was the previous autocrats that launched the country’s miracle. While economic policy is more important than political freedoms, dictatorships are better at implementing such a framework of policies.

Development is about more than economic growth  Amartya Sen has argued that “the removal of substantial unfreedoms […] is constitutive of development [in so far as give people] the opportunity of exercising their reasoned agency [1] ”. In a broader sense, democracy is necessary for a developed society because a precondition of a developed society is for that society to be able to decide for itself what its objectives are. It is society as a whole that needs to define what it considers to be development. The Myanmar under the junta may have considered its goals to be a strong military showing that Burma was developed. But without the citizenry agreeing this would not make Burma a strong state. Quite the opposite the lack of freedoms would show the country is not actually developed. Development means more than economic growth, it has to include other indicators as in the Human Development Index, but also things that are not even captured by that measurement such as freedom of speech.  Economic growth and GDP are even worse at demonstrating which countries are developed. Development only occurs when the wealth, and the choices it brings, reaches the people which is why Equatorial Guinea is not a developed nation despite its high income. Even in the economic realm therefore it is not just the absolute growth that matters but how it is distributed. Przeworski and Limongi show that from 1951-1990 dictatorships had higher growth rates than democracies (4.42% against 3.95%) yet the growth rate in GDP per capita was higher in democracies (2.46% against 2%). [2]  [1] Sen, A. (1999). Development as Freedom. Oxford: Oxfor University Press. p. xii  [2] Przeworski, Adam and Fernando Limongi, 1997a; in M. ANTIĆ: “Democracy versus Dictatorship: The Influence of Political Regime on GDP Per Capita Growth”. EKONOMSKI PREGLED, 55 (9-10) pp. 773-803 (2004)

Democratic rule of law is the best ground for political stability and growth  In order for a society to develop economically, it needs a stable political framework and dictatorships are often less stable. A dictator will have to prioritize the retention of power. As repression is inevitable, a dictator will not necessarily be entirely popular. There will regularly be a doubt about the future and sustainability of a dictatorship. Bearing in mind the messy collapses of some dictatorships, a democracy may be a more stable form of government over the long term [1] .  Only democracies can create a stable legal framework. The rule of law ensures all of society has access to justice and the government acts within the law. Free and fair elections act as a bulwark against social unrest and violence. Economic freedoms and human rights protection also have positive effects on economies. Private property rights, for example, encourage productivity and innovation so that one has control of the fruits of their labour.  It has been argued by Acemolgu and Robinson in their book Why Nations Fail? The Origins of Power, Prosperity, and Poverty that inclusive political institutions and pluralistic systems that protect individual rights are necessary preconditions for economic development [2] . If these political institutions exist then the economic institutions necessary for growth will be created, as a result economic growth will be more likely.  [1] See for example the work of Huntington, S, P., (1991), The third wave: democratization in the late twentieth century, University of Oklahoma Press,   [2] Acemolgu, D., and Robinson, J. (2012). Why Nations Fail: The Origins of Power, Prosperity, and Poverty. London: Profile Books.

Political regime has a limited impact on development  It can be argued that a good economic policy, such as China’s economic policies, have helped development. But a free market policy can be done with any form of government, and cannot be exclusively attached to a dictatorship or a democracy. Any political system can use it. Although it has been noted that South Korea was an autocracy during economic ‘takeoff’ its economy has also grown significantly since democratization with GNI per capita growing from $3,320 in 1987 to $22,670 in 2012. [1]  Another example is that Spanish economic growth in the 1950-2000 period. The 1960s economic miracle in Spain was not necessarily caused by Franco’s regime – he controlled the country in the 1950s, when the country did not have such economic success. In 1959, Franco opened up the Spanish economy internationally, ending the isolationist economic policies established following the Civil War so making the country free market bringing dividends. As a result Spain also grew economically after the collapse of the Franco government, continuing on following on from EU membership.  [1] The World Bank, ‘GNI per capita, Atlas method (current US$)’, data.worldbank.org,

Democracy acts in the interest of the general population, which is good for development  It can be argued that a good economic policy, such as China’s economic policies, have helped development. But a free market policy can be done with any form of government, and cannot be exclusively attached to a dictatorship or a democracy. Any political system can use it. Although it has been noted that South Korea was an autocracy during economic ‘takeoff’ its economy has also grown significantly since democratization with GNI per capita growing from $3,320 in 1987 to $22,670 in 2012. [1]  Another example is that Spanish economic growth in the 1950-2000 period. The 1960s economic miracle in Spain was not necessarily caused by Franco’s regime – he controlled the country in the 1950s, when the country did not have such economic success. In 1959, Franco opened up the Spanish economy internationally, ending the isolationist economic policies established following the Civil War so making the country free market bringing dividends. As a result Spain also grew economically after the collapse of the Franco government, continuing on following on from EU membership.  [1] The World Bank, ‘GNI per capita, Atlas method (current US$)’, data.worldbank.org,

Economic development is not exclusively bound up with regimes or institutions. Natural factors such as rivers for transport, potential land use and natural resources are key to explaining why some countries are more prosperous than others. Many countries with higher economic growth are authoritarian or unstable democracies [1] . These may have the necessary economic conditions for growth even without these inclusive political institutions.  [1] GDP growth on an annual basis adjusted for inflation and expressed as a percent, CIA World Facbook, 2013.

Certain economic standards have to be met to genuinely satisfy individual autonomy and freedom. If economic growth is a necessity for democracy, dictatorships are better at gaining the required growth. If dictatorships grow faster while not redistributing wealth then at least there will be more wealth to redistribute when the state does eventually start to do so. It might therefore be considered once again that it is the autocratic state that sets the conditions for democracies to take over and increase development in the non-economic areas.