Is Dictatorship Economically Excusable?

Filed under: Economics

Tyler Cowen at Marginal Revolution answers an email from one of his readers, which asks: "Is authoritarianism excusable or permissible - for any length of time - if it is justified by a need for economic growth/reform?" Here's the meat of his response: (followed by my own, of course)

More democratic versions of those regimes would have been better. That said, I don't think absolute majoritarian democracy in Singapore, from day one, would have been better than the reign of Lee. It would have led to ethnic voting and the quick end of democracy, in destabilizing fashion. Yet now Singapore, a successful and well-established country, can and should become more democratic. When it comes to Pinochet, we should condemn part of the regime and praise some of the parts concerning economic policy. Viewing Pinochet purely as an individual moral agent, he was quite wrong to act the way he did. If you ask "would I be willing to endanger the good economic reforms by eschewing torture to enforce the rule of the regime," the answer is yes I would want to immediately end the torture and take that risk.

To start, democratization research fully shows that dictatorships are no better at creating economic growth than democracies with even the most highly bickering political classes. In fact, the latter have shown to do just a tad better. There is absolutely not reason to believe, in general, that a dictatorship can allocate resources in the most efficient way to grow the economy.

There are exceptions, though, and that's undeniable. Chile, South Korea, Japan, and other one party states or outright dictatorships experienced great economic growth because they were being led by a political elite with the desire to boom the economy. Within these supposedly one-party states are many different groups, mostly elites, who agree about the economic future of the country. Human rights issues aside, the macro view is that this kind of dictatorship will do very well.

The military regime can go either way. It can be like Pinochet's, where economic growth occurred and people got thrown out of planes, or they can just totally screw things up all around. In fact, there is also the honorable military regime, such as in Mauritania, that truly commits itself to a short timetable of existence and uses that time to build the political civil society necessary for a functioning democracy.

Looking away from just economic reasons alone, dictatorships can have attributes that are desirable in the short-term. Absolute control can suppress ethnic bloodletting or socialist revolution as reforms go into effect. And while economic growth itself has been shown not to lead to democracy, a mid-range GDP per capita somewhere above $6000 is the point at which no democracy has ever collapsed. So if one of these particular dictatorships can be benevolent enough while preventing terrible atrocities, people will eventually be economically well off enough that they won't try to kill each other anymore.

The very definition of dictatorships, in its absoluteness, makes it very hard to trust that the regimes will act in this benevolent manner. So democracy in the general sense is almost always preferred to dictatorship. If there is a very special reason why a transitional dictatorship is necessary, however, there better be some very good way to know that it won't be just as bad.

What one has to keep in mind is that everyday people of most traditional societies are not so concerned with vast economic development and so would not be particularly concerned with it, especially if it means so much torture and death. They have tended to retain more of their humanity in this cultural sense. And if we look at a place like Rwanda, where an entire ethnic group was nearly wiped out, it is mostly at the behest of the elites who command the campaign of violence and propaganda. In some cases, there is a huge economic benefit to these elites if instability and even genocide occurs. This is why, in the end, I'm going to agree with Cowen that in general dictatorship cannot be economically excused. In fact, it should be generally distrusted.