Democracy and prosperity (part 3)
leaders are more likely to promote faster liberal economic reforms. As a result, it could be clearly stated that there is an autocratic growth penalty that is concentrated in personalist regimes and that when measuring economic growth, it is important to distinguish between the two types of autocracies.
In conclusion, the question as to whether democracy is the best form of government for economic prosperity has no simple answer. During the 20 th century, democracies were associated with high levels of economic growth through the promotion of inclusive institutions, security of property rights and the expansion of healthcare and education. At the same time, that growth was highly dependent on the conditions of the time. The 21 st century was able to expose the structural weaknesses of democracy, specifically early-stage democracies, which undermined their economic performance, while institutionalized autocracies were able to demonstrate their ability to deliver rapid ‘catch-up’ growth through their insulation from interest groups and electoral pressures. While there is an autocratic ‘growth-penalty’, this penalty is highly concentrated in personalist autocracies which is associated with low levels of growth. However, it is important to note there is an autocratic gamble for both institutionalized and personalist autocracies, as both display much higher levels of variance in terms of growth. Overall, the key driver of growth is the institutions that govern the country and that inclusive institutions are not peculiar to democratic governments. However, if a new country were to emerge in the 21 st century, that country should adopt an institutionalized form of autocracy to achieve economic prosperity. Reference list Acemoglu, D., Naidu, S., Restrepo, P. and Robinson, J.A. (2019) ‘Democracy Does Cause Growth’, SSRN Electronic Journal , [online] 127(1). doi:https://doi.org/10.2139/ssrn.2411791 Acemoglu, D. and Robinson, J.A. (2012). Why Nations Fail: the Origins of Power, Prosperity and Poverty . London Barro, R.J. (1996) ‘Democracy and Growth’, Journal of Economic Growth , [online] 1(1), pp.1–27. Available at: https://www.jstor.org/stable/40215879 Bass, J. (2005) ‘Democracy, Measures of’, Encyclopedia of Social Measurement , pp.637–643. doi:https://doi.org/10.1016/b0-12-369398-5/00567-3 Besley, T., Montalvo, J.G. and Reynal-Querol, M. (2011) ‘Do educated leaders matter?’ The Economic Journal , [online] 121(554), pp. F205–F227. Available at: https://www.jstor.org/stable/41237013 Besley, T. And Reynalquerol, M. (2011) ‘Do Democracies Select More Educated Leaders?’ The American Political Science Review , [online] 105(3), pp.552–566. doi:https://doi.org/10.2307/41480857 Blattman, C., Gehlbach, S. and Yu, Z. (2025) ‘The personalist penalty: varieties of autocracy and economic growth’, National Bureau of Economic Research , Working Paper 34093. doi:https://doi.org/10.3386/w34093 Bollen, K. (1993) ‘Liberal democracy: validity and method factors in cross-national measures’, American Journal of Political Science , [online] 37(4), pp.1207–1230. doi:https://doi.org/10.2307/2111550 Burnell, P. (2006) ‘Autocratic opening to democracy: why legitimacy matters’, Third World Quarterly , [online] 27(4), pp.545–562. Available at: https://www.jstor.org/stable/4017723 Clague, C. et al. (1996) ‘Property and contract rights in autocracies and democracies’, Journal of Economic Growth , [online] 1(2), pp.243– 276. Available at: https://www.jstor.org/stable/40215917 Millemaci, E. et al. (2024) ‘Have autocrats governed for the long term?’ Kyklos . doi:https://doi.org/10.1111/kykl.12425 Heo, U. and Tan, A. (2001) ‘Democracy and Economic Growth: a Causal Analysis’, Comparative Politics , [online] 33(4), pp.463–473. doi:https://doi.org/10.2307/422444
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