[First published August 30, 2005] Sometimes I come across research that is so important, but which is unavailable unless you subscribe to research journals or are near a research library, that I must provide its substance. Such is the article by Adam Przeworski and Fernando Limongi on, “Modernization: Facts and Theories,” (World Politics, vol. 49, no. 2, 1997). It bears directly on the Bush Forward Strategy of Freedom. Published in 1997, it is not written with Iraq and Afghanistan in mind, but we can keep them and China in mind as we read it. (My thanks to Dean Esmay of Dean’s World for bringing to my attention the blog on this by TallDave.
I will include what is most relevant, leaving out the nonessential methodology, and all footnotes: (all bold italics added)
What makes political regimes rise, endure, and fall? Do democracies emerge as a consequence of economic development? Does rapid economic growth destabilize democracies? Is there some level of development beyond which democracies are more likely to fall? Is European history unique or is it repeating itself in contemporary less developed countries?
. . . . We pose the question narrowly, examining exclusively the impact of development, rather than seeking broadly to explain the dynamic of political regimes. Hence, we deliberately ignore factors such as religion, colonial legacy, position in the world system, income distribution, or diffusion, which have been found by others to influence the incidence of democracy. We believe that our question is important in its own right, that it lends itself to divergent answers, and that it raises methodological issues that are not well understood.
I. Economic Development and Democracy
Lipset’s observation that democracy is related to economic development, first advanced in 1959, has generated the largest body of research on any topic in comparative politics. It has been supported and contested, revised and extended, buried and resuscitated.
. . . . Yet there are two distinct reasons this relation may hold: either democracies may be more likely to emerge as countries develop economically, or they may be established independently of economic development, but may be more likely to survive in developed countries. We call the first explanation “endogenous” and the second “exogenous.”
Since we are dealing with only two regimes, democracies emerge whenever dictatorships die. Hence, to assert that democracies emerge as a result of economic development is the same as to say that dictatorships die as countries ruled by them become economically developed. Democracy is then secreted out of dictatorships by economic development. A story told about country after country is that as they develop, social structure becomes complex, labor processes begin to require the active cooperation of employees, and new groups emerge and organize. As a result, the system can no longer be effectively run by command: the society is too complex, technological change endows the direct producers with some autonomy and private information, civil society emerges, and dictatorial forms of control lose their effectiveness. Various groups, whether the bourgeoisie, workers, or just the amorphous “civil society,” rise against the dictatorial regime, and it falls.
The endogenous explanation is a “modernization” theory. The basic assumption of this theory, in any of its versions, is that there is one general process of which democratization is but the final stage. Modernization consists of a gradual differentiation and specialization of social structures that culminates in a separation of political structures from other structures and makes democracy possible. The specific causal chains consist of sequences of industrialization, urbanization, education, communication, mobilization, and political incorporation, among innumerable others: a progressive accumulation of social changes that ready a society to proceed to its culmination, democratization.
Modernization may be one reason the incidence of democracy is related to economic development, and this is the reading most commentators impute to Lipset. His most influential critic, O’Donnell, paraphrases Lipset’s thesis as saying that “if other countries become as rich as the economically advanced nations, it is highly probable that they will become political democracies.” Democracy, then, is endogenous, since it results from development under authoritarianism. According to this theory, the sequence of events one would expect is one of poor authoritarian countries developing and becoming democratic once they reach some level of development, a “threshold.”
Yet suppose that dictatorships are equally likely to die and democracies to emerge at any level of development. They may die for so many different reasons that development, with all its modernizing consequences, plays no privileged role. After all, as Therborn emphasized, many European countries democratized because of wars, not because of “modernization,” a story repeated by the Argentine defeat in the Malvinas and elsewhere. Some dictatorships fell in the aftermath of the death of a founding dictator–a Franco, for instance–who had been uniquely capable of maintaining the dictatorial order. Some collapsed because of economic crises. Some because of foreign pressures.
If dictatorships die and democracies emerge randomly with regard to development, is it still possible that there would be more democracies among wealthy countries than among poor ones? If one is to take Lipset at his own word–“The more well-to-do a nation, the greater the chances it will sustain democracy” –then even if the emergence of democracy is independent of the level of development, the chance that such a regime will survive is greater if it has been established in an affluent country. We would thus expect to observe democracies to appear randomly with regard to levels of development, but to die in the poorer countries and survive in the wealthier ones. Thus, history gradually accumulates wealthy democracies, since every time a dictatorship happens to die in an affluent country, democracy is there to stay. This is therefore no longer a modernization theory, since the emergence of democracy is not brought about by development. Rather, democracy appears exogenously as a deus ex machina. It survives if a country is “modern,” but it is not a product of “modernization.”
Are we splitting hairs?
Examine first some descriptive patterns. The facts we report concern 135 countries between roughly 1950 and 1990. . . . All the regimes that occurred during this period were classified as democracies or dictatorships (we use the latter term interchangeably with “authoritarian regimes”). Altogether, we observed 224 regimes, 101 democratic and 123 authoritarian. . . .
If the theory that democracy emerges as a result of economic development is true, transitions to democracy would be more likely when authoritarian regimes reach higher levels of development. In fact, transitions are increasingly likely as per capita income of dictatorships rises but only until it reaches a level of about $6,000. Above that, dictatorships become more stable as countries become more affluent. Dictatorships survive, or at least succeed one another, almost invariably in the very poor countries, those under $1,000. They are somewhat less stable in countries with incomes between $1,001 and $4,000 and even less so above $4,000. But if they reach the level of $6,000, transitions to democracy become less likely. . . . [T]he probability of any dictatorship dying during any year is 0.0206; for those dictatorships with incomes over $1,000, this probability is 0.0294, over $5,000 it is 0.0641, over $6,000 it is 0.0484, over $7,000 it is 0.0333. Huntington, it seems, was correct with regard to dictatorships: they exhibit a “bell shaped pattern of instability.”
[T]he probabilities of dictatorships falling, . . . predicted by the level of development correspond closely to those observed. They increase until the $5,001-$6,000 range and then decline.
Indeed, dictatorships survived for years in countries that were wealthy. Whatever the threshold at which development is supposed to dig the grave for authoritarian regimes, it is clear that many dictatorships passed it in good health. Even disregarding those countries that derive more than one-half of their revenues from oil, dictatorships flourished in Singapore, East Germany, Taiwan, USSR, Spain, Bulgaria, Argentina, and Mexico for many years after these countries enjoyed incomes above $5,000, which Austria, Belgium, France, Germany, Iceland, Italy, Netherlands, and Norway did not have by 1950. . . .
Yet this may not be a fair test of modernization theory. The hypothesis implied by this theory is that if a country develops over a longer period under dictatorship, so that all the modernizing consequences have time to accumulate, then it will embrace democracy. But for most dictatorships this premise is vacuous: only 19 dictatorships–to remind, out of 123–did develop over longer periods of time and reached “modernity.” Let us thus examine more closely these countries, the ones that developed under authoritarianism and became “modern,” which we will take arbitrarily to mean that at some time they had a per capita income of $4,115.)
Gabon, Syria, and Yugoslavia are the three countries that experienced a sustained increase in income over, respectively, twelve, seventeen, and eighteen years, reached the level at which democracy was the more likely regime, and, having remained under dictatorships, experienced a series of economic crises. Singapore and Malaysia are the two countries that developed over a long period, became wealthy, and remained dictatorships until now. In East Germany, Taiwan, USSR, Spain, Bulgaria, and Hungary dictatorships eventually fell, but only many years after they had reached the critical level of income. Given its 1974 income level, Uruguay should never have been a dictatorship. The economic history of the Chilean dictatorship is convoluted: its income in 1974 was $3,561, it climbed with downs and ups to $4,130 by 1981, collapsed to $3,199 by 1983, recovered to surpass the 1974 level only by 1986, and passed the threshold of $4,155 in 1989, exactly the year of transition. The history of Poland is similar: by our criteria, it reached the threshold of democracy in 1974; it experienced an economic crisis in 1979 and a mass movement for democracy in 1980, passed the threshold again in 1985, and became a democracy in 1989. In turn, Brazil, Czechoslovakia, Portugal, and perhaps even South Korea and Greece are the dream cases of a modernization theorist. These are countries that developed under a dictatorship, became wealthy, and threw dictatorships off more or less at the same income levels. But they are few.
This is not to say that democracies did not sometimes emerge because countries became modern; put otherwise, dictatorships do not necessarily fall for the same reasons in all countries. Thus modernization may “explain” why democracy was established in countries that developed over a long period even it these countries had waited for its advent for periods of time that cannot be predicted. But if modernization theory is to have any predictive power, there must be some level of income at which one can be relatively sure that the country will throw off the dictatorship. One is hard put to find this level, however: among the countries that satisfy the premise of the modernization theory, the range of levels at which dictatorships survived is very wide.
Moreover, even if to predict is not the same as to explain, “explaining” can easily entail an ex post fallacy. Consider Taiwan, which in 1961 had a per capita income of $968, which developed rapidly, passing by 1979 our threshold of $4,115, which on the basis of its income level had a probability of 0.10 of being a dictatorship in 1990, and which in 1995 elected its president in contested elections for the first time. Suppose that every year during all this time, the Taiwanese dictatorship faced a probability of 0.02 of dying for reasons not related to development. It thus had about a 50 percent chance of not being around by 1995 even if it had not developed at all. We may therefore attribute to development what may have been just a culmination of random hazards. [And, indeed, the Taiwanese dictatorship most likely democratized for geopolitical reasons, not for economic ones. Thus, the causal power of economic development in bringing dictatorships down appears paltry. Few authoritarian regimes satisfy the premise of modernization theory; that is, few developed over a long period. And even if most of those that did develop eventually became democracies, no level of income predicts when that would occur.
In turn, per capita income, our measure of the level of development, has a strong impact on the survival of democracies. The simple fact is that during the period under our scrutiny or ever before, no democracy ever fell, regardless of everything else, in a country with a per capita income higher than that of Argentina in 1975: $6,055. Thirty-two democracies spent 736 years with incomes above $6,055 and not one collapsed, while thirty-nine out of sixty-nine democracies did fall in countries that were poorer.
. . . . [T]he probability that democracy survives increases monotonically with per capita income. In countries with per capita income under $1,000, the probability that a democracy would die during a particular year was 0.125, which implies that their expected life was eight years. Between $1,001 and $2,000, this probability was 0.0571, for an expected duration of about eighteen years. Above $6,055, democracies could expect to last forever. Statistical analysis . . . confirms that per capita income is a good predictor of the stability of democracies.
These findings cry out for an explanation. Lipset himself thought that the reason democracies survive in affluent countries is that wealth moderates in various ways the intensity of distributional conflicts. This is a plausible explanation but not easy to prove rigorously. The intuitive story is this: Suppose that the political forces competing over the distribution of income choose between complying with the verdicts of democratic competition, in which case each can expect to get some share of total income, or risking a fight over dictatorship, which is costly but which gives the victor all of the income. Now suppose that the marginal utility of consumption is lower at higher levels of consumption. Thus the gain from winning the struggle for dictatorship is smaller. In turn, if the production function has diminishing marginal returns in capital stock, the “catch-up” from destroying a part of it during the war for dictatorship is faster at lower levels of wealth. Hence, in poor countries the value of becoming a dictator is greater and the accumulated cost of destroying capital stock is lower. In wealthy countries, by contrast, the gain from getting all rather than a part of total income is smaller and the recuperation from destruction is slower. Hence, struggle for dictatorship is more attractive in poorer countries.
Obviously, there are always alternative interpretations. One, for example, is that income is just a proxy for education and more educated people are more likely to embrace democratic values. But while the accumulated years of education of an average member of the labor force–the measure of educational stocks we have–does increase the probability of survival of democracies independently of level, the effect of income survives when education is controlled, and indeed it is much stronger.
These observations strongly confirm the exogenous version of Lipset’s theory. Once democracy is established, the more well-to-do a nation, the more likely that it will survive.
The reason we observe the relation between levels of development and the incidence of democracy is that democracies are almost certain to survive once they are established in rich countries. True, dictatorships are less stable when they reach the per capita income of $4,000. But what generates the pattern we observe . . . is that while democracy is terribly fragile in poor countries, it is impregnable in the rich ones. The probability that a democracy will die during any particular year in a country with an income above $4,000 is practically zero: two in a thousand years. And since at such levels dictatorships die at the rate of 5.7 percent, one would expect that independently of the initial distribution, in the long run democracies would constitute 96.1 percent of regimes in such wealthy countries. Even if wealthy dictatorships died at a double, triple, or whatever times higher rate, that is, even if development made transitions to democracy much more likely, all the difference endogenous theory could make is 3.9 percent.
To conclude, there are no grounds to believe that economic development breeds democracies:. . . . [O]nce established, democracies are likely to die in poor countries and certain to survive in wealthy ones.
II. Ups or Downs?
. . . . Rapid growth is not destabilizing for democracy (and neither is it for dictatorship). When democracies face a decline in incomes, they die at the rate of 0.0523 and can be expected to last nineteen years, but when incomes are growing, they die at the rate of 0.0160, with an expected life of sixty-four years. Moreover, democracies that grow slowly, at the rate of less than 5 percent per annum, die at the rate of 0.0173, while those that grow at a rate faster than 5 percent die at the rate of 0.0132.
What is most striking is how fragile poor democracies are in the face of economic crises. In poor countries, those with per capita income under $2,000, of the 107 years during which a decline of incomes occurred, twelve democracies fell the following year: the expected life of democracy under such conditions is about nine years. Even among countries with incomes between $2,001 and $6,000, a decline of incomes resulted in the fall of six democracies in 120 years during which this happened: these democracies could expect to last 20 years. And then, above $6,055 a miracle occurs: in the 252 years during which wealthy democracies experienced economic crises, none ever fell.
Another striking feature of these patterns is that . . . past growth does not matter: one year of economic crisis is enough to produce the political effects.
Thus the hypothesis that rapid growth destabilizes regimes is simply false. In turn, to cite Diamond and Linz, it is true that “economic crisis represents one of the most common threats to democratic stability.” What destabilizes regimes are economic crises, and democracies, particularly poor democracies, are extremely vulnerable to bad economic performance.
III. Kinks: Modernization Theory Revisited
. . . . Is there some level of development beyond which democracies are more likely to die than before? Note . . . . [that the] proportion of democracies to per capita income has a kink at levels between $3,001 and $4,000: the observed values are 42.4 percent between $2,001 and $3,000, 32.6 percent between $3,001 and $4,000, and 72.0 percent between $4,001 and $5,000. But this kink is due to the fact that dictatorships are exceptionally stable in this range, rather than that democracies are less stable. The probability of a democracy dying declines monotonically with per capita income. . . . Argentina is the only country where a democracy fell at an income above $6,000; Argentina is also the only country where one collapsed at an income between $5,000 and $6,000. Only two democracies fell in countries with incomes between $4,000 and $5,000: again one of them in Argentina, and the other in Uruguay. Five democracies fell between $3,000 and $4,000: one of them in Argentina. Indeed, outside Argentina, only five democracies fell in countries with incomes above $3,000: in Uruguay in 1973 at $4,034, Suriname in 1980 at $3,923, Chile in 1973 at $3,957, Fiji in 1987 at $3,398, and Greece in 1967 at $3,176. Thus, Lipset was right in thinking that the richer the country the more likely it is to sustain democracy, except in Argentina.
IV. Does History Repeat Itself?
Since our observations begin in 1950, the regimes we observed came into being as a result of either of two effects: their dynamic or the entrance of new countries into the world, or at least into our sample.
. . . . (1) the levels at which democracies emerged before World War II were highly scattered; (2) they did not differ between Western Europe and other parts of the world; and (3) once established, democracies were more likely to fall in the poorer countries. We are on firmer ground answering the second question. Comparing the “new” and the “old” countries shows that democracies are more brittle in the new countries while dictatorships are more likely to die in the old ones. And, . . . the level of development again has powerful effects. The probabilities of a democracy falling decline dramatically with level in both groups of countries: indeed, this probability is the same once countries reach an income above $2,000. The probability of a transition to democracy increases with level among the old countries. But among the countries that became independent after 1950, dictatorships are as stable when they are wealthy as when they are poor. Among fifteen dictatorships in new countries with incomes above $2,000, only one fell during their 185 years until 1990, in Suriname in 1988 at $2,888, and only one more, in the Seychelles, after 1990.
We may be confusing, however, the effect of levels at which countries were first observed and the effect of development they experienced during the period under scrutiny. And the new countries were much poorer–their average income was $1,103–than the old ones–which had an average income of $2,613–when they were first observed. The effects of the entry level are about the same for the two groups of countries. Democracies are more stable and dictatorships more brittle in countries that were wealthier, either when first observed in 1950 or whenever they became independent. But the effects of development since the time of entry differ greatly between the two groups of countries. The stability of democracy increases much more with development in the old than in the new countries. In turn, while development decreases slightly the probability of survival of dictatorships in old countries, the probability of transitions to democracy declines as new countries develop under authoritarian rule.
Hence, the promise that development would breed democracy proved to be particularly futile precisely with regard to those Third World countries to which it was supposed to offer hope. Development during the postwar period just did not have much of an impact on the collapse of dictatorships: an increase of per capita income of one thousand dollars raised the probability of dictatorship falling by only 1.12 percent among the old countries and lowered it by 1.90 percent among the new countries. But at least “modernization” worked in the right direction in the old countries, where most long-standing dictatorships, including those in Eastern Europe, did in the end fall. Most of the new countries, the great majority of them poor when they became independent, just remained poor; and those few that did develop remained authoritarian.
Whether couched in the language of the modernization perspective or the historical perspective, theories of the origins of democracy were deterministic. In the modernization theory no one does anything to bring democracy about; it is secreted by economic development and the corollary social transformations. Class actors do move history in Moore’s theory, but they operate at a distance of centuries: the agrarian class structure of the seventeenth century determines the regimes countries settle on two or three hundred years later. . . . The protagonists in the struggles for democracy could not and did not believe that the fate of their countries would be determined either by current levels of development or by the distant past. They maintained that, albeit within constraints, democratization was an outcome of actions, not just of conditions. Our findings strongly validate this . . . .
The emergence of democracy is not a by-product of economic development. Democracy is or is not established by political actors pursuing their goals, and it can be initiated at any level of development. Only once it is established do economic constraints play a role: the chances for the survival of democracy are greater when the country is richer. Yet even the current wealth of a country is not decisive: democracy is more likely to survive in a growing economy with less than $1,000 per capita income than in a country with an income between $1,000 and $2,000 that declines economically. If they succeed in generating development, democracies can survive even in the poorest nations.
Viewed from this perspective, the vision of the relation between development and democracy that dominated the intellectual mood and served to orient U.S. foreign policy during the cold war years appears strangely convoluted. While Lipset treated development as exogenous, his contemporaries were persuaded that dictatorship is the inevitable price of development. . . . Dictatorships are needed to generate development. Since in this view dictatorships generate development while development leads to democracy, the best way to democracy was said to be a circuitous one. Yet common sense would indicate that in order to strengthen democracy we should strengthen democracy, not support dictatorships. And, even if G. B. Shaw warned that “common sense is that which tells us that the world is flat,” the lesson of our analysis is that this time it is the best guide. With development, democracy can flourish in poor countries.
Okay, what are the implications of this study for democracy in China, Iraq, and Afghanistan? One of the favorite arguments for favoring the Chinese communist dictatorship is that as it pursues economic development it is creating the conditions for democracy. Wrong. Gross national income per capita in purchasing power parity (PPP) for China was $5,600 in 2004. At this level of development and with this growth rate, dictatorships do not fall. China will remain the dictatorship she is, unless there is an economic crisis, or outside shocks, like war. Then maybe democracy has a chance.
As to Afghanistan, it is a poor country with a ppp of $800 in 2003. In 2004, its growth rate was 7.5%, which should be even more under the new democracy the American Coalition husbanded. This means the new democracy in Afghanistan should be able to survive by itself, once the internal insurgency and terrorism is defeated.
Now, for Iraq, which is in the process of democratization, while undergoing an insurrection and terrorism, and occupation by the American Coalition. In 2004, its ppp was $2,100. Its present growth rate is incalculable. If democratization is successful, which now looks highly likely, then with the ongoing reconstruction of its economy now also underway, the removal of all the economic sanctions that were in place against Saddam Hussein, and the efficient development of its oil resources, rapid development seems certain. Just to take power generation as an example, before the war it was unable to keep up with demand and thus retarded development. By October of 2003, reconstruction had been returned to it to the prewar level, which it now exceeds. And with the continued focus of reconstruction on the distribution and generation network, it should enhance development and thus help stabilize Iraq’s democracy.
Human and Economic Development
By Level of Freedom