Introduction to Economic and Political Thought

Prof. Foudy

Seminars 4 to 7:Democracy, Forms of Governance and

Interest GroupsCopyright ©: Joseph Foudy 2013 (charts and illustrations copyrighted by original sources)

Overview1. Follow on Forms of Governance from

Last Week2. Defining Democracy / Its Spread3. Requirements for Democracy4. Illiberal Democracy 5. Societal Preconditions for Democracy6. British Politics/Yes Prime Minister7. Voting Challenges/Games

Overview8. Myth of the Rational Voter9. Origins of the State10. China Debate and Benevolent Autocrats

1. Who should rule?Forms of Governance

Plato vs. Rousseau

What was Plato’s view on Democracy?

Who did he argue should rule?

Technocratic Rule Rule based on expertise

But what is the record of experts… Some of the most experienced Presidents – Herbert Hoover,

James Buchanan One of the most experienced Secretaries of Defense – Don

Rumsfeld

Who is Lee Kuan Yew?

http://www.youtube.com/watch?v=tNhcOwhpR1E

Singapore(as it looked until World

War II)

Singapore (early 20th Century)

Singapore

Singapore’s Marina Bay Sands

Singapore’s Marina Bay Sands

Training/Selection of Future Guardians

Technocrats

AlternativesNot covered in readings, but FYI:

Timocracy - Honor Rule by people of “honor”

Timocracy/Plutocracy Rule by Wealth

Voting with Wealth Requirement

Case for/against them?

http://www.youtube.com/watch?v=Y07I_KER5fE

http://www.youtube.com/watch?v=l_5UZfwX0ss&feature=related

Forms of Governance Rousseau (in contrast to Plato)

Rousseau’s General Will Civil Religion and Tolerance Role of Leader/Ruler

Direct vs. Indirect Democracy

Rousseau’s Democracy What are the problems with Rousseau’s General Will

How does the will of all and the general will differ? Do you buy the distinction? Some argue a law is fair if it effects all people equally? Do laws effect all people equally?

Rousseau was concerned with indifference/free riding How do you assess his notions of religion and civil religion?

Compare Rousseau and Plato’s view of democracy with that of the “Unpolitical Animal” article.

Democracy Participatory vs. Representative Democracy

Advantages of each

Problems of each

What is our view of the motivations of voters? Do you think ballots should be open or closed? What did you think of Condorcet’s contention that people have a

better than average chance of getting things right and so large numbers of voters guarantee’s a correct outcome?

History of Democracy Ancient Greeks – popular participation Romans – government of laws, rules and contracts  Lord and Kin/Early England – separation of powers,

basic legal rights The Enlightenment – inalienable rights, corporations,

representative in return for taxation Industrial Revolution and Modern Capitalism –

corporations, laws, middle classes, destroys feudalism, new center of power in society

U.S. – first modern, democratic state

2. Definitions of Democracy Hundreds of definitions…

Schmitter and Karl:

“Certain rules, uncertain outcomes”

Democracy is the worst form of government except for all those others that have been tried - Winston Churchill

Polyarchy (Dahl) Polyarchy: A condition where power is shared by

three or more people

A conception beyond the issue of democracy that reminds us to look at how centralized power is a country.

Compare Russia and China today on democracy and the dispersion of power…

Polyarchy (Dahl)

Monocracy Oligarchies Polyarchy

Autocracy Democracy

The Spread of Democracy

The Spread of Democracy

Countries Calling Themselves Democracies

How is this chart important?

Democracy

3. Requirements for DemocracyWhat is the minimum necessary to achieve these circumstances for Dahl:1. Ability to discipline bureaucracy Political control over government

(Preferences -> Election -> Policies) 2. Have preferences taken into account Frequent and Fair Elections 3. Have those preferences weight equally All adults vote 4. Directly participate in elections All adults can stand for office 5. Ability to indicate preferences to others, Freedom of Speech/Association

free of fear/retaliation  6. Access to information Freedom of Press 7. Ability to form groups and Freedom of Association

debate and discuss views

How Democracies Differ…How Democracies Differ 1. Consensus Citizens differ on goals of state/divisions 2. Participation How many citizens active in process 3. Access Do all people/groups have equal access to state 4. Responsiveness Do states follow public opinion in short term 5. Majority Rule How are votes counted/allotted (electoral college?) 6. Parliamentary How powerful is the executive or courts? (US vs. Italy)

Sovereignty 

How Democracies Differ…How Democracies Differ 7. Party gov’t Role of political parties 8. Pluralism Number of competing interests 9. Federalism Unitary or Federal State 10. Presidentialism Nature/power of executive 11. Checks/ Different branches of gov’t, power of different branchesBalances 12. Consensus Citizens differ on goals of state/divisions

What Democracy is…

What Democracy is…

4. What is Illiberal Democracy?

Popular “elected” autocrats?

4. What is Illiberal Democracy?

Popular “elected” autocrats?

4. What is Illiberal Democracy?

Unelected / Unpopular, possibly fraudulently elected

4. What is Illiberal Democracy?

What is an illiberal democracy?

What is electoralism?

What does Zakaria mean by liberal constitutionalism?

What limits should be placed on governments?

Did the article alter your views on the “tyranny of the majority?”

How democratic is the US political system compared to other countries?

4. What is Illiberal Democracy?

“In Central Asia, elections, even when reasonably free, as in Kyrgyzstan and Kazakstan, have resulted in strong executives, weak legislatures and judiciaries, and few civil and economic liberties. In the Islamic world, from the Palestinian Authority to Iran to Pakistan, democratization has led to an increasing role for theocratic politics, eroding long-standing traditions of secularism and tolerance.

In many parts of that world, such as Tunisia, Morocco, Egypt, and some of the Gulf States, were elections to be held tomorrow, the resulting regimes would almost certainly be more illiberal than the ones now in place."

Case Study: Electoralism in Afghanistan

Recent Afghan elections are disputed. Hamid Karzai won majority of votes, but

widespread fraud is assumed. This has caused a loss of legitimacy in his

administration (widely seen as corrupt) Should the election matter?

He was seen as buying regional votes from warlords. Had he been able to buy his way to 50% without tampering with the vote, would he be more legitimate?

Large parts of the country are under the control of the Taliban and can not vote. Is this democratic? (And I could make the case they would have voted for Karzai!)

Case Study: Iraq You are tasked with creating

a political system for Iraq.

Facts: Ethnic Makeup (see right) Historically Sunni dominated

dictatorship (now fearful of losing their traditional privileges)

Kurds want their own state (much of the oil is there as well)

What is your recommendation?

Case Study: UN 192 Members

Facts: Vast differences in size and

population of member countries: China 1.3 billion peopleVanuatu 11,640

Vast differences in wealth, military power. Per capita GDP:

Qatar $86,000US: $47,000Congo $328

How can you set up voting in the UN to work?

5. Societal Preconditions for Democracy

What are the societal pre-conditions for democracy? (i.e. Where will it flourish?)

Civil Society and operative guidelines?

Level of Development?

Democracy and Income

Democracy and Income

Rule of Law and Income

Democracy Does wealth lead to democracy?

What would be the argument? Compare the mottos of different revolutions…

Or do the same conditions (especially institutions) that lead to economic growth and democracy?

Stage of Development and Democracy

Political System I II III IV VCompetitive 13% 33% 12% 57% 100%

Semi-competitive

25 17 30 13 0

Authoritarian 63 59 68 30 0

Source: Polyarchy, Page 65

6. Yes, Prime Minister

Remake of Original 1980s show Yes, Prime Minister

Characters: Jim Hacker Prime Minister

A longstanding member of parliament (MP) elevated to Prime Minister

Considered likeable, but easy to manipulate, not very smart and not very courageous, he has gotten his job as he is seen as not threatening to any one

!

Characters: Sir Humphrey Permanent Secretary for

Administrative Affairs Senior bureaucrat running the government

and reporting to Jim Hacker (though he often runs the department in reality and manipulates Jim Hacker)

Cunning and manipulative, he sees his job as protecting the status quo and the bureaucracy.

Highly educated and like most government officials went to Oxford or Cambridge (while politicians like Jim Hacker they serve often did not)

Wants the position of Cabinet Secretary, which advises the Prime Minister and is the most powerful bureaucrat in the country (and will soon get it)

Characters: Bernard Woolley Private Secretary to Jim

Hacker Career bureaucrat who is caught

between Jim Hacker and Sir Humphries

Decent and nice, but walks a tightrope

His job is to be loyal to the Minister Hacker, but he is often bullied by Sir Humphrey to help him in his schemes to manipulate Hacker

As a career bureaucrat he knows that ministers come and go, but he tries to do his job as honorably as possible

Characters: Claire Sutton Political Advisor to Prime

Minister Savvy and Cynical, the Prime

Minister and his party’s popularity is almost the only thing important to her.

Deeply suspicious of Sir Humphry

Key Differences between UK and US US presidents are elected for 4 year terms and

removable from office only be impeachment Presidents select their own cabinet of officials and

1000s of employees to control the executive branch. The executive and legislative branches are different

in the US.

In the UK, the majority party in parliament selects the Prime Minister. The Prime Minister then appoints the cabinet from active MPs.

The PM and his cabinet are sitting members of parliament that split their jobs between running the government, passing laws and campaigning.

Key Differences between UK and US Worse, the cabinet members are reshuffled frequently

and have little experience in the areas of government they run. They come with few aides loyal to them. This is totally unlike an American cabinet member that might

have 100 officials that join their department and are loyal only to them and the President in power.

The permanent bureaucracy is therefore much more powerful in the UK. The Chief bureaucrat in each government ministry is called

the Permanent Secretary and is sometimes seen as a shadow minister (Sir Humphries at the start of the TV show).

The most powerful bureaucrat in the country is the cabinet secretary, who serves the Prime Minister and coordinates the entire government (a job Sir Humphrey covets and gets)

Key Differences between UK and US The Prime Minister is a first among equals. He needs

the assent of the cabinet to approve major decisions. Control of the government can change when there

are elections - every few years. But the Prime Minister can be removed at any time

by a simple vote of no confidence in parliament Thus many PMs are removed from office by their own party

when the PM looks unpopular to the public and the party fears it will do poorly in the next election

Many cabinet members in the UK want the PMs job. If the US had the UK’s system, President Bush would have

been removed far earlier from office. Probably President Clinton as well.

Key Differences between UK and US PMs thus fear their own party allies more than other

parties and must always watch their backs. British party infighting is legendary (in contrast to the US

where democrats and republicans mainly fight each other). Many cabinet members hate each other. The PM may hate

many members of his/her cabinet (but who are kept in their jobs as they represent important party factions).

Jim Hacker will gain an opportunity to be Prime Minister due to two factors Career Civil Servants (like Sir Humphrey) see the other

candidates as too likely to interfere with the bureaucracy’s operations of government

The party is split into two wings that hate each other and a crisis will ensue unless a moderate, compromise candidate can be found.

7. Voting Challenges/Games Problems of how to aggregate individual preferences into

group preferences

System of voting matters Direct vs. Representative Proportional Representation vs. District System

Order of voting matters First Past the Post (Highest vote getter) vs. Runoff system

Though we will see even runoff systems can potentially fail What do you make of the US system of voting by congressional district? How does

this differ from other states?

Voting Challenges Highest Vote Count vs. Process of Elimination/Run Off

DinnerItalian MalaysianPizza KoreanTurkish ThaiEthiopian IndianGerman Vietnamese FrenchChinese (Cantonese)Chinese (Hunan style)Chinese (Shanghainese style)Chinese (Sichuan style)

Voting Challenges French Presidential Election of 2002

Why did Chirac win 82% of vote? If Jospin had one second, would he have won

round two? (Notice fragmentation of socialists)

Source: http://en.wikipedia.org/wiki/French_presidential_election,_2002

Voting Challenges NYC 2013 Democratic Primary

No Runoff if candidate gets 40%

Source: http://elections.huffingtonpost.com/2013/nyc-primary-results

Voting Challenges NYC City Council

Highest vote getter wins

Source: WNYC.org

Voting Challenges 2010 MTV Music Award Nominees:

30 Seconds To Mars, Kings and QueensAirplanes, B.o.B featuring Hayley WilliamsBad Romance, Lady GagaDog Days Are Over, Florence + The MachineNot Afraid, EminemTelephone, Lady Gaga featuring Beyoncé

Voting Challenges 2010 MTV Music Award Nominees:

30 Seconds To Mars, Kings and QueensAirplanes, B.o.B featuring Hayley WilliamsBad Romance, Lady GagaDog Days Are Over, Florence + The MachineNot Afraid, EminemTelephone, Lady Gaga featuring Beyoncé

http://www.youtube.com/watch?v=qrO4YZeyl0I&ob=av3e

Voting Challenges 2001 Emmy Awards

Outstanding Directing, Drama Series

Thomas Schlamme, 'The West Wing' (NBC) Jonathan Kaplan, 'ER' (NBC)Tim Van Patten, 'The Sopranos' (HBO)Steve Buscemi, 'The Sopranos,' (HBO)Allen Coulter, 'The Sopranos' (HBO)Laura Innes, 'The West Wing' (NBC)

Outstanding Writing, Drama Series

Robin Green and Mitchell Burgess, 'The Sopranos' (HBO)Lawrence Konner, 'The Sopranos' (HBO)Terence Winter and Tim Van Patten, 'The Sopranos' (HBO)Frank Renzulli and David Chase, 'The Sopranos' (HBO)Aaron Sorkin, 'The West Wing' (NBC)

Voting Challenges 2001 Emmy Awards

Outstanding Directing, Drama Series

Thomas Schlamme, 'The West Wing' (NBC) Jonathan Kaplan, 'ER' (NBC)Tim Van Patten, 'The Sopranos' (HBO)Steve Buscemi, 'The Sopranos,' (HBO)Allen Coulter, 'The Sopranos' (HBO)Laura Innes, 'The West Wing' (NBC)

Outstanding Writing, Drama Series

Robin Green and Mitchell Burgess, 'The Sopranos' (HBO)Lawrence Konner, 'The Sopranos' (HBO)Terence Winter and Tim Van Patten, 'The Sopranos' (HBO)Frank Renzulli and David Chase, 'The Sopranos' (HBO)Aaron Sorkin, 'The West Wing' (NBC)

http://en.wikipedia.org/wiki/List_of_awards_and_nominations_received_by_The_Sopranos

Voting Challenges Highest Vote Count vs. Process of Elimination

ElectoralVotes College

George W. Bush 50,456,002 47.87% 271 Al Gore 50,999,897 48.38% 266

Florida 2000

George W. Bush 2,912,790 48.847% Republican Al Gore 2,912,253 48.838% Democratic Ralph Nader 97,421 1.634% Green

538/NYTimes Model:

Source: NY Times:http://fivethirtyeight.blogs.nytimes.com/

Voting Challenges Alaska in 2010

According to a Rasmussen Reports poll of 500 likely voters in Alaska Sunday, Joe Miller is well ahead of Sen. Lisa Murkowski and Sitka Mayor Scott McAdams in the race for U.S. Senate.

Miller Conservative Republican Nominee 42% Murkowski Moderate Republican/Write in 27% McAdams Democrat 25%

How did Miller get the nomination? Turns out Murkowski won, but only after developing jingles to spell her

name (she had to be written) and a number of bad stumbles by her opponents).

U.S. Primary System What rules govern US primaries

Caucus vs. Voting Open vs. Party only

Who votes in primaries? Very conservative republicans, very liberal democrats Who do they prefer as candidates?

Who votes in general elections? What calculation does this create for primary voters? Does the median voter get their way?

Primary Order What are these states like?

Or rather primary voters in these states?

Iowa Caucus New Hampshire South Carolina Vote/Nevada Caucus

U.S. Primary System Primary Preferences (September 2011)

Rick Perry 30% Newt Gingrich 5% Mitt Romney 18% Michele Bachmann 4% Sarah Palin 15% Jon Huntsman 2% Ron Paul 12%  Rick Santorum 2% Herman Cain 5%

What Betting Markets Said:Price of $1 contract that pays out if that person is the GOP Nominee (essentially % probability)

What Betting Markets Said:Price of $1 contract that pays out if that person is the GOP Nominee (essentially % probability)

Source: Iowa Electronics Marketshttp://tippie.uiowa.edu/iem/markets/

Congressional Voting GOP in House

Will only bring legislation to floor if majority of Republicans support it Republicans have 242 seats and Democrats have 193 seats (of 435). So if all 193 democrats and 120 republicans (313 of 435 or 72%)

support a bill, it will still never get voted on.

Senate Any senator can filibuster/stop legislation You need 60 of 100 votes to end filibuster

Bundling/Log rolling You can get bundle “pork” historically for different districts to win votes

for unpopular legislation You can just bundle popular and unpopular legislation together

Allocation of Senate Seats Every state gets 2 senators irrespective of population (and DC

gets none).

GerrymanderingThe “Earmuff” District

Long history, but ability to use computers has lead to an explosion of its use. Source: http://pajamasmedia.com/zombie/2010/11/11/the-top-ten-most-gerrymandered-congressional-districts-in-the-united-states/

Gerrymandering How does one draw congressional seats?

Geography: Minimize size, round as possible, etc.

Race: You can create minority-majority districts (promote diversity).

Randomly: Allocate people or make districts with a random program

To help one party: Put opposition party all in a few districts and give yourself a healthy edge in remaining ones (Pennsylvania).

Imagine a state with 5 Million Dems, 5 Million Repubs and 10 districts. Create 2 districts that are 100% democratic with 2 million Dem voters, 7 remaining districts that are 4/7ths republican.

Pennsylvania is majority democratic, but republicans have 12 seats, democrats have 7 seats. See: http://fivethirtyeight.blogs.nytimes.com/2011/09/15/pennsylvania-electoral-college-plan-could-backfire-on-g-o-p/

To create safe districts: Create as many heavily democratic and republican seats as possible (what often happens now)

To make things competitive: Create as many swing districts as possible

Voting Challenges Proportional Representation Systems

Advantage: Inclusiveness Drawbacks: Fragmentation, Extremist Representation

Israeli Knesset (Fragmentation Example):

Voting Challenges Finding the Median Voter

Voting Challenges Order matters

80

Problem of Collective Action

Lobby ShirkLobby $10 for A

$10 for B

$20 for A

$5 for BShirk $5 for A

$20 for B

$0 for A

$0 for B

Student 1 (Al)

Student 2 (Bugsy)

Let’s play a simple game. Imagine I tax everyone in class $20. You can get the Dean to stop me only by writing a complaint and meeting for an hour to answer questions. You feel your time to do this alone is worth $15 (it will cost $10 if another student shares the task).

1) Do you lobby or shirk? Assume there are 2 students in the class:

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Problem of Collective ActionNow that was an easy game. You could still change policy and get the $20 back at a cost of $15 (you still lose $15, but hey it is less than $20).

In the real world, the cost of lobbying the government is high and the costs of protectionism for any individual good consumers buy is low.

2) A second catch might also be that a critical mass of students must send such an e-mail (say 20% of you).

*Now do you volunteer or shirk?

*What if I said just one of you needed to e-mail the dean? Does that make you more or less likely that you write an e-mail?

*This dramatically illustrates the free rider problem.

82

Problem of Collective Action3) Now assume I get a tax from Mayor Bloomberg of $1 on each New Yorker:

*If a handful of people complain, he will probably kill the tax.

*But it requires is a quick phone call or letter complaining (30 minutes of your time).

*How much is your time worth?

*How much is the call or postage?

*How worth it is it to the recipient of the tax?

*Are people likely to vote for or against him based on this single issue?

83

Politics of Protection Look at US political system (Congress)

Representative democracy with district voting. Politicians represent districts and vote in their

constituents’ interests. They also trade votes with other politicians to support

each other’s causes (log-rolling). They also receive contributions from groups trying to

influence their votes (a legalized form of bribery) . Even well-informed voters must assess whether

to re-elect politicians based on hundreds of votes and other factors (few single issue voters).

What would be different with direct democracy on all issues?

84

Enter Interest Groups In a system of representative democracy,

vocal minorities often win: Single Issues Voters will vote for or against a candidate

on a single issue, which is often minor to other voters Highly motivated interest groups can also contribute or

volunteer to help candidates and lobby Congress They also have their own public lobbying arms that

influence public opinion (e.g. alter beliefs about global warming in an extreme example)

Washington DC has 535 members of congress and 15,000 registered lobbyists (many more unregistered, spending 3.5 billion a yearhttp://www.opensecrets.org/news/2010/02/federal-lobbying-soars-in-2009.html

Want a satirical view? See Thank You for Smokinghttp://www.youtube.com/watch?v=iBELC_vxqhI

85

Politics of Protection For Presidential voting, winner takes all in states

Close districts receive extensive attention as do interest groups in those states (single issue voters matter)

Ohio and Pennsylvania have many well-paid steel workers whose jobs are threatened by free trade (a concentrated, focused group that looses big from free trade in steel)?

Who were the winners? What does the data below tell you about the attractiveness of

advocating protectionism for steel? (or policies toward retirees?) If you voted in 2004, what issues did you care about? Did steel

tariffs matter to you? Who was it an issue for?

Ohio Pennsylvania Florida

BushKerryNader

51%49%

49%51%

52%47% 1%

Case Study: Line Item Veto

Case Study: EU Parliament European Parliament has historically been a

weak institution. Over time is has gained new powers within the European Union framework. Let’s look at two powers:

In some limited voting circumstances, it gets an up or down final vote on a piece of legislation (a veto). How useful is this?

In terms of members of the executive branch of the EU (the European Commission), the parliament was granted an up-or-down vote on the entire Commission (but not member by member approvals). How useful is this?

Case Study: EU Parliament Ultimatum Game

Each question has aspects in common with the ultimatum game where one player gets to divide up $100 between them and the other play can agree to the split or say no and neither party gets any money

http://en.wikipedia.org/wiki/Ultimatum_game

8. Myth of Rational Voter Return to Question of Plato

on Dangers of Democracy

Myth of Rational Voter Caplan’s Critique:

There is a systematic bias in large rain of public attitudes. Public is not just ill-informed, but has beliefs that are consistently at variance with experts.

Example: “The National Survey of Public Knowledge of Welfare

Reform and the Federal Budget finds, for example, that 41% of Americans believe that foreign aid is one of the two biggest areas in the federal budget — versus 14% for Social Security.”

“The Survey of Americans and Economists on the Economy asks respondents to say whether “too many immigrants” is a major, minor, or non-reason why the economy is not doing better than it is. 47% of non-economists think it is a major reason; 80% of economists think it is not a reason at all.”

Myth of Rational Voter“Compared to the experts, laymen are much more skeptical of markets, especially international and labor markets, and much more pessimistic about the past, present, and future of the economy. When laymen see business conspiracies, economists see supply-and-demand. When laymen see ruinous competition from foreigners, economists see the wonder of comparative advantage. When laymen see dangerous downsizing, economists see wealth-enhancing reallocation of labor. When laymen see decline, economists see progress.”

Myth of Rational Voter How do you assess the proposed solution:

9. Origins of Political Order

Origins What are the societal pre-conditions for democracy? (i.e.

Where will it flourish?)

Civil Society and operative guidelines?

Level of Development?

State Building is a key global challenge

Recall Somalia…

Afghanistan 1990-todayWhat happened?

Afghanistan 1990-todayWhat happened?

Afghanistan Ethnic Map

Afghanistan Ethnic Map

Afghanistan Ethnic Map

Opium Poppy Cultivation

Iraq Ethnic Map

Source: Globalsecurity.org

Iraq

Source: BaghdadMuseum.org

Iraq Tribal Map

Source: Globalsecurity.org

10. China Debate and Benevolent Autocrats

What does Eric Li argue?

What advantages do you see from one party rule?

What do you believe are the strongest points makes and evidence he uses?

China Debate What does Yasheng Huang counter argue?

What issues does he see with CCP?

How does he see China evolving going forward?

Benevolent Autocrats

William Easterly’s assess relationship between regime type (democracy vs. dictatorship) and economic growth

Benevolent Autocrats Prior Works

Benevolent Autocrats Common argument is that democracies are unable to enact

popular policies

“Enlightened”/”Benevolent” dictators can do better Cases of Singapore, Korea and Taiwan China today, especially in comparison to India until recently

Shades of Plato’s Guardians

What is your assessment of this argument?

Benevolent Autocrats (Almost) All Economic Successes are Dictatorships

Benevolent Autocrats But not all dictatorships are economic successes, in fact all

resounding failures are dictatorships

Benevolent Autocrats But not all dictatorships are success, in fact so are resounding

failures

Or a location in East Asia? What do all these states have in common?

Source: http://shaneleavy.blogspot.com/2011/06/economic-growth-trends-since-1969.html

3 Dictatorships Philippines was dictatorship until 1986, always an economic

basket case. Indonesia democratizes after 1998.

Source: http://shaneleavy.blogspot.com/2011/06/economic-growth-trends-since-1969.html

Korean Growth Dictatorship until 1980s, Democracy thereafter

Source: http://socialisteconomicbulletin.blogspot.com/2009_05_01_archive.html

Taiwanese Growth Dictatorship until 1980s, Democracy thereafter

Source: http://www.moneyweek.com/investments/stock-markets/moneyweek-asia-taiwan-could-be-the-best-bet-on-asia-94503

Japanese Growth

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Growth eventually slowed down and then flattened out, but always a democracy (Japanese style of course)

010

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2000

030

000

4000

050

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GD

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1950 1960 1970 1980 1990 2000

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Growth’s Slows as State’s “Catch Up”

Developed

Developing States

GDP

Time

Again for example, Japan

0%

2%

4%

6%

8%

10%

12%

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Ann

ual G

DP G

row

th R

ate

(3-y

r M

A) 1956-73: 9.2%

1975-91: 4.1%

1992-2006: 1.2%

European Democracies Impressive Impressive until 1970s or so, then mixed results. But

outpaced most of world other than Asian tigers for decades.

Source: http://shaneleavy.blogspot.com/2011/06/economic-growth-trends-since-1969.html

Latin America Mixed democracy and dictatorships. Many dictatorships from

mid-1960s to mid-1980s

Source: http://shaneleavy.blogspot.com/2011/06/economic-growth-trends-since-1969.html

Economist Magazine State Capitalism (usually under one party states) is on the

march

Economist Magazine One party states perhaps good at infrastructure, but not

innovation

Problems for Easterly Problems with theory:

“the problem of reversing conditional probability mentioned above (all dogs are animals, therefore all animals are dogs);

confirmation bias: despite their being a roughly equal number of stagnant autocracies to high-growth autocracies, there are probably 12 times as many academic papers on the successes than the failures;

availability bias: there's more data available on China than Zimbabwe;

Problems for Easterly Problems with theory:

leadership bias: psychologically, we tend to impute the success or failure of a group to the leader, regardless of contrary evidence;

narrative bias: it's easier to tell and believe narratives about heroic individual leaders than about complex self-reinforcing political and economic systems”

-Source: “Ich Bin Ein Benevolent Autocrat” Wagner Blog, 2/24/2011

This is a great list of the problems that beset all academic areas of study – economics, political science, medicine, etc.!!!

Counterfactual Challenge How fast would Korea or Taiwan have grown if they became

democracies earlier? Japan grew as fast earlier as a democracy

If Singapore were to liberalize its political system, do we expect growth would slow down? Would the nature of economic policy change?

What would democracy mean for China? Land confiscations harder, more worker rights, perhaps weaker SOEs –

but are these bad in the long term for China?

India underperformed China in recent decades, would it have grown faster as a dictatorship? Note many are dubious it could ever be governed as an autocracy

Comparison in Back of Most Minds India vs. China