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Lecture for the Political Science Symposium on China and Eastern Asia 21/4-2008
The Lee-thesis
Amartya Sen (1999:15): [A] great many people in different countries of the world are systematically denied political liberty and basic civil rights. It is sometimes claimed that the denial of these rights helps to stimulate economic growth and is good for economic development. Some have even championed harsher political systems with denial of basic civil and political rights for their alleged advantage in promoting economic development. This thesis (often called the Lee thesis, attributed in some form to the former prime minister of Singapore, Lee Kuan Yew) is sometimes backed by some fairly rudimentary empirical evidence
Botswana
5,00
Mauritius Haiti Irelan Malaysia Cape Verde Barbados d Dominican Luxembourg India Republic Austria Egypt Chile growth7000 Belgium Pakistan Guinea-Bissau Brazil Lesotho 2,50 Germany Fiji Equatorial Guinea Panama Colombia Australia Jordan Algeria Costa Rica Bangladesh New Zealand Cameroon Guatemala Gambia, The Ghana Guinea Argentina Benin Chad Ethiopia 0,00 El Salvador Bolivia Mauritania Burundi Cote d'Ivorie Nigeria Comoros Madagascar Niger
-2,50
Angola
Congo (Kinshasa)
-5,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
FHITOTAG
Econometric analysis
Przeworski and Limongi (1993) and Przeworski et al. (2000): No overall effect on economic growth from regime type. Rodrik (2000): Democracy is positively related to highquality growth Barros inverse U-shape? Halperin et al (2005): The democracy-advantage and the Asian outliers Knutsen (2008): Democracy increases growth, decreases corruption and protects property rights better on average Growth and other economic indicators/factors: The democracy-advantage is larger for other indicators than for growth in GDP
But
The variance among dictatorships is far higher than among democracies, when it comes to for example economic growth performances: Some dictatorships perform extremely well and others perform horrendously! A large bulk of the well-performing dictatorships can be found in East Asia. Two questions we need to answer:
Why is it that some dictatorships can produce very high rates of economic growth? What explains the divergence in results among dictatorships?
Theoretical arguments
I will only go through the theoretical arguments that point in favor of dictatorships when it comes to promoting economic development. There are even more arguments pointing in favor of democracy, so be aware of the theoretical bias here! List of arguments on regime type and growth (Knutsen, 2006) and list of arguments on regime type and property rights (Knutsen, 2007): http://folk.uio.no/carlhk/ The arguments draw on different strands of literature and connects insights from different disciplines
A list of arguments
The property rights argument (Marx, Mill and median voters) The forced savings and investment argument The crushing of the unions argument The chaos-avoidance argument (Huntington and political and social stability) The avoiding gridlock and pushing reform argument The autonomy from interest group argument (centralization and the enlightened elite) The cultural argument
The divergence among dictatorships: The rational dictator and his context-dependent strategies Mancur Olson (1993&2003): Roving vs Stationary Bandit Robinson (2001): When is a state predatory? The endogeneity of survival probability Knutsen (2008): Power motivated dictators and the role of the security context (internal vs external threats). The case of Kuomintang.
Taiwan*
Singapore*
Botswana South Korea* China* Thailand* Cyprus Ireland Mauritius Haiti Indonesia* Malaysia* Cape Verde Seychelles Romania
6,4
6,3 6,1 5,2 4,7 4,4 4,4 4,3 4,3 4,2 4,2 4,0 3,7 3,7
5279
1193 2716 815 1822 5275 7260 4005 930 1087 2884 1387 4091 2056
4,7
2,3 3,7 6,6 3,6 1,9 1,1 2,0 5,9 5,3 4,0 4,1 4,7 5,3
-2,0
7,6 -0,6 -7,2 2,8 9,6 10,0 9,6 -5,3 -6,0 3,7
-2,8
China
6,00
Singapore
Vietnam
Malaysia Thailand
4,00
2,00
Japan
Philippines
Pakistan
R Sq Linear = 0,281
0,00
State
education, technology, ind.pol & cap alloc
feedback
Firms, labor
technology, capital, aid feedback open markets, demand
Outcome
International environment