Abstract: This research paper investigates the correlation between economic development and democracy in the broadest terms. To put it in a more narrow and well-structured way, it deals with how controversial outcomes can be observed among different regions compared with the dependent and independent variables. In this regard, the economic development parameter is the reason/triggering effect, while the outcome of either democratic or authoritarian regimes is the result. In other terms, democracy is the dependent variable, and economic development is the independent variable. It is more appropriate to claim that the political legacies of a country and inter-class relations and alliances have played roles in shaping the ruling structure rather than merely saying that economically weak countries tend to have authoritarian regimes. Economic development is “the process whereby simple, low-income national economies are transformed into modern industrial economies.” At the same time, democracy represents how people are ruled based on fairness and freedom of choice. It is important to remember that modernization and urbanization as a result of this changing order of state-class relationships are the two crucial reason-result relationships to conclude how democracy/economic development is well structured in the Transatlantic region, which was based on European tradition and legacy. Economic development is critical for creating democracies when class structure and alliances influence power shifts. Furthermore, we can discover distinct fragmentations if we analyze countries based on particular case studies because many variables influence a country’s democratic framework. As it can emerge under authoritarian rule, it can only find room for flourishing under democratic regimes because of many different variables.
Keywords: Economic development, Democracy, Authoritarian regimes, Balances of power, Inter-state relationship.
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This essay will extensively cover the academic literature, starting with Lipset, who conducted the first advanced study on this topic, and then Huber, Rueschemeyer, Stephens, Landmann, and Horowitz. Afterward, it will investigate today’s most developed countries and their regime structures by comparing their outlooks.
So firstly, it will explain and argue about literature and support the main argument that “democracy is economic development has a linear relationship in comparative studies, especially when we look at the distinction between old world structure and newcomers“. However, conjectural and internal forces also played roles when examining single case studies and similar cases. Secondly, the research will embed contemporary developed powers and their regime types by cross-national study.
In order to investigate a correlation in politics, it is essential to look at its historical background, societal structures, and legitimacy, as well as changing the world order. Because the interdisciplinary approach is essential for examining reliable outcomes, this essay will stress the argument by studying case-based studies under the framework of cross-national and comparative outlooks of countries. Furthermore, it is essential to add that transnational structure and the changing global order throughout the history of the contemporary world are also vital for understanding the correlation. From the birth of nation-states to the end of colonial rules of urbanization/modernization process, the rise of Communism and postponed the Cold War period have triggered effects for ‘old’ democracies in the northwest triangle of Europe and North America and the ‘new’ democracies in the rest of the world. Concerning that, the post-war period brought a range of new research questions and political problems to comparative politics. The latter part of the period saw the collapse of Communism, the end of the Cold War, renewed attention to international terrorism, and transitions to democracy in Latin America, Southern Europe, Africa, Asia, and Central and Eastern Europe. These events raised intriguing questions for comparativists as they focused on global, regional, and local aspects of political change, and many of these studies were motivated by the concern for achieving political stability in the short term and promoting democratic rule in the long term. (Landmann 2008, 96)
Thus, the correlation between democracy and economic development should be shaped by measurements defining independent (economic development) and dependent (democracy outcome) variables. Afterward, the outcome ought to be concluded among possible linear, curvilinear, and step-function varieties relationships. In Landmann’s view, linear relationships have upward and proportional trends in democracy and economic development. A curvilinear relationship similar to a linear one has a positive relation. In this case, there is a distinct range of economic development, after which the likelihood of a country becoming democratic does not change. A step-function is most different from the first two relationships. In this case, there is a distinct level of economic development, after which the likelihood of a country being democratic does not change. (Landmann 2008,102) That is significantly related to why economically weak countries tend to have authoritarian regimes.
Relationships among variables are the methods for comprising different outcomes between different countries. Moreover, understanding the comparative relationship between countries is related to outside effects and domestic structures. According to the authors, “Modernization may create the “prerequisites” for political conflict over the form of regime. But how these conflicts will develop remains unpredictable.” (Przeworski, etc., 2003– 111). From this point, explaining the exogenously and endogenous schemes in modernization theory under economic development and democracy correlation is the second significant step. “The distinction between the two explanations is about whether democracy resulted from development (endogenous) or it is Deus ex-machine (exogenously). According to some authors, there are countries where dictatorships persist when all the observable conditions indicate they should not.“(Przeworski et al. 2003– 108). It should be in mind that the outcome is extensively related to how much a country achieves industrialization and economic development, including elite settlement, state-class relationships, and mass mobilization. To support this point, it was said that which mechanism generates the relationship between development and democracy; we need to determine how the respective transition probabilities change with the level of development. (Przeworski, etc.2003– 110)
Regarding the economic development and democracy relationship in the academic literature, Seymour M. Lipset’s “Some Social Requests to Democracy” study is considered the first advanced study that sheds light on modernization theory within the measure of national wealth, extensive industrialization, and high levels of education. He advocated modernization theory, which famously posited that “the more well-to-do a nation, the greater the chances that it will sustain democracy.” Under his explanation of modernization theory, economic development and democracy have a positive linear relationship, and modernization is seen as an endogenous concept resulting from economic development and legitimacy. The political system’s legitimacy was influential in his study, which was regarded as an advanced study at that time. Political legitimacy is notable because it determines institutions’ value and consideration of property. In that context, Lipset stated, “Income, education, and religion do not have theoretical grounds for existing democracies. Political sub-systems of the society can play an adverse role in order to eliminate this concept.” (Lipset, 1959, p. 72)
In the time that (1958), his indices for economic wealth, urbanization, and industrialization were validated. Respectively, these indices are per capita income, the number of sons per motor vehicle and physician, and the number of radios, telephones, and newspapers per thousand persons for economic wealth. Secondly, for determining urbanization level, the percentage of the population in places of 20,000 and over, the percentage in communities of 100,000 and over, and the percentage residing in standard metropolitan areas. Thirdly, for industrialization parameters, the percentage of employed males in agriculture and the per capita commercially produced “energy” used in the country, measured in terms of tons of coal per person per year, were used.
Finally, he underlines the importance of education, the political role of the middle class, and intermediary organizations/institutions for preparing the inevitable ground for democracy. His definitions of democracy’s catalyzers are extensively binding for the cross-study of the Anglo-Saxon world and Latin America/Arab world/Asia in the 1950s, shaped by World Wars’ turmoil.
In the view of Lipset’s ideology, modernization, and class struggle are crucial for existing democracies under economic development, but education still plays a vital role. He examines countries across Latin America, Asia, and the Arab world, concluding that only the Philippines and Japan experienced democratic regimes, with the absence of totalitarian regimes, after the end of World War II. In comparison, the key thing to remember is that in terms of literacy, those continents were well behind the Anglo-Saxon world at that time relative to their economic wealth threshold. Thus, the absence of literacy – a deficiency of inter-class relationships, which was more shaped by the power of the upper–landed class and the lack of bourgeoisie and a multitude of organizations led to a less developed economy and democracy in those regions. To support this point, “The basic argument runs that capitalist economic development (facilitated and most developed in Protestant areas) created the burgher class whose existence was both a catalyst and a necessary condition for democracy.“(Lipset, 1959, p. 85)
However, when we look at the differentiation between European countries (Germany – France) in terms of literacy and democracy tie after the end of World War, it is observable that literacy did not directly cause democracy. They can both be considered the most educated nations in Europe. However, in Germany, the fascist ideology of Hitler inhibited the existence of democracy, civil society, and liberty, so the ideology was more favored the Aryan race of Germans and state-owned capitalism. To understand the reason behind this differentiation, Moore stated that “Any experiments with democracy soon disappeared as they were ultimately not to the liking of the landed upper classes and ‘fascist repression is the outcome’ the development of the commercial and industrial class was too weak and dependent on taking power on its own, and it, therefore, forged coalitions with the landed upper classes and royal bureaucracy.” (Landmann 2018, 116)
Related to Lipset’s ideas, it would be beneficial to consider Huber, Rueschemeyer, and Stephens’s studies to investigate the topic of domestic structures. The study mainly underlines the importance of the working class as an alliance with the bourgeoisie. They said, “The bourgeoisie made important contributions to the move towards democracy by insisting on its share in political power in the form of parliamentary control of the state, but the bourgeoisie was also hostile to further democratization when its interests seemed threatened.” (Huber, etc. 2003, 71). Therefore, inter-class relationships and alliances (domestic structure) between the educated middle-income and labor classes, born after the Industrial Revolution and gained importance in the 1920s, have a more steady background. In that understanding, A comparison between Latin America in where “the economically dominant classes accepted democracy only where their political interests were effectively protected by large parties of a conservative or non-ideological character.” (Huber, etc. 2003,71) Europe, where the transition to democracy in the 1920s was achieved extensively with the arrival of the labor class, would make clear the importance of the dimension mentioned above.
Unlikely the linear relationship in Lipset’s argument, Muller argued that economic development or “modernization” tended to be associated with declines in democracy. Declines in levels of democracy were especially prevalent in Latin American countries (e.g., Argentina, Brazil, Chile, Ecuador, El Salvador, Mexico, Panama, Peru, and Uruguay), where, except Venezuela, even the most economically advanced countries became less democratic as indicated by the repression of dissent (Mexico) or a change from a competitive democratic system to a harshly repressive military dictatorship (Argentina et al.). Significant declines in democracy also occurred in modernizing states in other regions (e.g., Greece in Europe; Lebanon, Tunisia, and Turkey in the Middle East; Malaysia and the Philip- pines in Asia). (Muller 1995, 967) Thus, the timing in the emergence of democracy with the support of the middle and working class is marked by the survival of democracies. Because at the high level of economic development, the opposition to democracy by the primary forcing class will not be eliminated as the country did not encounter income inequalities at the late stage of industrialization. As a result, the class- structure will not find the ground for shaking the upper- aristocracy’s dominance over the political and economic sphere of the state.
In South Korea, economic development positively changed democracy, but Taiwan’s transnational structure is also essential. Because South Korea was against North Korea and naturally Beijing and so on, their only chance was to follow this pattern in order to protect them in the hostile Cold War. In light of the transnational structure, here is an example of the Taiwan case. Dictatorship tends to be more democratized, as the country needs international support against Beijing. That case is an important example because it shows how a transnational structure framework instead of pursuing economic wealth can motivate democracy. According to Heo and Tan, “Countries in the U.S. camp often benefited from special market access arrangements to export products to the U.S. being part of the U.S. sphere of influence, however, could also conceivably affect the level of democracy in these countries.” (Heo and Tan 2001, 471)
After all, Moore’s modernization theory is discussed because it reflects skeptical interpretations of democracy/modernization patterns and outcomes around structuralist revolutionary theory. In the context of Moore’s modernization theory, there is not one strict pattern or route to modernization that manners are bourgeoisie – democracy, a revolution from above and below, in turn, triggers fascism and Communism, respectively. From a point of view, referring to Communism as a revolution from above partially defends the role of the bourgeoisie / intellectual middle class for revolutionary outcomes. His description of the modern structure of the Transatlantic region is under the framework of the Puritan Revolution (English et al.), the French Revolution, and the American Civil War. Subsequently, he stated, “The Puritan Revolution altered forever the role of the monarchy in Britain, while the French Revolution abolished royal absolutism and established the political rights of modern citizenship. While the American Revolution initially removed the role of the British crown, the American Civil War broke the landed upper classes and paved the way for the continued growth of industrial capitalism.” (Landmann 2008, 116). Concerning the rise of fascism and communism in Germany, Japan, China, and Russia, these coercive ruling authorities were born due to the absence of some social classes and economic obstacles. These are the industrial and commercial classes in line with the strong bourgeoisie. At the same time, the upper class was strong and could dominate the societal structure and outcome of the revolution. In Russia’s and China’s communist cases, a strong, centralized state structure induces an authoritarian government with strong oligarchs close to the central party, especially in Russia. Thus, to summarize, he describes the outcome of democracy in this way: “Most striking is the fact that democracy is seen to be the product of a violent break with the past, not a gradual installation of a political form as the result of incremental advances in the process of economic development.” (Landmann, 2008, p. 117) This point is the most standing argument until now because firstly it summarizes studies from Lipset to until his time.
In other words, economic development became the primary source of democracy in the old world, the Anglo-Saxon World, because of other dependent variables: the middle class – labor class- class relationship. Afterward, norms for the upper class were broken in favor of civil society. Those countries are the most developed based on their economic and political structures. Nevertheless, when we investigate single case studies, it can be seen that a country can have different democratic practices, such as in terms of north and south performances, such as Italy. Considering Arat, “a positive correlation between economic development and democracy displayed by the cross-sectional data, but not confirmed by the longitudinal data, supports the early argument of Lipset and Coleman.” (Arat, 1988, p. 34)
Economic development is essential for the emergence of democracies under the conditions that class structure and alliances could be triggering roles for the shifting power. Also, we can see different fragmentations if we investigate countries based on single case studies, as many factors shape a country’s democratic scheme. For instance, “Class structures, the nature of economic development, the state’s role, important historical events, political culture, and international factors” (Landmann, 2008, p. 126). So far, the main arguments have been examined by looking at the relationship between different variables through the eyes of different scholars. Firstly, Lipset gave an example of modernization as an endogenous conception of countries’ political legitimacy and economic development. Moreover, democracy is a direct result of economic development for him.
Meanwhile, Huber, Rueschemeyer, and Stephen proposed a new understanding of the “hostility of a bourgeoisie.” So Muller stated that the timing of democracy and the support of the middle-working class are essential phenomena for democratic outcomes in countries. In Taiwan’s case, the importance of international relations structure can be seen in Heo and Tan’s studies. Finally, the Understanding of democracy as a “violent past from the past” has been investigated while examining Moore.
This part of the essay will examine the world’s developed and developing countries in 2022. Afterward, its democratic structures will be illustrated according to their economic development threshold. In the broadest terms, the correlation between economic development and democracy is roughly more about maintaining the equal distribution of wealth under the common understanding of freedom, liberty, and civic society. That is called democratic norms. When looking at the cross-regional and single-base country approaches, there are independent variables called international relations structure, the political legacy of the selected country, history, societal backgrounds, and, most importantly, inter-class relations that explain how the outcomes change either in favor of democracy threshold or not.
First, it should highlight the Gross Domestic Product (GDP) measurement system, which means the total value of finished goods and services produced within a country during a specified period. Measurements of GDP are extensively divided into four categories. These are, respectively, Nominal GDP being the basic and standard way, Purchasing Power Parity (PPP) aiming to adjust for the differences in cost of living among countries, GDP Growth meaning the annual growth percentage rate of nominal GDP in local prices and currencies, GDP Per Capita, which is an indicator for the standard living of each person in a selective country.
Considering the nominal GDP of the countries, the list of the top 10 that goes down from the up is in order of U.S., China, Japan, Germany, India, United Kingdom, France, Russia, Canada, and Italy. While considering PPP, the list changes to China as the first country and India as the third. In 1979, Beijing opened doors for international trade and liberalized its economy after diplomatic relations with the U.S.; its subsequent export growth fueled the growth of manufacturing and urbanization. Furthermore, its export forces are composed of industrial productions and manufacturing goods, which means the country is not agrarian or less industrialized. PPP- GDP is vital in that regard, as it shows it can buy more products in China than in the U.S. This led to cheap labor forces and production expenditures, consequently, low conditions for workers. That is one of the reasons those significant powers in terms of Nominal GDP are considered developing countries, with the scope of corruption – inflexible business regulation and persistent poverty challenges due to high population. In that context, we should consider dollarization’s importance in the world finance/economy scheme. In addition, currency conversion thresholds and fixing prices at the dollar are some of the most critical standing points for green cash in the 2020s. Lastly, based on per capita, it can be seen that the US, Canada, Germany, United Kingdom, France, Italy, and Japan are ordered as the highest percentage, respectively. Russia, inherited from the Soviet Union, is ranked as the eighth-largest economy in the world. It was at the forefront of China and India according to per capita. The major European powers, namely Germany, the UK, France, and Italy, are facing problems due to low fertility, high levels of immigration that strain the social- welfare system, and fragmentations in societal structures in the continent of Europe. Mainly in Germany, the Brexit process’s overwhelming outcomes, social inequality in France, inefficient labor market – weak banking system – and a large underground economy with the context of regions altering benchmarks for Italy case could be examples.
On the other hand, the other three countries, namely China, Russia, and India, are criticized for their lack of enactment in democracy and civil/free society. In addition to that, some transnational problems have affected Russia after the invasion of Ukraine. China has had to deal with tariff barriers and limitations imposed by the U.S. After the collapse of the Soviet Union, Russian oligarchs mainly controlled the wealth, and China developed its way of capitalism under the context of a strong communist party ruling system and deficits of liberty and freedom. Moreover, is India seen as a particular case for authoritarianism embedded in its constitution and political structures with high poverty challenges?
Based on the case study approach in line with World Bank databases, it can be concluded that the countries in the transatlantic world are still performing better in terms of democracy and economic development performance variables. This argument is because their experience in civil society, liberty, and notions about humanitarian development is better practiced in the new world order in the post-war period after the collapse of the Soviet Union. It should be said that they are not trying to convert something into another thing that does not belong to its fabric settings. The level of development, measured by per capita income, provides limited insights into the likelihood of transitioning to democracy. However, per capita income significantly influences the survival of democracies. There is no doubt that democracy is stable in affluent countries. (Przeworski etc. 2003, 112)
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