Democracy and Development

Rich countries tend to be more democratic than poor countries. Understanding the link between democracy and development could be crucial for policy making at the national and international level. In addition to giving citizens more political freedoms, democracies are on average less likely to be at war with each other than dictatorships.

 A lack of democratic governance structures could be an obstacle to sustainable development. Conversely, persistent poverty and a lack of economic development could hamper the establishment of democracy.

For policy purposes, it is important to understand the direction of causality between democracy and development. Does development lead to democracy, as envisaged by various multilateral development organizations?

Or does democracy lead to development, as implied in the economic transition plans of Eastern and Central Europe? Or does causality run both ways? What are the implications for foreign aid, foreign direct investment, international trade negotiations, business strategies, the role of NGOs, and international institution-building?

What sort of democratic institutions are conducive to economic development and political freedom? How should the will of the majority be balanced by protection of minority rights? How should the activities of special interest groups be channeled through the political process so as to promote an adequate balance between political freedom and diversity?

Is there a general strategy for policy makers that would help promote peace and prosperity on a global scale? What is the role of business in this context? Does international investment and trade promote democratic change or does it stabilize dictatorial regimes? Is development cooperation with local NGOs an alternative strategy to undermine non-democratic regimes or does it lead to dictatorial backlash?