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A Democratic Political System

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Economic growth varies from economic development due to the fact that it only entails the positive movement of a country’s GDP while economic development embraces other aspects in addition to economic growth. Economic development tends to focus on the quality of life of individuals while economic growth focuses more on the quantitative increase. Factors embraced by economic development include educational attainment, nutritional status as well as basic freedoms and spiritual freedoms. Economic development sustainability entails the progressive improvement of people’s quality of life in line with the economic growth. Moe E (2007, 3). Sustained economic progress entails prolonged economic growth and development. This paper will discuss or rather highlight the importance of democracy as an essential condition for sustained economic progress.

As Louis in ‘Economic and social development into the 21st century’ noted, most countries share the national goal of ensuring political stability, economic progress and social peace. Political stability remains a very vital aspect in ensuring democracy. To Louis economic progress entails growth while social peace embraces the efforts carried out to ensure equality.  Emmerij L (1997, 445). To attain this envied sustainability some conditions have to be met. The natural resources should not decrease with time and environmental degradation must at all costs be checked to ensure that this is attained. Sustained economic progress will therefore entail prolonged economic growth and development.

According to Wood in ‘Asian Democracy in world History’ democracy is characterized by an all inclusive participation in elections to office, each vote has equal value and voters have real free choices. There is free access to information and the rule of law guarantees people’s freedom. Wood T. (2003, 2). Democracy embraces the principles of human equality as all people regardless their social, religious or economic status have equal say during the elections. Whether democracy determines the economic development of a nation is a highly debatable issue. Some may dismiss the credibility of democracy in enhancing economic growth by citing communist states that have registered tremendous economic success like China. Proponents of democracy as a vehicle to sustained economic progress may counter this by citing the political unrest in China as a potential threat to the economic progress. Registering a positive economic growth and ensuring sustained economic progress are two different things all together. Although democracy may not initiate economic growth it will have a significant role in ensuring its sustainability. Wood T. (2003, 3).

A country is said to have full democracy if there are elected officials through free and fair elections, there is freedom pf expression, autonomy of association as well as an inclusive citizenship. When freedom of expression is embraced there is effective leadership and citizens can freely criticize their leaders should they behave inappropriately. Easy access to information ensures that all people are aware of their rights and responsibilities.  Democracy according to Francisco Rivera affects economic growth as it influences a country’s governance. Economic growth will be directly or indirectly affected by the kind and quality of governance that a country applies.

Although various studies have not established a clear relationship between economic growth and democracy there must be a correlation between sustained economic progress and democracy. Robert B (1996, 15) Dictatorship regimes may attain economic growth at the same rate or even at a higher rate than the democratic regimes due to the political interests of the leaders. Dictators may enhance economic growth with the knowledge that failure to do so they may be overthrown in a revolution but the level of sustainability of such economic progress is questionable.

 Democracy is linked to sustainable economic progress due to the fact that it is linked with good governance that is likely to pave way for innovation which is a key factor to promoting economic growth. In other words the positive effects of good governance that are brought about by democracy are what would be cited as the factors promoting sustained economic progress. Effective democracies have no room for corrupt and inefficient administrators and this makes the government run institutions operate efficiently and effectively. This way the country’s scarce resources are put into productive uses. With the public as the watch dog government institutions have to be operated effectively and this is definitely a plus to the country’s economy.

Political stability is a vital aspect in as far as any country’s economic growth is concerned. Effective democracies allow dialogue among their citizens and issues are addressed in a peaceful manner. Political unrest has negative effects on the economic growth. It could result to destruction of property and investors would incur losses. People will also tend to shy away from countries popular with political unrests. Political instability will be an important vehicle driving any nation to sustained economic prosperity as it encourages investment. When dictatorship regime fails to meet people’s expectations they will be ejected by force leading to political unrest which undermines economic growth.

Democracies embrace varying views as they are people led and this is vital in policy formulation and decision making. When strategies adopted are not forced onto the people there are high chances that they will be successful unlike when they are imposed on them. Participatory decision making will definitely boost a country’s economic sustainability.

An effective democracy ensures that there is law and order in its jurisdiction and this creates conducive environment for investment which promotes economic growth and development. Effective democracies will also ensure that corruption is kept at bay and risks of expropriation are minimized. The rule of law is very important as it guarantees fairness in the application of rules. Corruption is a threat to any democracy. In China for instance lack of the rule of law jeopardizes the development of democracy. Wood T. (2003, 4).

Good governance that is mostly attained through effective democracy ensures that there is equality in as far as the income distribution is concerned. Minimizing the gap between the rich and the poor will definitely enhance sustainable economic progress. Good governance is one that embraces comprehensive participation, accountability and stability. Polices that a government embraces have a significant role in influencing the country’s economic progress. Governments that adopt restrictive or protectionist policies will of course have a negative influence on the country’s trade and consequently affect economic growth and development. Corruption is a major setback to the economic as well as social development. It undermines the integrity of the institutions set in place to ensure that economic development is enhanced. Corruption deters the effective administration of the rule of law and this will have a negative impact in as far as investment decisions are concerned. It promotes inequalities between the rich and the poor and this deters economic progress. The poor are more likely to suffer when corruption prevails as their financial stand places them on a weaker ground. World Economic Outlook: (1994, 54).

Espen Moe in ‘Governance, growth and Global leadership’ notes that economic leadership is important as it affects a country’s economic growth and development. Moe E (2007, 3). Most developed countries embrace democracy and have been doing so for the past decades and from this one can deduce that democracy has a role to play in ensuring economic growth sustainability. The less developed countries are characterized with rampant corruption that undermines their economic progress.

Dictatorships regime may not be effective in as far as resource allocation is concerned as there are minimal checks and balances to keep the leaders on their toes. On the contrary democratic regimes would ensure allocative efficiency and have the public watching and pointing out contentious issues. Effective democracies ensure that property rights are respected and this plays a very significant role in ensuring that there is long term investment and consequently ensure sustainable economic progress.

In his distinguished book ‘democracy, governance and growth’, Stephen Knack points out that good governance is a prerequisite to sustained increases in people living standards. An effective democracy has social as well as legal mechanisms where contracts are enforced and property rights are strong. With bad governance however these powers can be misused and act as a source of insecurity. Knack S (2003, 3).

Poor societies according to Knack are poor due to the institutions as well as policies that they use. Such policies discourage foreign and domestic investment and this hinders economic growth and development. Effective government embrace democracy and they reduce the uncertainties that engulf poor governed states promoting investment and economic growth and development. Efficiency of exchange is attained and specialization is also encouraged. Specialization is important as it enhances division of labor and costs of production are also reduced. Although poor countries lack the capital to ensure economic development like their counterparts the developed nations they still remain in worse conditions even when they receive aids. This is attributed to poor governance that is characterized by corruption and inefficient institutions. Some developed countries have made it clear that they would stop giving their aid if they failed to embrace democracy as it would be wastage of their resources. Stallings B (1995, 328).

             According to IMF in ‘World Outlook’ the countries with poor economic growth rates continue to suffer from poor governance as well as social and political instability. The governments tend to be quite reluctant in implementing programs that would boost their economies. This reluctant nature is what triggers the actions of pressure groups but without effective accountability the countries retain their status quo. World Economic Outlook: (1994, 54). Although democratic political parties do not necessarily trigger economic growth or development they surely precipitate sustainable economic progress an any economy.


Alan Thomas Wood. (2003). Asian Democracy in World History

Routledge Publishers. P 1-5  (http://books.google.co.ke/books?id=eoQfBuwbBM4C&printsec=frontcover&dq=Asian+Democracy+in+World+History&sig=ACfU3U0famjRIciLjw0yB2WVtZ4rhDBwaQ#PPR9,M1)

Barbara Stallings. (1995). Global Change, Regional Response: The New International Context of Development. Cambridge University Press. P 328.                               (http://books.google.co.ke/books?id=ASKId4onb9UC&printsec=frontcover&dq=Global+Change,+Regional+Response:+The+New+International+Context+of+Development.&sig=ACfU3U1L6wh3QSUg3Uug_c0xbf4apIAZpg#PPR6,M1)

Barro, Robert (1996) Democracy and Growth, Journal of Economic Growth, 1: 1-1

Espen Moe. (2007). Governance, Growth and Global Leadership: The Role of the State in

Technological Progress, 1750-2000. Published by Ashgate Publishing, Ltd.,

Francisco L. Rivera-Batiz. Democracy, governance and economic growth: Theory and evidence. Retrieved on 3rd October 2008 from  http://www.columbia.edu/cu/economics/discpapr/DP0102-57.pdf.

Louis Emmerij. (1997). Economic and Social Development Into the XXI Century

Published by Inter-American Development Bank, p 445

Stephen F. Knack. (2003). Democracy, Governance, and Growth. University of Michigan Press.1-5. (http://books.google.co.ke/books?id=odYN-JmiAFQC&printsec=frontcover&dq=).+Governance,+Growth+and+Global+Leadership:+The+Role+of+the+State+in&sig=ACfU3U13tKMgvyZdeOzOc8CbK_tikhW7Rw)

World Economic Outlook: (1994). A Survey by the Staff of the International Monetary Fund Published by International Monetary Fund, p 54-55. (http://books.google.co.ke/books?id=3F7qMq-sJ8UC&printsec=frontcover&dq=World+Economic+Outlook:+(1994).+A+Survey+by+the+Staff+of+the+International+Monetary+Fund&sig=ACfU3U2bOoS-yAAHCHv42-Sj-N8nTafAZQ)

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