Autocratic regimes fall short compared to democracies in terms of economic progress: The reasons behind this economic disparity
In a comparative analysis of 176 countries and various forms of government spanning from 1961 to 2010, it has been observed that democracies hold a significant edge over autocratic regimes when it comes to promoting prosperity. This advantage is largely attributed to factors such as rule of law, political freedom, accountable institutions, economic diversification, and better governance.
Democratization, on average, brings about a 12.3% increase in GDP per capita over a period of 20 years, particularly in countries with initially weaker legal institutions. In contrast, countries with stronger rule-of-law frameworks experience only 5.3% gains [1]. Accountable and transparent institutions in democracies underpin sustainable economic growth and stability, fostering better public goods provision and higher private investment [1][3].
Economically, democracies tend to be more resilient. They maintain citizens' economic well-being above a threshold (about $16,750 per capita), enabling democratic regimes to endure and support prosperity [2]. Economic diversification is more common in democracies, as economies reliant on few natural resources tend to weaken democracy and economic prospects due to concentrated power and decreased incentives for broader prosperity [2].
Autocracies can vary greatly in their economic performance. Institutionalized autocracies tend to perform economically closer to democracies, while personalist regimes suffer economically due to lower investment, poor public goods, and conflict, which reduce prosperity compared to democracies [3].
Countries like Turkey, Venezuela, and the USA under Donald Trump have shown similarities in terms of autocratic tendencies, and these autocratic tendencies could potentially lead to decreasing investments and rising inflation [6]. Examples of economic developments under non-democratic governments, such as China and Singapore, have taken place. However, the future economic developments could be negatively influenced by autocratic tendencies [7].
In conclusion, the advantage in prosperity arises because democracies provide more stable, inclusive, and accountable frameworks supporting broad-based economic growth, while autocracies—especially personalist ones—face institutional weaknesses, investment shortfalls, and greater conflict risks that hinder prosperity [1][2][3]. It is essential to consider these factors when evaluating the economic potential of different countries and governments.
- The comparative analysis reveals that of policy-and-legislation, democracies generally show a more accountable and transparent structure, which significantly contributes to economic stability and growth, particularly in countries with initially weaker legal institutions.
- In the realm of general-news, economically, democracies tend to be more resilient, and policies are often oriented towards promoting economic diversification, unlike autocracies, where economic performance can vary greatly, often due to institutional weaknesses, investment shortfalls, and conflict risks.
