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Tidjane Thiam, writing in Newsweek’s recent special edition, says
democracy is vital to economic growth. As minister of planning and
economic development of Cote d’Ivoire, Thiam says, “Africa has paid too
little attention to political modernization. Too many African
governments pay only lip service to democracy, which is often limited to
simply holding regular elections.”
Whatever are the benefits of American-style democracy, democracy is
not a necessary condition for economic growth and, in fact, democracy
might impede economic growth. Let’s look at it.
There are several, once very impoverished countries that experienced
significant and rapid economic growth without democratic institutions.
Some examples and their respective per capita GDPs are: Chile ($12,700),
Hong Kong ($25,200), Taiwan ($12,000), Singapore ($28,000) and South
Korea ($13,600). To the extent that political democracy exists in these
countries today, it has only recently emerged.
What’s true about these once-backward countries is they all have
relatively free markets — in a word, they’re economically free. Each of
these countries, with the exception of South Korea, has either no or
very low protectionism — tariff and quotas on imports.
South Korea has what Gerald P. O’Driscoll, et al., in their book
“2000 Index of Economic Freedom” call moderate protectionism.
Governments in these countries impose a relatively low burden on its
citizens in the forms of taxation and economic regulation. These
countries also share another characteristic vital to economic growth:
secure property rights and rule of law.
Political democracy, and India is an excellent example, can
jeopardize economic prosperity because people, forming interest groups
and using their political freedom, can subvert and compromise the free
market institutions vital to economic growth.
Thiam is quite concerned about economic growth in sub-Saharan Africa,
but the problem isn’t democracy. With but a few exceptions, most of
black African nations fall into the category of being either
economically “unfree” or “repressed.” The same can be said about Africa
north of the Sahara. The continent’s countries falling into the category
of “mostly free” are: South Africa, Namibia, Zambia, Botswana,
Mauritius, Benin, Mali and Morocco. While citizens in these countries
remain poor by Western standards, they’re far better off than their
Thiam might do well turning his attention to his own country. Cote
d’Ivoire is typical of most African countries; it falls into the “mostly
unfree” category. It has very high levels of protectionism and
government economic regulation, plus corruption is rife. It also has a
very low level of property rights protection, and rule of law is highly
It should come as no surprise that when we’re treated to television
scenes of African famine, starvation and genocidal slaughter of hundreds
of thousands of Africans, it tends to be in those African nations that
fall into “mostly unfree” or “repressed” categories. This is not
uniquely African. In Eastern Europe, where we’ve witnessed starvation
and/or genocide, it’s occurred in “mostly unfree” or “repressed” nations
such as Bosnia, Croatia, Albania and Romania.
Evidence shows that no amount of IMF, World Bank and other handout
interventions can bring prosperity to repressive nations. Only Africans
can solve Africa’s problems. Unfortunately, Africans have been heeding
the counsel of socialists around the world, including U.S. socialists.
It’s instructive that Thiam is minister of planning and development in
Cote d’Ivoire. The idea that government planning and control are tickets
to economic growth has been thoroughly discredited.
African nations might also benefit if American black academics,
politicians and civil-rights leaders stopped laying out the welcome mat
and heaping praise on the leaders and officials of Africa’s brutal and