Why Democracy is Better Than Autocracy For Economic Development

Why Democracy is Better Than Autocracy For Economic Development
Why, according to Olson, is democracy better than autocracy for economic development? What are the implications for your answer for the contrasting economic experiences of China and Western Europe since the late Middle Ages?

In the essay “Dictatorship, Democracy, and Development”, Mancur Olson proposes a theory of how economic growth is related to the development of democracy. Using rational-choice theory as the basis of his argument, he concludes that “[t]he conditions necessary for a lasting democracy are the same necessary for the security of property and contract rights that generates economic growth” . Thus, Olson does not claim a causal relationship between democracy and economic growth, but that democracy and sustained growth – requiring the same set of institutions – will occur simultaneously. Olson’s theory may provide an explanation for why the Chinese economy under Qing rule (1644-1912) experienced no intensive growth at all, whilst per capita income during the same period in Western Europe more than quadrupled. This essay will outline the key features of Olson’s argument in the context of China and Western Europe at this time. By contrasting the gradual emergence of democracy in Europe after the fall of medieval feudalism with the autocratic bureaucracy prevailing in China throughout the Qing dynasty, it will be argued that Olson’s theory is indeed applicable, yet not sufficient, for explaining the contrasting economic experiences of China and Western Europe since the late Middle Ages.