Commentary

The Best Way to Grow Future Democracies

By Daniel Griswold
This article appeared in the Philadelphia Inquireron February 15, 2004.

People who live in countries open to the global economy enjoy a higher standard of living, on average, than those trapped behind high-tariff barriers. They eat better and live longer. Their children are more likely to attend school than work in the fields. They can speak, assemble and worship more freely and elect their rulers democratically. And because economically open countries are more likely to be democracies, they are less likely to fight wars with each other.

Those observations are based not on academic theories, but on how the world really works. Study after study confirms that nations open to international commerce grow faster and achieve higher incomes than those that are closed. That’s because open societies can more readily specialize in what they do best, and take advantage of lower global prices to benefit families and producers alike. As a result, the most dramatic progress against poverty has occurred in developing countries that have most aggressively opened their economies, such as China, Vietnam, Uganda, Chile and India.

Higher incomes mean a larger, more educated and politically engaged middle class - the foundation of most democracies. In a recent study for the Cato Institute, I found that citizens of nations that are the most open to trade are three times more likely to enjoy full political and civil liberties than those in nations that are the most closed to trade. Those in economically closed nations are nine times more likely to suffer under political tyranny than those in open economies.

In the past 30 years, as globalization has gained momentum, the share of the world’s population that enjoys full political and civil freedoms has increased from 35 to 44 percent, while the share deprived of such freedoms fell from 47 to 35 percent. (The share in partly free countries rose from 18 to 21 percent.) The number of democracies worldwide has risen sharply in the past 15 years along with the spread of more liberal and open economic policies.

There is no evidence that globalization has fomented violence, either within or among countries. The worst ethnic strife in recent years has occurred in relatively protected and undemocratic societies such as Rwanda, Sierra Leone, Zimbabwe, and the former Yugoslavia. Envy and violence against economically successful ethnic minorities long predate globalization.

If anything, globalization has put a damper on such conflicts. A recent World Bank study concluded: “The incidence of civil war has declined sharply in the globalizing developing regions, but has risen sharply in Africa.”

The reason is straightforward: Expanding markets channel a people’s ambition and energy into creating wealth, while closed and stagnant markets breed frustration and envy aimed at confiscating wealth from others. In countries as varied as Taiwan, South Korea, Ghana, Mexico, Chile, and the former Soviet satellites in Eastern Europe, peaceful political reform has gone hand-in-hand with globalization.

Meanwhile, parts of the world that seethe the most with violence and domestic unrest - sub-Saharan Africa and the Middle East - are among the least open and democratic regions of the world, with each suffering declining shares of global trade and investment.

When Americans debate trade and globalization, more is at stake than promoting economic growth. Expanding trade and investment ties create a more peaceful and hospitable world, where hope for a brighter future can finally replace frustration and envy.

Daniel Griswold is the director of the Center for Trade Policy Studies at the Cato Institute.