Are Short‐Sighted Politicians (and Greedy Voters) Undermining Democracy?
Writing for American.com, Kevin Hassett notes that politically repressive market‐oriented nations are growing faster than politically free market‐oriented countries. He issues the obvious caveat that — everything else being equal — we expect poorer countries to grow faster, but he wonders whether democratic regimes sow the seeds of their own destruction (or at least create for themselves a competitive disadvantage) by enabling people to seize unearned wealth through the political process:
…the countries that are economically and politically free are underperforming the countries that are economically but not politically free. For example, unfree China had a growth rate of 9.5 percent from 2001 to 2005. But China was not the whole story—Malaysia’s GDP grew 9.5 percent from 1991 to 1995, Singapore’s GDP grew 6.4 percent from 1996 to 2000, and Russia’s grew 6.1 percent from 2001 to 2005. The unfree governments now understand that they have to provide a good economy to keep citizens happy, and they understand that free‐market economies work best. Also, nearly all of the unfree nations are developing countries. History shows they grow faster, at least for a while, than mature nations. But being unfree may be an economic advantage. Dictatorships are not hamstrung by the preferences of voters for, say, a pervasive welfare state.
Advocates for freedom usually — and with great justification — blame politicians for these outcomes, but a new book by Bryan Caplan says voters deserve part of the blame. Both Cafe Hayek and Marginal Revolution draw attention to Caplan’s work.
