The Best Way to Grow Future Democracies

This article appeared in the Philadelphia Inquirer on February 15, 2004.

People who live in countries open to the global economy enjoy ahigher standard of living, on average, than those trapped behindhigh-tariff barriers. They eat better and live longer. Theirchildren are more likely to attend school than work in the fields.They can speak, assemble and worship more freely and elect theirrulers democratically. And because economically open countries aremore likely to be democracies, they are less likely to fight warswith each other.

Those observations are based not on academic theories, but onhow the world really works. Study after study confirms that nationsopen to international commerce grow faster and achieve higherincomes than those that are closed. That's because open societiescan more readily specialize in what they do best, and takeadvantage of lower global prices to benefit families and producersalike. As a result, the most dramatic progress against poverty hasoccurred in developing countries that have most aggressively openedtheir economies, such as China, Vietnam, Uganda, Chile andIndia.

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

In the past 30 years, as globalization has gained momentum, theshare of the world's population that enjoys full political andcivil freedoms has increased from 35 to 44 percent, while the sharedeprived of such freedoms fell from 47 to 35 percent. (The share inpartly free countries rose from 18 to 21 percent.) The number ofdemocracies worldwide has risen sharply in the past 15 years alongwith 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 recentyears has occurred in relatively protected and undemocraticsocieties such as Rwanda, Sierra Leone, Zimbabwe, and the formerYugoslavia. Envy and violence against economically successfulethnic minorities long predate globalization.

If anything, globalization has put a damper on such conflicts. Arecent World Bank study concluded: "The incidence of civil war hasdeclined sharply in the globalizing developing regions, but hasrisen sharply in Africa."

The reason is straightforward: Expanding markets channel apeople's ambition and energy into creating wealth, while closed andstagnant markets breed frustration and envy aimed at confiscatingwealth from others. In countries as varied as Taiwan, South Korea,Ghana, Mexico, Chile, and the former Soviet satellites in EasternEurope, peaceful political reform has gone hand-in-hand withglobalization.

Meanwhile, parts of the world that seethe the most with violenceand domestic unrest - sub-Saharan Africa and the Middle East - areamong the least open and democratic regions of the world, with eachsuffering declining shares of global trade and investment.

When Americans debate trade and globalization, more is at stakethan promoting economic growth. Expanding trade and investment tiescreate a more peaceful and hospitable world, where hope for abrighter future can finally replace frustration and envy.