Constraint and Flexibility
I think Dani Rodrik is right that we should prefer democracy to dictatorship if we care about economic growth:
When we look at systematic historical evidence, instead of individual cases, we find that authoritarianism buys little in terms of economic growth. For every authoritarian country that has managed to grow rapidly, there are several that have floundered. For every Lee Kuan Yew of Singapore, there are many like Mobutu Sese Seko of the Congo.
As usual, though, the debate reveals why we need competitive government so damn badly. Chris Blattman’s term “authoritarian roulette” is apt: when we hand the keys to an economy to a small and unaccountable group of individuals, there is a chance things will turn out really well. Without needing to pander to ignorant and irrational voters, a wise and benevolent ruler can enact whichever policies best serve his subjects’ interests. That’s why we see relatively undemocratic countries at the top of economic freedom rankings.
The more likely outcome, though, is that things will turn out really badly. Without needing to pander to ignorant and irrational voters, a vicious and stupid ruler can enact whichever policies best screw up his subjects’ lives. That’s why we see relatively undemocratic countries at the bottom of the economic freedom rankings. With functional democracy, we almost always get mediocre policy. Given only those two options, I’d choose democracy.
The tradeoff between avoidance of tyranny and the possibility of really good government is not inevitable, though. The problem with democracy’s use of voice to constrain rulers is that it reduces flexibility in an undirected way: rulers are equally prevented from making good and bad decisions. The other potential way to constrain rulers – exit – does not have this problem. When people are voting with their feet (or their boat), autocratic rulers are prevented from doing stupid things while being at complete liberty to do sensible things. We get the best of both democracy and autocracy – constraint and flexibility simultaneously.