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Constraint and Flexibility

August 18, 2010

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.

In other words: Heathian anarchism FTW!

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2 Comments
  1. August 18, 2010 1:17 pm

    Fareed Zakaria’s “The Future of Freedom” does an excellent job describing why Singapore succeeded and the Congo failed.

  2. August 31, 2010 8:29 am

    I find the claim shaky, that no-barrier scenario will actually cause rulers (Taylor’s term) to make good decisions and avoid bad ones.

    I think far fewer problems of modern democracies are as strongly attributable to emigration barriers as Taylor thinks. Noticeably absent is taking into account human nature, on both side of the ruling/ruled divide:

    About the rulers, what kind of people are attracted to ruling? what motives drive him/her? If there’s absolutely zero social, cultural, historical, or other cohesion to the people being ruled (as population is to respond with their feet to the shifting winds of government), then the type of person who rules has little social incentive to rule better – only the economic incentive (itself flawed for reasons below). And here a large body of research continuously shows that people respond to additional motives besides the economic, most often a mixture of them.

    On the ruled side, even if everyone were technically free to leave at any time, I don’t think nearly enough would leave fast enough to effectively create the kind of impact on leadership that Taylor seems to envision. The legal barriers set up today or only part of the true moving cost to an individual. Besides the considerable economic cost and inconvenience in relocating (certainly if one is to do so semi-regularly), there is a strong psychological bond to one’s family, friends and, yes, culture, that keeps many people grounded. This isn’t a complex price market reacting with the frantic rapidity of a stock market. It takes a critical situation to drive people out en masse, as Europe finds out every day. And already in today’s world, most rulers that bad have lost the minority capable of change, and have effectively blocked the majority, desirous to leave though they may be. Granted, to wish freedom into existence within a despotic state (and state of affairs), probably makes for some interesting afternoon chatter, but doesn’t offer much in terms of systematic change in the real world.

    Not-so-hidden in Taylor’s outlook here and elsewhere is a view of Homo Erectus as an atomized hyper-individual with strictly rational motives, in the narrow political sense. Taylor still has to account for the behavior of those people who clearly respond to other sets of motives as well – religion, culture, art, social atmosphere, procreation – all of which would crowd out, or at least dampen, his theoretical “if you don’t like it, leave” effect on good rule. In other words, Taylor’s doing that classic error of the various “isms” – overestimating the proportion of the population that would act exactly as he would.

    Taking this one step further, Taylor would do well to take into account conservatives the world over, with whom Taylor wouldn’t agree, but he could scarcely argue they don’t *exist*in his new world order. To quote one of their foremost writers, Irving Babbitt:

    “By this unprincipled facility of changing the state as often, and as much, and in so many ways as there are floating fancies or fashions, the whole chain and the continuity of the commonwealth would be broken. [..] Men would become little better than the flies of summer.”

    For Taylor, no doubt, that continuity is, and always was, a figment of the imagination. But the fact remains that for every Taylor who finds meaning in working out a new world order maximizing geographical choice, is another who feels post-identity politics has trimmed their choice, and thus their meaning. To them, popularity-contest politics can no more generate significant meaning as American Idol can generate meaningful music.

    While I try to avoid dichotomies, largely one of two things can happen, IMO, if we give Taylor’s model a shot: either a) not nearly enough population change happens on the ground for the “Taylor effect” to kick in, or b) the change necessary for said effect actually does occur, which would have to mean fairly massive population exchange. Clearly Taylor would be foaming at the mouth of the thought of that one. But in the name of making everyone better off, he’s telling those who respond to additional motives, that those motives are intrinsically less worthy.

    In the end, it always comes down to values.

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