Skip to main content Accessibility help
×
×
Home

Investigating the Lee thesis: how bad is democracy for Asian economies?

  • Carl Henrik Knutsen (a1) (a2)

Abstract

This paper discusses the hypothesis that democracy hurts economic growth and development, also known as the Lee thesis, and discusses why one could expect dictatorship to be particularly beneficial for growth in the Asian context. Three general theoretical arguments in support of the Lee thesis are then presented. However, the empirical results, based on panel data analysis on more than 20 Asian countries, do not support the hypothesis that dictatorship increases economic growth in Asia. There is no significant, average effect of democracy on growth. Asian dictatorships do invest a larger fraction of their GDP than democracies, but they are worse at generating high enrollment ratios in education after primary school.

Copyright

Corresponding author

References

Hide All
Acemoglu, D.Robinson, J.A. (2006a), ‘Economic backwardness in political perspective’, American Political Science Review 100(1): 115131.
Acemoglu, D.Robinson, J.A. (2006b), Economic Origins of Dictatorship and Democracy, New York: Cambridge University Press.
Alvarez, M.E., Cheibub, J.A., Limongi, F., Przeworski, A. (2004), ACLP Data Set. Updated Version.
Banerjee, A.V.Duflo, E. (2005), ‘Growth theory through the lens of development economics’, in P. Aghion and S.N. Durlauf (eds), Handbook of Economic Growth Volume 1, North Holland: Elsevier, pp. 473552.
Barro, R.J. (1997), Determinants of Economic Growth. A Cross-Country Empirical Study, Cambridge, MA: The MIT Press.
Barro, R.J.Sala-i-Martin, X. (2004), Economic Growth, Cambridge, MA: MIT-Press.
Baum, M.A.Lake, D.A. (2003), ‘The political economy of growth: democracy and human capital’, American Journal of Political Science 47(2): 333347.
Beetham, D. (1999), Democracy and Human Rights, Cambridge: Polity Press.
Besley, T., Kudamatsu, M. (2007), ‘Making Autocracy Work’. Working Paper.
Blonigen, B.A. (2005), ‘A review of the empirical literature on FDI determinants’, Atlantic Economic Journal 33(4): 383403.
Boix, C. (2003), Democracy and Redistribution, New York: Cambridge University Press.
Brown, D.S. (1999), ‘Reading, writing and regime type: democracy’s impact on primary school enrollment’, Political Research Quarterly 52(4): 681707.
Bueno de Mesquita, B., Smith, A., Siverson, R.M.Morrow, J.D. (2003), The Logic of Political Survival, Cambridge, MA: MIT Press.
Burkhart, R.E.Lewis-Beck, M.S. (1994), ‘Comparative democracy: the economic development thesis’, American Political Science Review 88(4): 903910.
Chang, H.J. (2006), The East Asian Development Experience – The Miracle, the Crisis and the Future, London: Zed Books.
Cho, H.M.Kim, E.M. (1998), ‘State autonomy and its social conditions for economic development in South Korea and Taiwan’, in E.M. Kim (ed.), The Four Asian Tigers – Economic Development and the Global Political Economy, San Diego: Academic Press, pp. 125158.
Deyo, F.C. (1998), Industrial flexibility, economic restructuring and East Asian labor, in E.M. Kim (ed.), The Four Asian Tigers – Economic Development and the Global Political Economy, San Diego: Academic Press, pp. 184207.
Evans, P. (1995), Embedded Autonomy. States & Industrial Transformation, Princeton: Princeton University Press.
Feldstein, M.Horioka, C. (1980), ‘Domestic saving and international capital flows’, Economic Journal 90: 314329.
Feng, Y. (1997), ‘Democracy, political stability and economic growth’, British Journal of Political Science 27(3): 391418.
Freedom House. (2006), Freedom in the World – The Annual Survey of Political Rights and Civil Liberties, Lanham: Rowman & Littlefield.
Geddes, B. (2003), Paradigms and Sand Castles – Theory Building and Research Design in Comparative Politics, Ann Arbor: The University of Michigan Press.
Gilpin, R. (2001), Political Economy – Understanding the International Economic Order, Princeton: Princeton University Press.
Greene, W.H. (2003), Econometric Analysis, 5th edn., Upper Saddle River: Prentice Hall.
Hadenius, A., Teorell, J. (2006), ‘Authoritarian Regimes: Stability, Change, and Pathways to Democracy, 1972–2003’. Lund University: Working Paper 331.
Halperin, M.H., Siegle, J.T.Weinstein, M.M. (2005), The Democracy Advantage. How Democracies Promote Prosperity and Peace, New York: Routledge.
Helliwell, J.F. (1994), ‘Empirical linkages between democracy and economic growth’, British Journal of Political Science 24(2): 225248.
Helpman, E. (2004), The Mystery of Economic Growth, Cambridge, MA: The Belknap Press of Harvard University Press.
Inglehart, R.Welzel, C. (2006), Modernization, Cultural Change and Democracy – The Human Development Sequence, Cambridge: Cambridge University Press.
Johnson, C. (1982), MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975, Stanford: Stanford University Press.
Keynes, J.M. (1997), The General Theory of Employment, Interest and Money, New York: Prometheus Books.
Kim, D.J. (1994), ‘Is culture destiny?: The myth of Asia’s anti-democratic values’, Foreign Affairs 73(6): 189194.
King, G., Keohane, R.O.Verba, S. (1994), Designing Social Enquiry – Scientific Inference in Qualitative Research, Princeton: Princeton University Press.
Knutsen, C.H. (2007), Democracy and Property Rights. Oslo: Department of Economics, University of Oslo. Master thesis.
Knutsen, C.H. (2010), ‘Democracy, dictatorship and the protection of property rights’, Journal of Development Studies (forthcoming).
Knutsen, C.H. (2011), The Economic Effects of Democracy and Dictatorship. Oslo: Department of Political Science, University of Oslo. Phd thesis (forthcoming).
Lake, D.A.Baum, M.A. (2001), ‘The invisible hand of democracy’, Comparative Political Studies 34(6): 587621.
Leblang, D.A. (1996), ‘Property rights, democracy and economic growth’, Political Research Quarterly 49(1): 526.
Leblang, D.A. (1997), ‘Political democracy and economic growth: pooled cross-sectional and times-series evidence’, British Journal of Political Science 27(3): 453466.
Lee, H.J. (2003), ‘Development, crisis and Asian values’, East Asian Review 15(2): 2742.
Leftwich, A. (2000), States of Development: On the Primacy of Politics in Development, Cambridge: Polity Press.
Linz, J.J.Stepan, A. (1996), Problems of Democratic Transition and Consolidation – Southern Europe, South America and Post-Communist Europe, Baltimore: The Johns Hopkins University Press.
Lipset, S.M. (1959), ‘Some social requisites of democracy: economic development and political legitimacy’, The American Political Science Review 53(1): 69105.
Maddison, A. (2006), The World Economy, Paris: OECD Publishing.
Maddison, A. (2007), Contours of the World Economy, 1-2030 AD, Oxford: Oxford University Press.
Mankiw, G.N., Romer, D.Weil, D.N. (1992), ‘A contribution to the empirics of economic growth’, Quarterly Journal of Economics 107(2): 407437.
Marshall, M.G.Jaggers, K. (2005), Polity IV Project – Dataset Users’ Manual, College Park: Program Center for International Development and Conflict Management, University of Maryland.
North, D.C. (1990), Institutions, Institutional Change and Economic Performance, New York: Cambridge University Press.
Olson, M. (1982), The Rise and Decline of Nations. Economic Growth, Stagflation and Social Rigidities, New Haven: Yale University Press.
Pierson, P. (1998), ‘Irresistible forces, immovable object: post-industrial welfare states confront permanent austerity’, Journal of European Public Policy 5(4): 539560.
Przeworski, A.Limongi, F. (1993), ‘Political regimes and economic growth’, The Journal of Economic Perspectives 7(3): 5169.
Przeworski, A., Alvarez, M.E., Cheibub, J.A.Limongi, F. (2000), Democracy and Development: Political Institutions and Well-being in the World, 1950–1990, New York: Cambridge University Press.
Przeworski, A. (2004), Democracy and Economic Development. New York: Department of Politics, New York University. Paper.
Ravich, S.F. (2000), Marketization and Democracy: East Asian Experiences, Cambridge: Cambridge University Press.
Rock, M. (2009a), ‘Corruption and democracy’, The Journal of Development Studies 45(1): 5575.
Rock, M. (2009b), ‘Has democracy slowed growth in Asia?’, World Development 37(5): 941952.
Rodrik, D. (1991), ‘Policy uncertainty and private investment in developing countries’, Journal of Development Economics 36(2): 229242.
Rodrik, D. (1999a), ‘Democracies pay higher wages’, The Quarterly Journal of Economics 114(3): 707738.
Rodrik, D. (1999b), The New Global Economy and Developing Countries: Making Openness Work, Baltimore: The Johns Hopkins University Press.
Rodrik, D. (2000), ‘Institutions for High-Quality Growth: What They Are and How to Acquire Them’. Cambridge MA.: National Bureau of Economic Research. NBER Working Paper no 7540.
Romer, P. (1990), ‘Endogenous technological change’, Journal of Political Economy 98(5): 71102.
Sen, A. (1999), Development as Freedom, New York: Anchor Books.
Shin, K.Y. (1998), ‘The political economy of economic growth in East Asia: South Korea and Taiwan’, in E.M. Kim (ed.), The Four Asian Tigers – Economic Development and the Global Political Economy, San Diego: Academic Press, pp. 331.
Sikorski, D. (1996), ‘Effective government in Singapore: perspective of a concerned American’, Asian Survey 36(8): 818832.
Sirowy, L.Inkeles, A. (1990), ‘The effects of democracy on economic growth and inequality: a review’, Studies in Comparative International Development 25(1): 126157.
Solow, R.M. (1956), ‘A contribution to the theory of economic growth’, The Quarterly Journal of Economics 70(1): 6594.
Stasavage, D. (2005), ‘Democracy and education spending in Africa’, American Journal of Political Science 49(2): 343358.
Tsebelis, G. (2002), Veto Players – How Political Institutions Work, Princeton: Princeton University Press.
Wade, R. (1990), Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization, Princeton: Princeton University Press.
Wintrobe, R. (1998), The Political Economy of Dictatorship, Cambridge: Cambridge University Press.
World Bank (1993), The East Asian Miracle. Economic Growth and Public Policy, New York: Oxford University Press.
Young, A. (1995), ‘The Tyranny of numbers: confronting the statistical realities of the East Asian growth experience’, Quarterly Journal of Economics 110(3): 641680.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

European Political Science Review
  • ISSN: 1755-7739
  • EISSN: 1755-7747
  • URL: /core/journals/european-political-science-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Keywords

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed