Introduction

One popular explanation of how “too much” democracy can be bad for economic development involves the idea that democracy is “plagued” by redistributional impulses. Perhaps the most famous work to advance this theme is Mancur Olson's The Rise and Decline of Nations (1982); in this book interest groups are reclassified as “distributional coalitions” which pursue their own selfish interests at the expense of overall economic efficiency. The older and more established the democracy, the larger the number of distributional coalitions that have a chance to form, and the more the economic landscape is “rent” with inefficient laws, regulations, and other practices that hinder growth. In a similar vein, the vast literature on rent-seeking, which was originated by Gordon Tullock (1967), A.O. Krueger (1974), and R.A. Posner (1975), identified rent-seeking and its associated social costs with democratic government. This literature made it possible, by a strange twist of logic in which democracy is identified with the proliferation of economic monopolies, for monopoly to be elevated to the status of a serious problem.

Although critical of democratic processes, none of the above-named authors has embraced the notion that authoritarianism can facilitate economic development, and indeed, Olson in particular has forcefully argued the opposite (1993). However, the closely related idea that insulating economic policy from democratic processes – “a little bit”1 of dictatorship – can be good for economic development has gained currency, especially in political science and among both economic and political science theorists of development who specifically point to the capacity of authoritarian states to resist distributional pressures as the key to successful development.