Is Linking Democracy and Economic Growth Telling a Bedtime Story?
By Fekade Shewakena
At the world Economic Forum, conference held in Addis Ababa, in May, 2012 that some in the media dubbed the Meles Zenawi Show , Ato Meles Zenawi said “there is no direct relationship between economic growth and democracy, historically or theoretically…..I don’t believe in bedtime stories, contrived arguments linking economic growth with democracy”, He was even more unequivocal and emphatic when he added that “We need to democratize but not in order to grow”. According to him the only reason we need to democratize for is “in order to survive as united sane nation”. He didn’t care to elaborate on what he meant by surviving as united sane nation. Only God knows how he compartmentalized the usefulness of democracy for the sanity of a nation and how any such sanity doesn’t directly relate to economic growth. There is every reason to suspect that this was a strong attempt on the part of the Prime Minister to fend off the barrage of criticism coming at him these days about the closure of democratic space in the country, the abuse of human rights, the repression of civil society and free expression from his irate donors in the west. He was in effect saying judge me by the economic growth statistics I give you, not by my credentials on democracy and human rights. I suspect his experience of attempted opening of the country for democracy in 2005 has fatally blinded him.
If Ato Meles was opining as an academic and not as a head of a government, we could have taken his statement lightly and perhaps as something which is only academic, i.e., something that has value only in the exercise of thought with benign relevance to real world situations. But when such declarative statements as the Prime Minister’s, which are at best based on half truths, come from people in positions of power, it gets troubling and scary. It is even more troubling when the individuals are the kinds that pursue their beliefs with zeal and propensity to use the machinery of state force at their disposal in pursuit of their ideas. Anybody who lives the military dictatorship in Ethiopia remembers the deafening declaratory statements of Mengistu and his officials such as the “not only do we control the reactionaries - we will control nature too” slogan. A regime official who I once politely told that the Gambella plains were unfit to resettle peasants moved from highland Ethiopia, accused me of preaching cowardice and told me that I am confused by pseudo education. He said what is important is the belief and conviction, the rest is easy. I only told him that unlike the highlands, the flat plain in Gambella has drainage problems, and that the soil gets waterlogged and leached and not reach in soluble minerals that many crops need adding that the green forest should not fool us. I had to shut up my coward mouth and regretted for venturing into dangerous territory. The disingenuous project ended up in shambles even before it started.
Meles’s declaratory statement is also in the same tradition. It is an indication of a decision by him that the prevailing intolerance of dissent and civil discourse is going to be kept in place. I fear that this may lead to the intensification of existing conflicts and widespread discontent in the country. As someone who doesn’t prefer a violent or revolutionary approach to the solution of Ethiopia’s problems, I sincerely do fear.
The fact of the matter is that Mr. Prime Minister is half right. But his assertion seems to be based on linear thinking and selective reading of the literature on the relationship between democracy and economic growth. I am sure he has read the works of some in academia that do make similar generalizations about the relationship between democracy and economic growth. He has disregarded that in many cases even these conclusions depend on the measures they use and the context of their studies. Unlike the Prime Minister, many of these academics and researchers who do come to these conclusions are careful to add that the relationship between democracy and economic growth is more complex than meets the eye and encourage us to do more innovative examination and develop methodologies and do a more careful use of data. In fact, the literature of political economic thoughts regarding the relationship between democracy and economic growth is in many cases contentious and inconclusive and varies with the country or region considered and the kind of data used.
Yes, economic growth can occur even under tyrannical dictatorships. The world has many examples of places where economic growth and democracy even seem to relate inversely, so much that the linear thinker can conclude democracy affects economic growth negatively. Kaddafi’s Libya and many of the rich countries in the Gulf and Asia provide ample example of this. Russia’s transformative achievement in infrastructure such as the building of the world famous Moscow subway and other industries occurred under iron feasted Joseph Stalin. China’s one party rule hasn’t slowed its growth although many attribute the speed of its growth to liberalization within the party and managing conflicts including the country’s cultural context. That you do and don’t fit the variables in a linear regression model and predict an outcome may not necessarily mean a universal relationship does or doesn’t exist. Professional observers suggest the need for a closer examination of each country’s economic realities, resource bases, level of development and their socio-cultural environments more than accepting these observations as universal truth as our Prime Minister does. But none on all sides in the debate on the subject come to saying anything approaching what our Prime Minister said – that it is a bedtime story. Like all knowledge the enquiry goes on and on. Our Prime Minister seems to want to stop it.
If I am as selective as Meles, I can bring testimonies of non-armchair researchers who made many empirical studies that show the direct effects of democracy on economic growth and development using various components of democracy as measures. Scholars like Cooper Drury et al., who actually made hands in the mud kind of research as opposed to armchair contemplation, for example, argue:
…one of democracy's indirect benefits is its ability to mitigate the detrimental effect of corruption on economic growth. Although corruption certainly occurs in democracies, the electoral mechanism inhibits politicians from engaging in corrupt acts that damage overall economic performance and thereby jeopardize their political survival. Using time-series cross-section data for more than 100 countries from 1982-97, we show that corruption has no significant effect on economic growth in democracies, while non-democracies suffer significant economic harm from corruption. 
These individuals have crunched massive data across time to be dismissed as tellers of bedtime stories. Bringing
Nobel Prize winner political economist, Amartya Sen, who famously said democracies don’t starve, in this argument with our Prime Minister, may be like taking a gun to a knife fight. Instead, let me bring two other Indian professors, Sarbapriya Ray and Ishita Aditya Ray, who used a fairly sophisticated model to understand causality between democracy and economic growth. Here is what they say:
Using co-integration analysis for the period 1980-81 to 2009-10, we seek to identify the relationship between economic growth and democracy. Our empirical results suggest that there is a long run bi-directional causality between economic growth and democracy in India. Moreover, our statistical investigation confirms that democracy affects economic growth positively and vice versa both at regional level as well as aggregate level. 
There are actually many studies that show that India’s current leap to a newly developed country relates to its robust democracy. I could have gone on and on citing other studies that challenge the Prime Minister’s wild assertions that the relationship is a bedtime story. I believe Ato Meles is savvy enough to locate the materials if he intends to base his views in knowledge and honesty and doesn’t have an axe to grind against democracy.
In my view, there is perhaps no other country that needs democracy as the primary tool of getting out of its poverty as Ethiopia does. In the past we tried it through governments that tightly control the people and failed abysmally. Now we have to try a government where our people have at least some significant say in it. It is simple common sense to understand that economic growth and development in Ethiopia cannot be achieved and sustained in conditions where simmering political conflicts prevail, where there is little rule of law, where people have no confidence and control on what they do, where corruption and favoritism are rampant and government continuously hovers over the heads of everyone. The largely aid funded growth in Ethiopia in infrastructure and social services and massive Diaspora remittance are no substitute to what we can get out of building democratic institutions. The PM’s suggestion that Ethiopia doesn’t need to democratize for economic growth is not different from his now defunct idea of choosing Albania as our model. There is some weird picture we see in Ethiopia today when we juxtapose the economic gains over the past several years and the real life conditions of the Ethiopian people. How is it that the economic growth that Ato Meles brags about is related to more and more people becoming unable to feed themselves and their children?
The multidimensional conflicts prevailing in Ethiopia need a resolution through a democratic and transparent discourse. Suppressing them is guaranteeing the destruction of whatever gains we have made. We are already losing a lot of opportunity because of the closure of the political space in the country. Economic growth cannot be guaranteed under conditions where Ethiopia is losing its human capital at alarming rates. I see a massive wealth and potential of Ethiopians outside and inside Ethiopia not being put to use because of the democracy deficit. Ato Meles would help Ethiopia more if he becomes an expert of the art of compromise than a political economist.
 Cooper Dury et al. (2006): Corruption Democracy and Economic growth: International Political Science Review (2006), Vol 27, No 2, 121-136.
 Sarbapriya Ray and Ishita Aditya Ray (2011): Regional analysis on the relationship between Economic Growth and Democracy: Evidence from India: Afro Asian Journal of Social Sciences Volume 2, No. 2.3 Quarter III 2011 ISSN 2229 – 5313.