Democracy, dictatorships and economic growth

Blogger by proxy Anna sent me this link to an intesting article on Democracy and Economic Development:

"Political regimes have no impact on the growth of total income when countries are observed
across the entire spectrum of conditions. Contrary to widespread concerns, democracies do
not reduce the rate of investment even in poor countries. It appears that when countries are
poor there is little governments can do, so that it makes little difference for economic
growth whether rulers are elected or hold power by force. In wealthier countries, patterns of
growth are no longer the same. Dictatorships rely on the growth of labor force and on
keeping wages low, while democracies pay higher wages, use labor more effectively, and
benefit more from technical progress. But while growth under wealthier dictatorships is
more labor-extensive and labor-exploitative than under wealthier democracies, so that
functional distributions of income are different, the average rates of growth of total income
are about the same.

Thus, we did not find a shred of evidence that democracy need be sacrificed on the altar of
development. The few countries that developed spectacularly during the past fifty yearswere as likely to achieve this feat under democracy as under dictatorship. On the average, total incomes grew at almost identical rates under the two regimes. Moreover, per capita incomes grow faster in democracies. The reason is that democracies have lower rates of population growth. In spite of rapid diffusion of medical advances, death rates remain
somewhat higher under dictatorship and life expectancies are much shorter. Population
grows faster under dictatorships because they have higher birth rates, and the difference in
birth rates is due to higher fertility, not to age structures of the population."

And she had the following comment:

"it says that all economies with a per capita income of $6,000 or more succeeded in transitioning to democracy. according to the cia factbook, lebanon is at $5,500.
there's a lot of funny math in there that you professor types might understand, but this paragraph from the conclusion is striking:

"No democracy ever, including the period before World War II, fell in a country with a
per capita income higher than that of Argentina in 1975, $6,055. This is a startling fact,
given that since 1946 alone forty-seven democracies collapsed in poorer countries. In
contrast, thirty-five democracies spent 1046 years in wealthier countries and not one died. Affluent democracies survived wars, riots, scandals, economic and governmental crises, hell or high water."

so maybe this bodes well for lebanon...sort of."

I copied in bold the bit I thought to be most striking: no need for dictatorship to achieve economic growth, democracy would do. But you can also read it the other way around. I also found it perceptive that the author noticed that people in dictatorships are less happy and die earlier. Democratized Iraq is a striking example.