Is autocracy bad for growth?

Gordon Tullock frequently tells me there is no good economic argument for democracy, if we adjust properly for economic variables such as the absolute state of development.  After all, much of the European miracle occurred under non-democratic conditions, not to mention the golden ages of China or modern Singapore.  But now Kevin Grier and Mike Munger argue from the empirics that democracy is better for economic growth.  In particular:

New dictatorships grow very slowly, and very old dictatorships grow very slowly. But durable dictatorships in the middle years actually grow nearly as fast as democracies. A nonlinear specification fits almost exactly.

It is a tricky question which economic models of autocracy this is consistent with (try your hand at this in the comments).  Here is part of the paper’s abstract:

In this paper we study a large unbalanced annual panel of 134 countries covering the period 1950 – 2003. We show that autocracies grow almost one percentage point slower than non-autocracies, holding constant the effect of regime length on growth…

I usually tell Gordon that the costs of keeping out democracy are prohibitive for most contemporary societies; that alone should tip the balance in favor of democracy.  Sources of economic power and sources of political power have to stand in some sort of equilibrium relationship if stability is to persist.  Singapore is an exception because it is a) very small, b) disciplined by world markets to an extreme degree, and c) its citizens realize that its "democracy" would otherwise collapse into identity politics of the three major ethnic groups; they therefore do not demand so much democracy.

Gordon never agrees.  Here is the paper and further discussion.  More importantly, here is Kevin on stereo equipment and tubes.

Comments

Since dictatorships also control the publication of economic statistics, how comfortable are you that the economic growth of these countries are not overstated?

I didn't see any mention in the paper of empirical evidence whether NEW democracies have fast growth or not. Just one sentence that says that in theory they should.

Why doesn't an adapted version of Mancur Olsen's model work here? A secure dictator has something of an encompassing interest in promoting economic growth, so middle-aged autocracies will have decent growth; later autocracies are not secure by definition and early autocracies are still largely concerned with securing the regime and establishing the rule of law in the first place.

I hold you blog in great esteem and was therefore suprised that you carelessly use the same argument put forward by the PAP (Singapore's ruling party) of why democracy won't work there. Singaporeans (at least all I have met) are as mature people as any American and would stand the same chances of being a harmonious democratic society.
There is a difference between what citizens "realize" and being subject to scare-mongering by their government (and the occasional international blogger)

Today, as in recent decades, Kleptocracies are economically marginalizing the majority throughout
Latin America, Africa, former members of the Soviet bloc and on and on. Wake-up to reality - read
the work of African intellectuals on "capital flight" searches or that of the Free Africa Foundation.
See http:foreigndebtforgiveness.com

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