capitalism

120 Development, Economic
founders envisioned the Electoral College as a selection
committee to choose the president, insulating the selection
of the president from direct input from the citizens. The
process never worked quite as they intended, and it evolved
into a more democratic one by the 1830s, in which citizens
nominally voted for the president. Similarly, the Constitution
originally provided for Senators to be chosen by their
state legislatures, and this process was altered only in 1913
when the 17th Amendment mandated their direct election.
Yet as the government was originally designed, only members
of the House of Representatives were to be directly
accountable to the citizens. If each of the three branches of
government were given equal weight, as would be required
if a system of checks and balances were to work, then the
government would only be one-sixth democratic, with only
half of the legislative branch of government subject to
direct popular control. However, with the popular election
of the president and Senators, it is now two-thirds democratic.
The U.S. government is much more democratic and
its leaders are much more immediately accountable to its
citizens than when the nation was founded.
The 20th century was characterized by a deep ideological
divide between oppressive communist dictatorships led
by the Soviet Union and freer capitalist democracies, the
most prominent of which was the United States. This war
of ideologies led many people to equate democracy with
freedom. Yet democracies have the potential to be as tyrannical
as dictatorships, and the road to freedom is not to
move from dictatorship to democracy, but from bigger to
smaller government. Although democracies tend to be freer
than dictatorships, democracy and freedom are by no
means the same thing, and more democracy does not necessarily
bring more freedom with it.
RGH
See also Buchanan, James M.; Condorcet, Marquis de; Constitution,
U.S.; Public Choice Economics; Tocqueville, Alexis de
Further Readings
Arrow, Kenneth J. Social Choice and Individual Values. New Haven,
CT: Yale University Press, 1951.
Black, Duncan. The Theory of Committees and Elections.
Cambridge: Cambridge University Press, 1958.
Buchanan, James M., and Gordon Tullock. The Calculus of Consent.
Ann Arbor: University of Michigan Press, 1962.
Bueno de Mesquita, Bruce, Alastair Smith, Randolph M. Siverson,
and James D. Morrow. The Logic of Political Survival.
Cambridge, MA: MIT Press, 2003.
Downs, Anthony. An Economic Theory of Democracy. New York:
Harper & Row, 1957.
Hamilton, Alexander, John Jay, and James Madison. The Federalist.
Washington, DC: National Home Library, 1937.
Holcombe, Randall G. From Liberty to Democracy: The
Transformation of American Government. Ann Arbor: University
of Michigan Press, 2002.
Hoppe, Hans-Hermann. Democracy, the God That Failed. New
Brunswick, NJ: Transaction, 2001.
Olson, Mancur. The Rise and Decline of Nations. New Haven, CT:
Yale University Press, 1982.
Tocqueville, Alexis de. Democracy in America. New York: Knopf,
1963 [1835].
DEVELOPMENT, ECONOMIC
Economic progress is a modern phenomenon. For most of
human history, growth was stagnant or low, calculated on a
per-person basis. Mass poverty was the norm. According to
the World Bank, in 1820, about 75% of the world’s population
lived on the equivalent of $1 a day or less. Today, that
figure is about 15% according to the bank and even less
according to leading independent economists.
The modern era of economic growth that began in
Western Europe in the mid-18th century and that has since
spread unevenly around the world has produced a diverse
record of economic development. Western Europe, its offshoots,
and Japan have experienced sustained increases in
wealth; poorer countries have gone through erratic growth
cycles; some have seen declines in income or have merely
stagnated; and at least one country—Argentina—went from
developed country status in the early 20th century to developing
country status. In recent decades, a minority of poor
countries have enjoyed economic success by achieving and
sustaining high growth.
The varying growth paths, including the West’s initial
escape from poverty, have prompted a diversity of explanations
about what causes prosperity. As far back as 1755,
Adam Smith cited the importance of policies and institutions
as key determinants of economic progress, factors he
would highlight later in his monumental work, An Inquiry
into the Nature and Causes of the Wealth of Nations. “Little
else,” he wrote, “is requisite to carry a state to the highest
degree of opulence from the lowest barbarism, but peace,
easy taxes, and a tolerable administration of justice; all the
rest being brought about by the natural course of things.”
Smith focused mainly on Europe and the Western world,
as did other classical economists. It was not until the closing
years of World War II and the postwar era that a strong
interest arose among economists and policymakers in the
development of what came to be known as the Third World.
It was during this period that the field of development economics,
a subfield of economics, was born. The promotion
of economic development as a policy objective of rich
countries became institutionalized through various foreign
aid programs.
The early development economists were influenced by
the experience of the Great Depression, which they interpreted
as a failure of the free market, and by Keynesian