From Poverty to Power Green, Oxfam 2008 - weman

FROM POVERTY TO POWERWhere flawed democracies allow a majority to dominate and excludea minority, they can also aggravate inequality.Amartya Sen famously established that no famine has ever occurredin a functioning democracy, but any deeper link between democracyand economic well-being is much more disputed. The decades ofdemocratisation have not produced a growth rebound – quite thecontrary. In many regions, new democracies proved unexpectedlywilling to introduce harsh structural adjustment measures that hurtboth growth and equity. 108 The economies of democracies in LatinAmerica and Africa have stagnated, while China,Viet Nam, Indonesia,and South Korea have taken off economically under authoritariangovernments.Because democracies require an element of consent – defeatedcandidates must accept their defeat – it can be more difficultfor democratic governments to pursue radical change, such as redistributionthrough land reform, even where it is required to triggereconomic take-off (as in Taiwan and South Korea). By the same token, ademocratic regime is less likely to get away with the sort of radicallyanti-poor reforms that were implemented by the Pinochet dictatorshipin Chile, when opponents such as trade unionists were killed,jailed, or exiled as part of its free market overhaul of the economy.That very inertia can be a blessing: one study found that althoughdemocracies have grown more slowly in economic terms than somenon-democratic countries, they have grown more steadily over longperiods, avoiding the booms and busts that invariably hit the poorhardest and ratchet up inequality. 109Economist Ha-Joon Chang believes that ‘market and democracyclash at a fundamental level. Democracy runs on the principle of“one man (one person), one vote”. The market runs on the principle of“one dollar, one vote”’. Chang points out that ‘most nineteenth centuryliberals opposed democracy because they thought it was not compatiblewith a free market. 110 They argued that democracy would allow thepoor majority to introduce policies that would exploit the rich minority(e.g. a progressive income tax, nationalisation of private property),thus destroying the incentive for wealth creation’. 111Perhaps he exaggerates (many liberals believe that the independenceand security given by a market and property are needed to make82