Democracy and Prosperity

Also in the WSJ, Mary Anastasia O'Grady has a provocative analysis of the relation between democratization and economic prosperity.

The key graf:

Countries that liberalize quickly and thoroughly achieve resounding successes, politically and economically. Conversely, gradualism risks stagnation and even reversals, because the benefits are not evident enough to impress the electorate and generate a momentum in their favor.

Read it here.

So what counts, then, is not whether you democratize, but how you democratize, and how quickly.

This matters the most in democracies, where leadership needs to produce results if liberalization is to stick. Clearly, it's not the absolute income level that generates support for reforms but the growth in living standards that seems to hold the key. Halfhearted measures generate immense resentment from the "losers" of the old system but often don't yield large enough gains to create a constituency to support the changes.

Ms. O'Grady argues that this dynamic explains a lot of the resistance to free market reforms in places like Latin America. It's an interesting proposition, one to think about.