Over the past 15 years, economies ruled by dictators have grown two and ahalf times as fast as the economies of democratic countries, according to amuch-discussed article posted on American.com, an online “magazine ofideas,” as it calls itself. If this claim is true, should people living inthe grip of despotism therefore ditch their aspirations for politicalfreedom? Not according to Independent Institute Senior Fellow Alvaro VargasLlosa. Rapid economic growth under dictatorship, he argues in his latestsyndicated column, does not provide an economic justification ofdictatorship. In addition, reports of fast growth under dictatorshiptypically paint a distorted picture of the underlying realities. “Any political system, free or unfree, that removes some obstacles toentrepreneurship, investment and trade, and makes a credible commitment tosafeguard property rights to a certain extent will trigger a virtuouseconomic cycle,” Vargas Llosa writes. However, removing anti-growthobstacles can at most create a short-term economic growth spurt; long-termgrowth requires strong pro-growth institutions—such as secure propertyrights, incentives to save and invest, and a culture of entrepreneurship—notedicts issued from on high. “First, history indicates that the combination of political, civil andeconomic freedom is a better guarantee of ever-increasing prosperity than acapitalist dictatorship,” Vargas Llosa continues. “Second, there aresufficient examples—Portugal or the Baltic countries—of underdevelopedcountries that have generated stable and reliable environments throughpolitical freedom to invalidate the notion that a country should be kept inpolitical and civil infancy until it reaches economic maturity.”
<http://www.independent.org/newsroom/article.asp?id=1984> “AreDictatorships More Successful Than Democracies?” by Alvaro Vargas Llosa(6/13/07) Spanish<http://www.elindependent.org/articulos/article.asp?id=1984> Translation
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Interesting indeed! History is strewn with examples of economies that had sudden bouts of high growth rates as soon as dictators took over, be it communist Russia under Stalin, Germany under Hitler, or Iraq under Saddam Hussein during the 1970s..arguments of course being inter alia that the system becomes efficient when the decision making mechanism is reduced to literarlly one person as compared to a parliament of 543 MPs. Hitler makes a similar observation in Mein Kampf where he talks about the situation in Austria during the 1900s with the power being with some 500 odd MPs, most of them aged and absentees when discussion on important issues was being held.
But the trade-off is quite a lot in terms of the civil liberties that the people are refused. The human rights' track record of most countries with dictatorships is dismal. Also the growth is not sustained over a long period of time, since it is more leader-specific than anything else.
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