Democracy and economic growth

While evidence of a relationship is irrefutable,[1] economists' and historians' opinions of its exact nature have been sharply split, hence the latter has been the subject of many debates and studies.

With the introduction of markets, specialization and reforms like having trial by jury, civil liberties as well as free speech, they were able to sustain a self-sufficient city at the public expense.

Granted a lot of their success was due to their unbeatable production of iron as well as the development of trade routes i.e. Pax Romana.

Despite their accomplishments from the reformed political structure, the need to invest in the military to keep their growing competition at bay, by producing less and less valuable coins, ultimately led to their collapse, recessing back to the country side and barter system.

[5] The period of the transition from mercantilism to liberalism in England with expansion of international trade shows the requirement of the needed change in political institutions and policies for further development.

[6] Even so, while cases like Brazil, India and Mauritius have had several important economic achievements in their late-democratic period, it is not safe to imply that these countries are exemplary.

[citation needed] Democratization of a country from a non-democratic regime is usually preceded by a fall in GDP, and a volatile but expected growth in the long run.

[8] The cause of such behavior is that non-democratic regimes, mainly authoritarian ones, are more effective at implementing decisive policies and choices as well as solving ethnic and sub-national conflicts, but are unsustainable in the long run as there is more incentive to extract money from society which in turn leads to less prosperity.

[9] The positive changes of democracy to economic growth such as delegation of authority and regulations of social conflicts heavily outweigh the negative and restrictive effects, especially when compared to autocracy.

The processes in associations with peace, social stability and rapid socioeconomic development are not yet fully understood, which may be the reason for a widespread opinion and many hypotheses.

Poor democracies such as the Baltic countries, Botswana, Costa Rica, Ghana, and Senegal have grown more rapidly than nondemocracies such as Angola, Syria, Uzbekistan, and Zimbabwe.

This correlation is true in all 7 African who became new democracies after 2000 or were approaching an election following previous electoral performance combined with an economic recession.

[15] Some autocracies disappear in the midst of an economic crises, while other after a long period of prosperity, some after the founding dictator dies or some as a result of defeat in foreign wars.

In other words, a country that undergoes democratization does not have to necessarily experience economic growth, most often measured in income per capita, or vice versa.

[17] The conditions for their origins may be hard to determine, but the factors on which its survival depends are easily identifiable, and are tightly connected to economic growth, that is the level of development measured as per capita income.

[19] And while the increase in GDP may be the primary method of measurement, there is much more, such as forming or greatly changing productive relationships, migrating firms and workers to cities up to affecting human capital and technology.

[citation needed] And as measured in the past by the frequency of strikes, demonstrations, riots, it is much greater in democracies, and a lot less likely in e.g. dictatorships.

Under dictatorships, whenever the regime is threatened, or there are expected changes, workers or masses of people assemble to strike and protest against their opposition, that is the government, and the economy suffers.

but we can't miss addressing that major instability on involving dramatical political changes can be harmful for economic growth.

[23] There are several once very impoverished countries that have experienced significant and rapid economic growth without democratic institutions, for example Chile, Hong Kong, Taiwan, Singapore and South Korea.

A different case can be shown with India, where economic prosperity was jeopardized due to people forming interest groups and losing their political freedom.