Winter 2007

on the economic origins of democracy

K. Daron Acemoglu and James A. Robinson
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Daron Acemoglu, a Fellow of the American Academy since 2006, is Charles Kindleberger Professor of Applied Economics at the Massachusetts Institute of Technology. He is the author of numerous publications, including “Beyond Becker: Training in Imperfect Labor Markets” (1998), “Productivity Differences” (1999), and with James A. Robinson “Economic Origins of Dictatorship and Democracy” (2006).

James A. Robinson is professor of government at Harvard University. With Daron Acemoglu, he coauthored “Economic Origins of Dictatorship and Democracy” (2006). He is also coeditor, with Miguel Urrutia, of the forthcoming “An Economic History of Colombia in the 20th Century.”

Will Iraq, and subsequently the rest of the Middle East, manage to establish and maintain democratic institutions? Many, and not only detractors of the current Republican administration, are skeptical about the prospects of democracy in the Middle East and, perhaps, in many other economically less prosperous parts of the world, such as sub-Saharan Africa. Underlying this skepticism is a theory, widely shared by academics, policymakers, and journalists alike, that democracy can only stand on the foundations laid by a highly educated population and a ‘culture of democracy.’ Democracy, this theory goes, is first and foremost about consensus, compromises, and government by the people. How can a society that has not developed a culture of democracy reach consensus and tolerate dissenting opinion? How can an uneducated population refrain from making choices that will ultimately undermine democracy by empowering groups, such as Islamic fundamentalists, with objectives radically opposed to democracy?

This theory, which can be traced back to Aristotle and was most eloquently formulated by the American sociologist Seymour Martin Lipset in the 1950s, has such wide acceptance that it is now beyond ‘conventional wisdom.’ Yet it is not the only way to view democratic institutions. The alternative recognizes that most collective decisions a society makes under any regime are at least in part about the distribution of resources. Some groups and individuals will benefit, while others will lose out. Democracy is a specific set of institutions for making such collective decisions, distinguished by its relatively egalitarian distribution of political authority. While a dictatorship or a monarchy concentrates collective decision-making power in the hands of a narrow group, democracies give more voice to the majority of the population. This alternative theory then suggests that democracy can flourish in any sort of society as long as the distribution of benefits implied by the democratic process are consistent with the underlying distribution of power. Conversely, it is likely to collapse if such economic and political conditions are not met.

Which of these two theories is a better approach is not simply an academic matter. Whether Iraq, a country where in 2001 almost one-half of adult males and three-quarters of adult females were illiterate, and other economically less-developed nations experimenting with democratic institutions, will ultimately succeed is linked to which theory has more truth. It is also important that our advice and support to these young democracies come from the correct theory. While the accepted theory claims that democracy will remain no more than a dream in Iraq until the Kurds and Shiites develop a culture of democracy and the educational level of the Iraqi people rises sufficiently, the alternative maintains that instead these groups need to get enough out of democracy that they have no incentive to undermine it or secede.

Fortunately for the citizens of Iraq, the evidence is much more consistent with the alternative theory than the widely accepted one. Over the last century, there has been no tendency for countries that have become richer or more educated to become more democratic. Moreover, there are numerous historical examples of successful democratic societies starting with very low levels of education and no trace of a culture of democracy.

Perhaps the most telling example is from the United States, where the origins of democracy stem not from the legacy of the Mayflower and Bible-reading Puritans, but rather from the political struggles of early settlers in Virginia, Maryland, and Pennsylvania. These settlers were mostly illiterate indentured laborers, certainly far less educated than the Spanish conquistadors of Mexico and Peru. Though largely uneducated, the settlers of Virginia valued and demanded representative institutions that would enable them to influence the types of societies in which they lived. The first formal democratic institution granted to the settlers was the Representative Assembly conceded by the Virginia Company in 1619, which effectively enfranchised all white adult males. This concession was a desperate attempt to give the settlers a stake in their fledgling society, mainly to convince them not to walk away from their indentured labor contracts and obligations.

Similarly, the much-delayed democratization of Latin America has little to do with the relatively low levels of education or an absence of a democratic tradition. In fact, during the colonial period in Mexico, for example, the mayors of Indians towns were elected, a practice which the Spaniards adapted from the Aztecs. Though initially only descendants of the Aztec or Indian aristocracy could vote, the institution evolved into a vibrant and participatory one, often with all adult males taking part. Despite this democratic culture, democracy did not emerge in nineteenth-century Mexico, and though it finally did in the twentieth century, it has been marred by corruption and political instability, largely resulting from the unequal distribution of wealth and the ability of the elites to capture the political system via their control of the main political party, the PRI. Democracy arrived so late in Mexico not because it was infeasible, but because it would have diluted the political control of elites.

While the origins of democracy in North and South America show that the link between the ‘culture of democracy’ and democracy itself is at best tenuous, the most telling example is probably that of Botswana, the most successful democracy and economy in sub-Saharan Africa. When the British granted independence to this colony in 1965, which they had acquired largely as a buffer between South Africa and German Southwest Africa (Namibia), they left little of value: there were twelve kilometers of paved road, twenty-two Botswanans who had graduated from college, and only one hundred who had finished secondary school! But Botswana was fortunate to have avoided the most adverse effects of colonialism, and under the leadership of Seretse Khama and then Quett Masire, it built and maintained democratic institutions, and used the revenues from diamonds both equitably and wisely. Botswana’s democracy has not only endured and flourished, but has not even been challenged by a coup or tarnished by major electoral fraud during the past forty years.

These examples and many others show that it is indeed possible for a society to be uneducated and democratic, and they suggest that the elusive notion of the ‘culture of democracy’ is as likely to be the outcome of successful democratic institutions as their cause. The main threat to Iraqi democracy is therefore not the low educational attainment of its population or its lack of a ‘culture of democracy,’ but the high degree of polarization along ethnic and religious lines and the difficulty of engendering a system that gives enough voice to various groups and redistributes the society’s resources fairly.

Not an easy recipe, but certainly more hopeful than asking for a change in ‘culture.’