Democracy in trouble? Blame the economy.

Democracy and prosperity go together. When economies go backwards, authoritarians flourish.

In 1945, when the slaughter had finally stopped and fascism was beaten, democracy became fashionable as never before. In just over fifty years from then, the number of nations that could be plausibly described as democratic rose from under one in ten to better that one in two. Democracy was so fashionable that even brutal authoritarians felt the need to pretend, holding elections and putting the term into their names while retaining the systematic repression of their peoples. And so we have the People’s Republic of China, the Democratic Republic of (North) Korea, Vietnam, the Congo.

But has the trend toward openness and personal freedom now gone into reverse?

The decline in democracy, and the corresponding rise in autocracy, coincided precisely with the Global Financial Crisis of 2007-10. That upheaval has turned out to be even more profound than most of us had thought – though not as profound, fortunately, as the upheaval following the Great Depression.

The western world’s sense of security and ever-improving prosperity wilted. The welfare state was long gone. Parents no longer believed their children would have a better life than they did. Throughout the half-century of the neoliberal era, employment became less secure and personal finances became less assured. Globalisation shifted jobs and wealth from western nations to the emerging economies of east and south-east Asia. As China lifted millions of its people out of the worst poverty, huge regions of rich nations turned from vibrant hubs of manufacturing into rust belts. Faith that democratic government could deliver a decent life became harder to maintain.

At the bottom of it all was economics. Economic growth and democracy tend to go together.

This idea formed the basis of Modernisation Theory, one of the most persistent and contested notions in political science. It suggests that as a society develops economically, other changes occur simultaneously. Industrialised countries require educated workers who can not only think for themselves but who also have the power to demand a fairer share of national wealth and a greater say in the way they are governed. Democracy is the logical consequence.

Ever since the 1950s, modernisation theory has gone in and out of fashion. By the 1970s, although democratisation continued apace, economic stagflation and the subsequent crushing of inflation by punishingly high interest rates, coincided with a crisis of confidence in democracy and the end of post-war prosperity. The simple formula of modernisation theory now seemed too simplistic to explain the world as it had become.

For decades, the idea hibernated but did not die. It still made sense, but with a twist: economic security was a pre-requisite for democratisation but was not the only factor. Other things were going on. So, by the beginning of this century, modernisation gained followers again.

You only have to look at the evidence to see why. First, here’s where democracy exists – and where it doesn’t.

It’s almost entirely in the rich world, with a few recent backsliders. The United States is now classified by the Economist Intelligence Unit (and by other researchers) as a flawed democracy. In Asia and in Africa, where most people live, authoritarians rule. Less than 10% of the world’s population are in liberal democracies.

The body of empirical evidence linking development and democracy is too large to ignore, but far more than simple growth in GDP per capita is involved. If that was the case, the oil-rich Middle East would be packed with liberal democracies rather than theocratic autocracies. The nature of that GDP growth, and the sort of society it creates, are what matters. For instance, the more economically advanced a country becomes, the more it depends on a sophisticated and diverse knowledge society. Human capital becomes increasingly dominant. With the obvious current exception of Russia, high levels of education fit neatly with democratic government.

Economies cannot function productively except under the predictable rule of law. Without an adequate body of corporate law, properly administered, investment in fixed and human capital is stunted or absent altogether. Without a social system that ensures personal security and protects property, people lack the confidence and sense of safety upon which democracy depends.

A related measure is the level of corruption. In most parts of the world, bribery is a way of life. It can be difficult to get anything done without paying baksheesh. In poor countries, bribes may be a person’s only significant source of income but, when paying a bribe can routinely determine the decisions made by officials and politicians, the law and government administration can no longer work as they should. Public money is shifted from services to help the poor into the pockets of the already wealthy. Resource allocation is distorted and trust in government plummets.

A research paper from the International Monetary Fund found that an increase of 0.78% in a corruption index reduces the income growth of the poor by 7.8% a year. Another study found that an increase of 1% in the corruption level reduces GDP growth by about 0.72%, and that “the effect of corruption on economic growth is especially pronounced in autocracies and transmits to growth by decreasing foreign investment and increasing inflation.”

What sort of society?

The nature of a society is also an important determinate of democratic development. Countries with more traditional values often continue to support historical forms of government in which power is concentrated within an elite class. Adherence to religion is a measure of this, though an imperfect one. Communist and former communist countries tend to maintain low religious observance with highly authoritarian governance. Nevertheless, the decline of religion and the rise of democracy have tended to go together.

Throughout the western world, religious affiliation has been in decline for at least half a century. It happens in stages: first, with people going to church less often but retaining nominal adherence before finally acknowledging in census and other surveys that they no longer believe. The phenomenon affects Christianity far more than other major religions.

This second stage – owning up – explains why survey numbers have more recently accelerated. In North America and Europe, the headquarters of liberal democracy, the shift from stated Christian belief to non-affiliation in just a decade is remarkable. The figures for Europe understate the trend because of a religious resurgence in former Soviet satellite states.

Democratisation is also largely dependent on a tolerant and inclusive society. The basic requirements of democracy – non-violent resolution of differences, peaceful transfer of power after elections, and respect for opinions different from one’s own – depend on a general mindset of trust and cooperation. Polarisation in the United States is one likely reason for that nation’s recent democratic decline.

A good measure of a country’s openness and tolerance can be found in the way it treats its homosexual citizens. If gay people have equal rights, there’s a good chance all others will too.

How secure are the autocrats?

Autocrats use a wide range of methods to secure their positions. None, though, are entirely immune from the forces which promote social and political freedoms – most potently, economic growth and education.

Autocrats typically come into power with popular support. But no government remains popular forever, so they must devise ways of retaining supremacy when the population’s consent to be governed has vanished. When charm fails, fear is the only alternative.

The dictator’s playbook involves the simultaneous use of seduction and violence. Media is controlled, dissident voices silenced, outside influences demonised, and information is replaced by half-truths and outright lies. At the same time, praetorian guards are assembled to ensure the regime’s survival at the point of a gun. Praetorian guards can be difficult, as many Roman emperors found to their cost, so deploying two or more competing guard corps is a good ploy for autocratic survival.

But not all autocrats can do that. Those who cannot are vulnerable, a lesson being learnt by those in the former Soviet satellite republics of eastern Europe such as Hungary and Poland. Membership of the European Union prevents the wholesale destruction of electoral systems and although electoral rules can be bent to favour an incumbent, they cannot be abandoned altogether.

Eastern Europe is suspended between two magnetic poles: the EU and Russia. The populations are heavily polarised but the advantages of joining western Europe’s economy – and the pots of EU subsidies – tend to outweigh the allure of Vladimir Putin. And so Putinesque acolytes such as Lukashenka in Belarus, Duda in Poland, Orbán in Hungary and Kobakhidze in Georgia become highly vulnerable.

In Bangladesh, a heavy price of freedom

As democrats in the west worry about far-right populist insurgent, the picture in the world of autocrats is becoming slowly but increasingly hopeful. Even brutal dictators are becoming susceptible to the will of their repressed populations. Sheik Hasina, who ran Bangladesh with mounting brutality for 15 years, was toppled by a student-led uprising. Her security  forces, which incorporated the murderous Rapid Action Battalion police unit, lost. The price was heavy: 400 protesters dead, 200 blinded and another 20,000 injured. Eventually Hasina fled abroad and has since been sentenced to death in absentia.

In Sri Lanka, the powerful and corrupt Rajapaksa dynasty was forced out. In Brazil, Jair Bolsonaro was voted out and is now serving 27 years in prison for an attempted coup. In South Korea, an attempted coup by the president, Yoon Suk Yeol, was crushed. He is now in gaol serving a life sentence.

The United States, which has not won a significant war since 1945, has still not learnt that democracy cannot be imposed at the point of a gun. It has to come from within.

Democracy is, and always has been, fragile. Unfortunately, Thomas Jefferson’s maxim has too often been proved true: “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”