There is a “Democratic Alternative from the South” according to a two-year research project conducted by the Centre for Development and Enterprise in South Africa (CDE) and the Legatum Institute in London. Along with contributions from two partner think tanks in India and Brazil, their findings refute the argument that democracy is a hindrance to faster economic growth and inclusion of the poor.
The project was conceived in response to the 2008 economic crisis, which significantly undermined the appeal of Western democracy in the developing world. While Western powers struggle to overcome political gridlock, the Chinese political establishment, using a mix of market mechanisms and state capitalism continued to deliver high levels of growth, lifting millions out of poverty.
“As a result, it is now far more respectable to advocate authoritarianism in the developing world than it was a decade ago”, says Ann Bernstein, head of South Africa’s Centre for Development and Enterprise. “A global battle of ideas between democratic and authoritarian approaches to growth and development is now playing itself out in countries across the globe.”
The report argues that democracies can take bold decisions in the national interest and that democratic leaders can create powerful coalitions in favour of reform.
Yet these advantages are not well understood, and the progress in India, Brazil and South Africa is often insufficiently acknowledged, both from within these countries and by outsiders. “The global conversation rarely refers to the large and diverse group of democratic market economies beyond the industrialised world,” said Anne Applebaum, Director of the Legatum Institute’s Transitions Forum. “This oversight ignores the achievements of developing country democracies such as India, Brazil and South Africa, to set their countries on a path to prosperity.”
Of course the three countries still have a long way to go in moving large parts of their populations out of poverty and reducing inequality. Their economies are still held back by the high costs of doing business; inflexible labour markets; declining manufacturing sectors; limited infrastructure; poor schooling systems; and national and local governments with limited capacity.
India, Brazil and South Africa are now in a difficult new phase. Economic competitiveness has declined in a tough global environment and new middle classes are protesting about corruption and other governance and delivery failures.
The report encourages policymakers to adopt a second wave of reforms which, says Bernstein, “must include increased transparency and accountability to combat corruption, further market reforms and greater appreciation of the contribution of the private sector, improved state competence and more effective policies to expand opportunities for the poor.”
“Fortunately,” argues Applebaum, “flexible political systems provide democracies with the ability to renew themselves, deal with challenges, and learn from their mistakes.”
Bernstein explains, “The experiences of India, Brazil and South Africa provide compelling evidence that it is not necessary to give up human rights and freedoms in nations struggling with the challenges of poverty. On the contrary, democracy can promote sustained development, higher economic growth and effective routes out of poverty.”
These three countries responded to economic crisis in the 1990s by adopting market-oriented reforms that delivered results. There are grounds for optimism that each country can do it again. And if they do, they will consolidate the emerging democratic alternative for inclusive growth from the South.
Note to Editors:
The report is based on three workshops held in Delhi, Rio and Johannesburg; a dozen research papers and three country reports commissioned from scholars in all three countries; and the contribution of four different think tanks on four continents.
For more information or to arrange an interview with Ann Bernstein or Anne Applebaum, please contact:
Shazia Ejaz, Acting Director of Communications, Legatum Institute
Ph: +44 (0) 207 148 5422 / +44 7501 490 034 / email: firstname.lastname@example.org
Halley Dodge, VennSquared Communications
Ph: 001 202-466-4437 / email: email@example.com
About the Centre for Development and Enterprise
CDE is an independent policy research and advocacy organisation. It is South Africa’s leading development think tank, focusing on critical development issues and their relationship to economic growth and democratic consolidation. Through examining South African realities and international experience, CDE formulates practical policy proposals outlining ways in which South Africa can tackle its most important social and economic challenges. CDE has a special focus on the role of business and markets in development.
About the Legatum Institute
The Legatum Institute (LI) is a non-partisan public policy think tank whose research, publications, and events advance ideas and policies in support of free and prosperous societies around the world.
For more information, please go to www.li.com
About the Legatum Prosperity Index™
The Legatum Prosperity Index™ is a unique global assessment of national prosperity based on both wealth and wellbeing. In its 6th year, the Index assesses 142 countries, representing more than 96% of the world’s population and 99% of the world’s GDP. Using rigorous research and in‐depth analysis, the Index ranks countries based on their performance in eight sub‐indices: Economy; Education; Entrepreneurship & Opportunity; Governance; Health; Personal Freedom; Safety & Security; and Social Capital. For more information please go to www.Prosperity.com