In a new book, Haakon Gjerløw, Carl Henrik Knutsen, Tore Wig and Matthew C. Wilson challenge conventional wisdom. Building state institutions before democratisation does not help long-term economic development, after all
Did the withdrawal of NATO from Afghanistan signal the failure of one of the most radical ideas to grip the policymaking community – that democracy can be introduced in fragile states? This idea has met with fierce criticism, especially since the invasions of Afghanistan and Iraq. Democracy, such critics say, cannot thrive nor bring economic development without a powerful and capable state administration already present.
Indeed, this view has long been popular among social scientists. In The Origins of Political Order, Francis Fukuyama offers an overarching theory on the underpinnings of stable states. He discusses how state building prior to democratisation engenders both political and economic development. On the other hand, premature democratisation in weak states, he argues, impedes development and leads to several other adverse outcomes.
The 'state first' argument: that a weak state will fail to constrain would-be corrupt democratic politicians
This is one variant of what we might call a 'state first' argument. According to this argument, democratising before building strong state institutions presumably leaves democratic politicians unconstrained. They then can use this opportunity to gather resources for themselves and their followers. This, in turn, explains why young democracies are plagued by corruption and clientelism and fail to develop economically. In contrast, when states develop a capable, effective bureaucracy prior to democratisation, they diminish opportunities for rent-seeking and predatory behaviour, and promote economic development.
Fukuyama calls this beneficial sequence 'the road to Denmark', a metaphor for a rich, stable, and democratic country. The actual country of Denmark, indeed, followed this road; it built state institutions before democratising, and then became wealthier. But we are sceptical of the broader argument.
In our new short book with Cambridge University Press, we criticise and challenge the state first argument. We detail how the argument builds on several strong assumptions and relies on limited and problematic evidence such as less relevant comparisons between very dissimilar countries. In general, the sequence of state building and democratisation may not matter all that much for economic development. Specifically, we propose that democratising before building strong state institutions does not harm economic growth.
The state first argument builds on several strong assumptions and relies on limited and problematic evidence
We test several implications of the state first argument. Our assessment does not focus on a particular case such as Afghanistan or Denmark. Instead, we draw on extensive data on democracy and state capacity from 1789–2019 for countries across the world. We compare countries that democratised under conditions of weak and strong state institutions. We also compare the economic growth of democracies and autocracies in weak states. Despite its strong appeal, we find little support for the state first argument.
Alongside this, we study the historical sequences of institutional development in more than 180 countries, and categorise them into those that followed 'state first', 'democracy first', and other paths. We do not find that experiencing state-building prior to democratisation enhances economic development. In general, the historical sequence of institution building does not seem to matter much for growth.
There are likely many reasons for our findings. Firstly, consider 'bad' rulers who follow destructive economic policies. If rule-following and capable bureaucracies do not constrain such rulers, critical electorates in democracies may rein them in. Thus, democracy may have particularly beneficial effects where it is most needed: in weak states. Proponents of the state first view may thus underappreciate the negative (economic and other) consequences of keeping autocratic regimes in power in weak states.
Proponents of state first arguments may also exaggerate how likely autocrats are, in the first place, to build state institutions voluntarily. Indeed, in the few cases where autocrats do build functioning states, such as China, they are very reluctant to give up power willingly and democratise. The risk of being stuck with an autocratic regime for a long time is high.
In the few cases where autocrats actually do build functioning states, they are very reluctant to give up power willingly and democratise
While building the state first might yield benefits in other areas, our research does not support the notion that postponing democratisation enhances economic development. We find no clear trade-off between 'freedom' and 'bread', even in countries with weak state institutions. Postponing democratisation until state institutions are built, it seems, is a bad proposal.
Hence, our findings could give some comfort to opposition movements and organisations currently struggling to promote democracy in countries with weak states. The path to the proverbial 'Denmark' need not be the same as the one followed by the actual country.