What impact does democracy have on development? This question can be difficult to answer, because it raises the issue of cause and effect. Most of the rich, industrial countries in the world are democracies. But the question is, did being democracies cause these countries to become rich and highly developed? Or did their high development level allow them to be democracies?
The single most important thing about a regime in either helping or hurting economic growth in a country is whether it produces enough stability for people to go about their daily lives in with some amount of security and safety. If this is not provided, economic growth is nearly impossible. The worst situation is a civil war, which usually will probably cause a country to become even poorer than it was before. It is hard to know for certain, because when a country is in a civil war, or a revolution or some other major disorder, we seldom have much information about the economy (Easterly, 2001, p. 65). In the middle of shooting and violence, people do not go around gathering economic statistics. What evidence there is, however, seems to confirm that major disorder is a disaster for economic development
This may happen because different groups are rebelling against the government. Or it may happen because the government is so weak that it cannot control factions or tribes in their battles with each other. Either way the government cannot provide the basic order and security that economic development needs. But how does this relate to democracy?
The answer is that there are two basic ways that the government in a country can make itself strong enough to prevent civil wars or other major disorders. It can rule with an iron fist, jailing or executing anyone who causes disorders. However, this can end up just causing more disorder instead, as people try to rise up against the government. Even if civil wars and other kinds of similar disorder...