TCS Daily

Does Growth Lead to Liberalization?

By Gregory Scoblete - October 17, 2005 12:00 AM

In a September 21 speech to the National Committee on U.S.-China Relations, Deputy Secretary of State Robert Zoellick advanced the well rehearsed theory that as China's economy grows, its newly enriched citizens will begin to demand political freedom commensurate with their economic gains. "Closed politics," Zoellick said, "cannot be a permanent feature of Chinese society. It is simply not sustainable -- as economic growth continues, better-off Chinese will want a greater say in their future and pressure builds for political reform."

Fourteen years after the collapse of the Soviet Union and the advance of democracy in Eastern Europe and Asia, Zoellick may have felt a liberalizing wind at his back, but is he correct? Is the nearly iron-clad conventional wisdom that economic expansion must perforce result in political liberalization accurate? There's reason to doubt it. Indeed, some observers believe that autocracies have discovered a way to make an end-run around the political pressures generated by economic liberalization, creating a stable, sustainable political model -- call it "market autocracy" -- that fuses authoritarian political control with liberal, growth-oriented economic policies.

In the September/October issue of Foreign Affairs, Bruce Bueno de Mesquita and George W. Downs argue that in fact authoritarian countries like China have become quite adept at making this fusion by co-opting and neutralizing what they term "coordination goods" -- technologies and institutions that would help individuals organize politically to undermine the ruling regime. The authors write:

        Threading this needle is difficult, but not, as it turns out, impossible. 
        Gradually, through trial and error, oppressive regimes have discovered 
        that they can suppress opposition activity without totally undermining 
        economic growth by carefully rationing a particular subset of public 
        goods -- goods that are critical to political coordination but less important 
        for economic cooperation. By restricting these goods, autocrats have 
        insulated themselves from the political liberalization that economic 
        growth promotes.

De Mesquita and Downs identify Chinese control over Internet keywords and e-mail, Russia's increasingly vice-like grip on the media, and Vietnam's control over religious organizations as evidence that certain arrows in civil society's quiver can be successfully blunted without dulling the overall economy. From this the authors somberly conclude that "promoting economic growth in the developing world is not nearly as effective a way to promote once believed."

Indeed, for the past twenty years China's economy has grown remarkably and the "Communist" in Chinese Communist Party is, from an economic policy standpoint at least, a stale anachronism. Yet the party's rule is uncontested. It has maintained a vice grip on political participation through methods both ancient and novel. Its assiduous Internet censorship is coupled to a ruthless brutality that is both dramatic -- as in Tiananmen Square -- and mundane, as the routine depredations inflicted on the Falun Gong and members of underground Christian sects, attests.

And it's not just China. A quick tour of present-day autocracies shows that many have endured years, even decades, of sustained economic expansion without succumbing to political liberalism. Consider Southeast Asia, often hailed as an exemplar of political and economic progress. Burma (Myanmar) has seen per capita GDP rise briskly through the 1990s yet is still in the grip of a military dictatorship that successfully overturned a democratic election in 1990 and has ruled uncontested since. Laos ranked 12th among nations by GDP growth through the 1990s yet is still ranked "not free" by the non-partisan NGO Freedom House.

And on: Algeria, Pakistan, Cambodia have all racked up years of economic growth while keeping a firm lid on political participation.

To be sure, many of the countries that have recorded economic growth over the past two decades are not openly capitalist but exercise centralized control over many sectors of their economy. And growth is relative: it's easy to rack up eyebrow raising figures when the baseline is low, as it typically is in autocracies. Nevertheless, many autocratic countries have survived steady economic improvements while beating back efforts at political reform.

Which brings us back to Zoellick: is his optimism in the inevitability of Chinese liberalization misplaced? Are market autocracies a durable fixture on the international scene? It's not an academic question. Determining just how viable a construct market autocracy is will set the course of U.S. foreign policy for years to come. If, for instance, we believe China can sustain its political oppression indefinitely, then America's outlook toward the country's prodigious military build-up will likely harden. If the Communist Party's legitimacy is threatened internally, it will be more inclined to redirect public emotion toward nationalistic or militaristic goals and away from domestic reforms. On the other hand, if Zoellick is right and the poison pill will inevitably work its magic, the U.S. can take a more relaxed attitude toward China's rise, confident that its authoritarian edifice will crumble and follow the Soviet Union into the ash-heap of history.

There is one final element in our calculus that may guide the U.S. vis-à-vis the longevity and potential danger of market autocracy, and that is ideology. It's important to note that unlike fascism and communism, whose adherents sought to actively expand their sphere of influence through conquest or subversion, market autocracies are mostly inward looking. They may be dangerous, but their danger is largely circumscribed. With the exception of state sponsors of terrorism, the ills of autocracy are usually visited on their own citizens or immediate neighbors. Given America's global responsibilities, these localized ills will often merit our involvement, but the mere existence of a market autocracy rarely poses a fundamental or existential challenge to the U.S.-led world order.

The Chinese example, as Zoellick noted, is illustrative:

        China, he said "does not seek to spread radical, anti-American ideologies. 
        While not yet democratic, it does not see itself in a twilight conflict 
        against democracy around the globe. While at times mercantilist, it does 
        not see itself in a death struggle with capitalism. And most importantly, 
        China does not believe that its future depends on overturning the fundamental 
        order of the international system. In fact, quite the reverse: Chinese 
        leaders have decided that their success depends on being networked 
        with the modern world."

China may indeed be a threat to the U.S., but the parameters of the challenge are (as of today) localized and territorial, not global and ideological like radical Islam.

As an abstract statement of political trajectory, Zoellick's optimism will likely be vindicated. Over time, "internal contradictions" have undermined political frameworks, as the Soviet Union discovered to its chagrin in 1991. South Korea's emergence from military dictatorship to democratic government is a more specific reminder that a growing economy coupled with an educated-yet-disenfranchised middle class is a potent danger to autocratic regimes. Such a danger is brewing in Iran currently.

But the Soviet example is illustrative in two other manners: democracies do not always rise Phoenix-like from the ashes of the old order and the mere existence of a "contradiction" is often not enough to kick-start change. External pressure can, when intelligently and strategically applied, exacerbate those contradictions and precipitate reform. Given the proven ability of several present day market autocracies to ride the tiger of economic expansion without being swallowed by democratic liberalization, autopilot is not enough. Finding those pressure points should be an urgent priority for policymakers.


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