The Legatum Institute’s Anne Applebaum was joined by Ann Bernstein of the Centre for Development and Enterprise in South Africa; Eswaran Sridharan of the University of Pennsylvania Institute for the Advanced Study of India in New Delhi; Simon Schwartzman of the Institute of Labour and Society in Rio de Janeiro.

The project aims to refresh and add diversity to global development debates at a time when many in the developing world are turning away from Western examples, with an attraction to a new approach that twins market economics with authoritarianism and has delivered staggering economic growth, principally in China.

By focusing on the examples of three large and important developing democracies—India, Brazil, and South Africa—the project’s research demonstrates that democracies are not a hindrance to growth. On the contrary, democratic freedoms can help to promote sustained development, higher growth, and poverty alleviation. In order to tackle current challenges and achieve further growth, these three countries do not need less democracy, but more. 

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The Executive Summary of the project, its research papers, and the final report can be found here.

The final report was launched at the Legatum Institute in London, where The Economist’s Adrian Wooldridge joined the report’s contributors in a panel discussion.

“To those people who are tempted by the authoritarian bargain, we are saying: hold on —you don’t have to give up human rights for growth.”
- Ann Bernstein, Centre for Development and Enterprise

Anne Applebaum and Ann Bernstein laid out the report’s key findings, reiterating  the potential of a “democratic alternative from the South” to provide, not an exact blueprint, but a set of examples and experiences which have delivered results in India, South Africa, and Brazil, and could offer valuable lessons to other developing societies. 

Outlining the core themes of the project, the presenters argued:

  • For the first time in a generation, a global debate about the economic merits of democratic and authoritarian systems is emerging.
  • Twenty-five years ago Brazil, India, and South Africa all experienced financial crisis and were able to respond with market reforms. These reforms took place within vibrant democratic cultures. 
  • These countries are now entering a difficult new phase where a second wave of reform is needed for them to be globally competitive. Some of these problems include a high cost of doing business, inflexible labour markets, schools where access to education has increased but quality has not, and infrastructure which is outdated and insufficient.
  • A central challenge to the democratic model is that the reform process often appears to be hindered, corrupted, or side-lined by powerful interest groups who slow down decision-making.  
  • Yet, what is holding these countries back is not democracy. It is bad policy choices, the failure to embrace markets and private sector dynamics, and weak institutions afflicted by corruption and crony capitalism. 
  • In Brazil, India, and South Africa, civil society institutions, independent judiciaries, and free media play essential roles in this process, and have no equivalent under authoritarian regimes. 
  • One integral difference between the democratic and authoritarian model is the self-correcting nature of democracies and their ability to make “retrievable mistakes”.
  • All three countries must now effect four areas of reform: further market liberalisation, to encourage private-sector development; strengthening of the state, to improve basic service-delivery; deepening of democracy, to enhance accountability and transparency; and the reassessment of mechanisms to help the poor, to ensure that poverty is eliminated.
  • Adrian Wooldridge pointed out that the news about democracies is often negative. The growth of democracy has flat-lined since 2000. In the US, Congress is unable to pass budgets and has an approval rating of only 10%. 
  • China is challenging Western liberal democracy and liberal capitalism with the idea that you can have a circulating system of leadership without elections.
  • Wooldridge concluded that the challenge being presented to democracy is not the challenge the Soviet Union presented – it is more subtle. Even in a period of slowing growth, China will still grow faster than its democratic rivals, so this debate will continue to demand attention.

The themes and findings of the papers were explored in events and discussions held at the Overseas Development Institute, Westminster Foundation for Democracy and LSE IDEAS in London. In Washington, DC discussions were held at the National Endowment for Democracy, Woodrow Wilson Center, World Bank, US Department of State and American Enterprise Institute, among others.

“This project gives voice to those in the South who can make the case for democratic development and market economics. It’s not an either-or proposition –it’s a both proposition.” 
- John Sullivan, Center for International Private Enterprise
“This research very powerfully makes the point that there is no conflict between democracy and higher levels of growth."
- Kevin Watkins, Executive Director, Overseas Development Institute
“With elections coming up in Brazil, and just having concluded in India and South Africa … these democracies have come a long way but they will be tested in the coming years on whether they can continue to deliver sustained and inclusive economic growth.”
- Jane Harman, Woodrow Wilson Center

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