Poor Democracies

...And if most poor democracies lack a democratic culture, the formerly Communist nations are at a special disadvantage...

...There is, furthermore, a matter of perception: Government bureaucrats under dictators, and party elites under communism, tended to steal and consume inconspicuously, certainly without media attention, while the new class that has succeeded them is far less secretive and is relentlessly pursued by the media...

...A deafening agitprop campaign and open harassment of the opposition by the government failed in the face of determined and at times heroic voter resistance...

...And in the course of the 1980s, a few poor countries held breakthrough elections that launched durable democracies—notably El Salvador in 1982...

...The voters in the poor democracies seem to have grasped Isaiah Berlin's adage, "Liberty is ..liberty, not equality, or justice, or culture, or human happiness or a quiet conscience...

...The end result is the "institutionalized limitation of the power of government...

...encouragement, not neglect and disdain...

...One result is a remarkable opportunity in the early 21st century to revisit the rough and ready days of early capitalism, whose "bloodstained story of economic individualism and unrestrained capitalist competition," in the words of Isaiah Berlin, has faded from the memory of the West...

...More or less fair elections, a press free of government censorship, real choices before the voters, and mostly honest tallying of the results may be key to the exercise of popular sovereignty, even in the absence of (or with glaring deficiencies in) such components of mature liberal democracy as independent and impartial courts, the separation of powers, and checks and balances...

...Even when competitive elections and an honest count are confined to a few pockets within a dictatorial regime, they can portend earth-shattering change—as in the mighty strides made by pro-independence and anti-Communist candidates in elections in the Soviet republics between 1988 and 1991, or the election of Boris Yeltsin to the Congress of People's Deputies in March 1989 with 92 percent of the Moscow vote after Yeltsin had been expelled from the Politburo by Gorbachev...

...It may be that some poor democracies will follow the "Italian path" to modernity, enduring a dysfunctional state— corrupt, wasteful, meddlesome, universally despised, and cheated by the taxpayers—while enjoying a vigorous private economy...

...Given these heavy handicaps, it would be easy to conclude that the poor democracies, however numerous, are a flash in the pan, destined to go down in history as a hopeful but short-lived post-Cold War phenomenon, too exotic to be stable, lacking the "software" of democracy, corroded by corruption, and torn apart by the tensions between democracy and capitalism...

...Within a few years, most devolved into leftist or rightist dictatorships, often beset by guerrilla insurgencies...

...The progress of the poor democracies in the coming years is our best hope for diminishing poverty and violence in the world...

...It may help to remember that, unlike the West at a comparable stage of economic development, these poor countries are practicing an early capitalism that is strengthened and made more equitable by democracy, step by painful step...

...If the West is serious about assisting them, Western leaders, public opinion, and international financial institutions must be prepared to travel a long and tortuous road...

...They face real economic challenges, and their civic cultures are underdeveloped by the standards of the West...

...The dynamics of capitalism-by-majority are by now well known...

...Yet the evidence is otherwise...

...Beginning in the Middle Ages, the Western European road to democracy was paved with slow gains in rights and immunities, as nobles secured independence from the king, and towns, the church, universities, and corporations grew progressively freer from local lords...

...Freedom to vote for opposition candidates has turned out to be not only a necessary but often the sufficient condition for an initial democratic breakthrough...

...Most of these countries were corrupt for centuries before they became democratic (or capitalist...

...Where democracy arrived suddenly, state wealth, formerly appropriated by the dictator or the party and guarded with guns by the army and secret police, was delivered into the custody of a much less cohesive group of first-generation democratic politicians...

...An impatience to be rich, a contempt for those slow but sure gains which are the proper reward of industry, patience, and thrift, spread through society . . . [and] took possession of the grave Senators of the City, . . . Deputies, Aldermen...

...Then in parliamentary elections in June 2000 came the spectacular success of the Movement for Democratic Change, and four months later, an attempt to impeach Mugabe, who had ruled the country since its independence in 1980...

...This is an enormous task...

...Admittedly, Russia, with its extraordinary isolation and the militarization of its economy, is an extreme example...

...Every day some new bubble was puffed into existence, rose buoyant, shone bright, burst and was forgotten...

...Much to the annoyance of Western journalists and experts, the capitalism-by-majority practiced by poor democracies has turned out to be a very tricky business, characterized by slow and zigzagging market reforms, incomplete privatization, a less than wholehearted embrace of globalism, and at best extreme difficulty in reducing huge budget deficits resulting from social spending and the subsidization of failed industries...

...This could have been written about any number of poor democracies...

...In Mexico, Ghana, and Yugoslavia, the opposition was able to dislodge a government by majority vote, ending, respectively, the 71-year, 19-year, and 13-year rule of one party or an elected autocrat...

...Until 1989, democracy was rare in "less developed nations...

...Long experience of self-rule at the level of the town, the congregation, the guild, the local charity, together with the separation of the economic and political realms, forms the tallest hedge a culture can place against lawlessness and graft...

...The opposition can organize and participate in politics, criticize the government, distribute canvassing materials, and compete for local and national office in free and more or less fair elections, whose results, in the end, reflect the will of the majority...

...Elites, professing to know how the masses really feel, have time and again predicted disillusionment with democracy and its abandonment by the citizens of poor nations...

...erful enough to overcome great obstacles...

...In his Capitalist Revolution, Peter Berger elaborated: In democracies, "governments are constituted by majority votes in regular and uncoerced elections, in which there is 'genuine competition' for votes of the electorate...

...Local self-government preceded national democracy by centuries...

...But their existence can also be seen as a hopeful sign, even a remarkable success story, and as a tribute to the universal appeal of freedom and self-government...

...For unlike the pre-democratic capitalist West, the poor democracies have not brutally "eliminated" these millions of people from politics, but instead have given them the right to shape the institutions and practices of emerging capitalism...

...Variations on this scenario were played out in February 2000 legislative elections in Iran, when reformers and moderates won a number of districts and carried Tehran decisively, and again in the June 2001 presidential election, when the allegedly pro-reform president Mohammad Khatami was reelected with 76 percent of the national vote...

...Another defining attribute of poor democracies is their historically unprecedented combination of elections by universal suffrage with early, crude, and brutal capitalism, what Marx called the capitalism of "primary accumulation...

...Of course, even in the West, these formidable safeguards were no guarantee against the fraud and corruption of early capitalism...

...and those who are engaged in such competition are guaranteed freedom of speech and freedom of association...

...Parliaments, often dominated by leftist populists, adopt budgets with ever greater "social spending" and subsidies for loss-making public or nominally private enterprises with politically sensitive constituencies, such as farmers or coal miners...

...The experience of the poor democracies is a reminder of the fundamental heterogeneity of capitalism and democracy: The former institutionalizes inequality, while the latter institutionalizes equality.Amalgamated in the West by the weight of time and custom, capitalism and democracy have an especially tense, often tenuous, co-existence in poor democracies...

...In many respects, the poor democracies' experience has been the opposite...

...The most immediate and conspicuous effect of the poor democracies' shortcut to political modernity has been corruption, which to a varying but very high degree plagues all of them...

...what are the policy implications...

...The abolition of state ownership or control of the economy almost overnight turned state assets into a beached whale for vultures to feast on—with bureaucrats controlling access to the beach via quotas, licenses, and rigged auctions...

...Cases in point are countries whose political systems combine anti-democratic and democratic practices and institutions, with neither side scoring a permanent victory: for instance, Belarus, Zimbabwe, Haiti, and Pakistan...

...The story of the 21st century, by contrast, could be greatly influenced by the evolution of the poor democracies...

...Countries like Yugoslavia, Ghana, and Zimbabwe have tested and confirmed the correctness of Joseph Schum-peter's classic minimalist definition of democracy: "free competition for a free vote...

...But proto-democratic regimes that sprang up in the Third World tended to be torn apart by the magnetic tensions of the bipolar Cold War circuit...

...Now all that has changed...

...The intermediate category— democracies with per capita GDIs between $10,000 and $20,000—includes Portugal, Spain, Greece, and Israel...

...It has been said that the post-Communist societies have had to start out as "democracies without democrats," for the totalitarian state systematically destroyed, corrupted, or subverted even nonpolitical voluntary associations, the very groupings that promote and help internalize self-restraint and compliance with rules—church, neighborhood, profession, and, at the height of Stalinism, family itself...

...As always in matters of liberty, ordinary people have proved far wiser, and infinitely more patient, than intellectuals...

...the impartiality of courts...

...Thus, in 1999, Brazil sought to reduce the budget deficit (much of it due to the salaries, benefits, and pensions of a bloated civil service) by taxing pensions and imposing painful across-the-board public sector cuts...

...No longer assets in a global struggle, poor countries were left to their own devices—and many succeeded in establishing tenuous and flawed but real democracies, in Central and South America, Southeast Asia, and Africa, as well as in the former Soviet bloc...

...the United States is at $32,000...

...On the other hand, in 2001 elections in Uganda and Benin, the lack of a clean vote count precluded what might have been two more democratic breakthroughs...

...Their surplus labor is concentrated in the civil service and obsolete industries: shipyards, steel mills, mines, or defense...

...The government is confronted with a Hobson's choice, reigniting inflation by printing money or reducing already meager welfare benefits and cutting government services, with the attendant risk of losing elections to the Left (in the post-Soviet regimes, the ex-, reformed, or neo-Communists...

...Corruption is a huge problem, and political cultures formed over centuries and misshapen in recent decades by particularly dehumanizing and irrational political and economic systems cannot be remade overnight...

...Again and again, liberty's appeal has proved powFreedom to vote for opposition candidates has turned out to be not only a necessary but often the sufficient condition for an initial democratic breakthrough...

...The case of one rich democracy, Italy, suggests the limitations of this approach...

...Although its most recent parliamentary elections were boycotted by the opposition, there is a distinct possibility that in the next presidential election the opposition to president Alexander Lukashenko will unite behind a single candidate...

...Martin's Press, 2000...

...In Western Europe, the medieval unity of economic and political power eroded over centuries, until the economic and political spheres became largely (although never entirely) separate...

...In the absence of tax revenues even remotely commensurate with skyrocketing expenditures, budget deficits burgeon (Poland, leader of the post-Communist transition, runs a budget deficit of 8 percent of GDP), national currencies weaken, interest rates rise, and governments become heavily indebted to the international financial institutions...

...For comparison, the rich democracies enjoy per capita GDIs over $20,000: Canada, Italy, and France are between $20,000 and $24,000...

...With rare exceptions, Western media coverage of poor democracies is shaped by GDP fetishism...

...In most poor democracies, this critical divergence is only beginning, haltingly, to take place.Political power translates into ownership or economic control, and vice versa, to the benefit of the elder, the tribal chief, the mayor, the governor, the kolkhoz chairman, or the factory manager...

...Over centuries, a system of mutual rights and obligations took shape in the feudal relations of vassalage...

...To overcome the same problem, in the spring of 2000, Argentina cut the wages of public sector workers by 10 percent to 15 percent...

...Almost always impoverished (and often near-bankrupt), the state is saddled with the task of simultaneously promoting modern capitalism open to the global economy and coping with the huge political problems such a strategy engenders in a democracy...

...There are now some 70 nations with a gross domestic product below $10,000 per capita and with the basic attributes of democratic government...

...Even where poor democracies have been systematically subverted, their democratic elements have proved difficult to extinguish...

...These characteristics distinguish poor democracies both from non-democracies (such as Burma, China, Cuba, North Korea, Saudi Arabia, Turkmenistan, and Vietnam) and from pseudo-democracies, regimes decked out in the institutional trappings of democracy, yet falling short on one or more of the criteria suggested above (for instance, Azerbaijan, Egypt, Kazakhstan, or Malaysia...

...Finally, poor democracies have newspapers free of government censorship...

...The revolt against the totalitarian or authoritarian state that gave birth to the poor democracies was, in most instances, a national rather than a local affair...

...But in the poor democracies, corruption is pervasive and systemic...

...The case of Zimbabwe is, if anything, still more impressive and heartening...

...Hence, perhaps, the American businessman's enthusiasm for non-democratic China, where graft is centralized and strictly rank-rationed, workers are docile, secrets are protected by the police, and the lines of authority are etched by fear in the hearts of underlings, ensuring a bribe's effectiveness— by contrast with, say, Russia, a poor democracy where fear of government has been mostly forgotten, the media are brazen and hungry for scandal, prerogatives are hopelessly confused, and secrets have a half-life of two days...

...In the worst-case scenario, the vicious circle closes, as governments seek to make ends meet by cutting their budgets, selling debt at astronomically high rates of return, and increasing already unrealistically high taxes...

...Among the most spectacular confirmations of this theory are Solidarity's parliamentary victory in Poland in 1989 and the upset of the Sandinista government by the United National Opposition in Nicaragua in 1990...

...In the 1980s, an estimated 30 percent of the Soviet economy was assumed to be value-subtracting or, to use the fashionable term, "virtual," meaning that the finished product was worth less than the raw materials and labor that went into making it...

...the self-policing of corporations, guilds, and professional associations...

...Yet, in the past decade, with just a few exceptions (several African nations where democracy has been brutally and cynically subverted by warlords fanning tribal strife, and possibly Venezuela), poor democracies have resisted slipping back into authoritarianism...

...The poor democracies and their wealthy cousins arrived at democratic institutions by very different paths...

...But the proper response to the inadequacies of poor democracies is neither to give up on their democratic prospects Rather, it is to encourage their democratic development while refusing to reduce their complex reality to a single issue or measure their progress by a single criterion...

...A leading member of Silvio Berlusconi's parliamentary coalition (triumphant in the May 13, 2001, elections) recently described the contrast between "public" Italy—which he called "bad" and "embarrassing," its legal system a "joke," its armed forces "just collecting their pay," its police "pitiful"—and "private" Italy, which he called "very good," "admired all over the world," and which in the last half-century has boasted the most vibrant, least recession-prone economy in Europe...

...Democracy has endowed these countries with remarkable strength and flexibility...

...In most poor democracies, certainly those of the post-Communist variety, democracy was the paramount societal goal, with capitalism a distant second item on the agenda...

...L ---Belarus may be another instance of deadlock between democracy and authoritarianism...

...Second, after almost a century of modern democracy, many Western experts and journalists have forgotten that democracy is not an all-or-nothing affair, but a system toward which a political culture may advance in fits and starts, amid contradictory impulses, by minute but cumulatively momentous steps...

...The 2000 survey by McKinsey Global Institute (the best study of the Russian economy to date) confirmed that estimate, finding 30 percent of Russian enterprises, employing 50 percent of the industrial work force, to be "not worth upgrading because they were either sub-scale or relied on obsolete technology...

...Far from being an outgrowth of local self-government, democratization in these countries was an exercise in superimposing borrowed political structures—enthusiastically borrowed, to be sure—upon societies whose everyday social arrangements and values had been inherited largely intact from anti-democratic regimes...

...Gradually, customary arrangements acquired the force of law: the sanctity of contracts freely entered into...

...Stable democracy seemed to be a luxury only rich nations could afford, the icing on the cake of a five-digit per capita GDIP To be sure, the correlation was never perfect...

...They vote...

...Sen':ya—Milosh^'vich, z^^^ra—Luka" (today Milosevic, tomorrow Lukashenko), read a poster carried by a Minsk protester last October...

...This was made plain in the 1997-98 "emerging markets" financial crisis...

...and Switzerland and Luxembourg are at $38,000 and $43,000...

...In economic terms, the poor democracies cover an enormous range: from Nigeria, Bangladesh, and India (with per capita GDIs of $440 or below, according to World Bank figures for 1999), to Peru, Russia, Jamaica, and Panama (between $2,000 and $3,000), to Poland, Chile, Hungary, and the Czech Republic (between $4,000 and $5,000), and, in the upper crust, Argentina ($7,555), South Korea ($8,500), Barbados ($8,600), Malta ($9,200), and Slovenia ($10,000...

...Third, we can revise the criteria by which the progress of poor democracies is measured...

...This led to the embrace of the principles of democratic governance and the swift adoption of institutions through which they could be effected...

...In addition, analysts must learn to recognize gradations of corruption—to differentiate between levels potentially fatal to democracy and liberal capitalism (the Nigerian or, until a few years ago, Sicilian level) and pernicious but non-lethal degrees (the Indian, Mexican, or Turkish...

...The poor democracies have shown remarkable resilience under the harsh conditions of primitive capitalism...

...Yet, for all their conspicuous faults, they feature basic individual rights and political liberties...

...Experience has shown again and again that progress can defy enormous odds...

...The pioneer of large-scale industrial capitalism, merry England, where 8 out of 10 subsistence farmers were forced off the land in the 30 years between about 1780 and 1810, traveled the road to industrialization over the bodies of farmers and urban poor—^pauperized, arrested as vagabonds, branded, hanged, or shipped to the colonies...

...The admitted brutality of the enclosures confronts us with the limitations on the possibility of peaceful transition to democracy and reminds us of open and violent conflicts that have preceded its establishment...

...So pervasive has the Marxist interpretation of history become that economic growth is often considered the sole measure of progress...

...Leon Aron, resident scholar and director of Russian studies at the American Enterprise Institute, is the author ofYeltsin: A Revolutionary Life (St...

...These regimes have been greeted in the West mostly with scorn and condescension...

...One hesitates before stealing from a till one has freely voted to fill, or breaking rules one has freely agreed to uphold...

...The author of the classic account of the various Most of these countries were corrupt for centuries before they became democratic (or capitalist), though government bureaucrats and party elites tended to steal without media scrutiny...

...For that matter, there remain In most poor democracies, the separation of the economic and political spheres-accomplished over centuries in the West-is only beginning, haltingly, to take place...

...It is an excerpt from Macaulay's description of London at the end of the 17th century, in the aftermath of the Glorious Revolution...

...Democracy itself, conceptually uncoupled from economic hardship, is cherished by consistent and solid majorities...

...Occurring in an institutional vacuum, privatization—whether in Mexico, Brazil, India, the Czech Republic, or Russia—necessarily brought together a newly empowered (often, newly legalized) and very hungry entrepreneur and an impoverished bureaucrat—with the predictable result...

...For most of the past century, history was shaped by the global struggle between democracy and totalitarianism, acted out by some of the world's largest industrial and military powers: the United States, Germany, Japan, Russia, and China...

...This has produced a novel socioeconomic organism: capitalism whose key elements require approval by the voters, elements as basic as private ownership of large industrial enterprises, the right to buy and sell land, to hire and fire workers, and market prices for rent and utilities...

...paths to modern democracy, Harrington Moore, wrote that "as part of the industrial revolution, [England] eliminated the peasant question from English politics...

...In some countries, we have been treated to the sight, never before beheld, of modern democracy essentially without capitalism—for example, in Ukraine between 1991 and 1995...

...First, the strength of the democratic impulse alive in poor democracies should never be underestimated...

...They also include "soft" one-party states or military dictatorships, like Mexico until Vicente Fox's victory in 2000 or Turkey today, where the opposition is permitted to exist but never to win the majority in the national parliament or to hold the highest executive office for long...

...Finally, in assessing the viability and prospects of this or that poor democracy, we tend to focus on the state, which is readily analyzable, rather than on other more elusive yet crucial parts of the picture: civil society and those aspects of economic and social development that lie beyond the state's reach...

...This reality suggests how misleading is the term "illiberal democracy," popularized by Fareed Zakaria...

...While the end of the Cold War did not in itself introduce democracy in poor nations, it greatly improved the odds for democratic stabilization...

...but every poor democracy that has implemented market reforms has experienced an initial large drop in GDIP The result has been surplus workers in obsolete bureaucracies and industries—be they Brazilian civil servants, Romanian miners, or the dock workers of Gdansk—creating an enormous political problem...

...Here, the institutions, ethical norms, and practices of modernity failed to develop under the ancien regime...

...These poor democracies are bare-bones democracies...

...In the West, capitalism preceded universal suffrage by at least a century...

...a more accurate classification would be "pre-liberal democracy...

...Similarly, in March 2001 municipal elections in Ivory Coast, opposition candidates for mayor won in most cities after an almost 40-year monopoly by the ruling party...

...In 2000, three such nations passed the ultimate test: a democratic transfer of power...

...In their leap to modernity and global capitalism, the poor democracies have had to start out with backward, autarkic, often militarized state-owned economies...

...Poor democracies like Russia, Brazil, and South Korea survived rather easily, while the non-democracy Indonesia saw state authority collapse amid riots and anti-Chinese pogroms, and the pseudo-democracy Malaysia reached for scapegoats and kangaroo trials to save the regime...

...Surely the poor democracies—inspired, after all, by the example of the older and wealthier democracies—deserve aid and nor to refrain from pointing out their shortcomings...

...Almost all the states of Central and South America had had democratic interludes sandwiched between periods of military dictatorship...

...There follow depressed equity prices, stifled direct investment in the economy, capital flight, the shift of ever more economic activity into "grey" or "black" markets—and the further shrinking of the tax base...

...An assortment of poor countries—India, the island nations of the English-speaking Caribbean, Venezuela—had been democracies for decades...

...Except in a few Central European nations such as Estonia and the Czech Republic, the "software" of liberal capitalist democracy either never existed or was badly eroded or even extirpated by decades of communism...

...The voters in the poor democracies seem to have grasped—as have few journalists or experts—the essence of Isaiah Berlin's adage, "Liberty is liberty, not equality, or justice, or culture, or human happiness or a quiet conscience...

...Where the foundations of modern capitalism are being laid for the first time in countries governed by majority rule, the consequences for both capitalism and democracy are profound...

...Their people enjoy freedom of speech, the right to petition government, freedom of assembly, and the freedom to travel abroad...

...Another crucial distinction between the poor democracies and their richer, more mature cousins lies in the relationship between property and political power...

...In reading about them, we learn of their economic struggles, their democratic deficiencies, their uncertain prospects...

...well-publicized pockets of corruption in modern rich democracies: New York and Chicago through most of the last century, Marseilles or Palermo today...

...First, in a referendum in February 2000, Zimbabweans defeated a draft constitution, which would have legitimized president Robert Mugabe's life term in office and authorized the seizure of land belonging to white farmers...

...It is a central issue in the national politics of Peru and Mexico, Colombia and Venezuela, Brazil and the Czech Republic, Bulgaria and Romania, all the countries of the former Soviet Union, the Philippines, Turkey, India, South Korea, Nigeria, and South Africa...

...Even excluding mini-states and protectorates, poor democracies are now more numerous than regimes of any other type...

...A powerful national consensus formed in favor of personal and political liberty...

...The principal agent seeking to reconcile democracy and capitalism in poor democracies is the state...

...That story involves, among other things, the brutality with which the rich democracies rid themselves of surplus classes, most conspicuously the subsistence farmer and the independent artisan made obsolete by the Industrial Revolution...

...It was [easy] and . . . lucrative to put forth a lying prospectus announcing a new stock, to persuade ignorant people that the dividends could not fall short of twenty percent...