CHINA’S blistering economic performance in recent years has brought advocates of democracy out in hives. GDP growth in the one-party state, at an average of 10% over the past decade, has easily outpaced that of its democratic emerging-market rivals. India saw annual growth of 6% over the same period; Brazil, just 2%. Some say that democracy is to blame for India’s and Brazil’s slower progress. Politicians in such places cannot lay the foundations for long-term growth, the argument goes, since voters want instant gratification. Are freedom and prosperity really at odds?
The idea is not new. In 1994 Torsten Persson of Stockholm University and Guido Tabellini, then of the University of Brescia, published a paper that argued that in democracies, vote-hungry politicians divert resources away from people who could use them more efficiently by lavishing spending on their constituents in the form of unemployment benefits and pensions. This and political gridlock, another unfortunate aspect of democracy, both tend to slow growth. Another
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