News and Views from the Dismal Science

Dr. Econ's commentary on local, regional, national, and global economic affairs
Dictators and their economies

by Jurgen Brauer, January 2007
Copyright: J. Brauer. No reproduction without permission.

Among the better news, as 2006 drew to an end, one may count the near end of one and the death of two other dictators.
Among the better news, as 2006 drew to an end, one may count the near end of one and the death of two other dictators. They are Fidel Castro in Cuba, Augusto Pinochet in Chile, and Saddam Hussein in Iraq. Castro will escape being called to account, Pinochet squeaked by a formal indictment and trial but at least was publicly embarrassed over his last years, and Saddam Hussein got his deserved end through public trial and semi-public execution.

Dictators abound. From Idi Amin of Uganda, who was permitted to end his days unmolested in Saudi Arabia in 2003, to Pol Pot of Cambodia, who was placed under no more than house arrest by his own former Khmer Rouge compatriots during the last year of his life - he died in 1998 - many dictators have escaped judgement. Leopoldo Galtieri, Argentina’s dictator during the final phase of the “dirty war” there was put under house arrest and, later, in jail for mishandling the Falkland’s War of 1982 but not made to pay for the human-rights abuses committed under his rule. He was “pardoned” in 1991 and died in peace in 2003. Alfredo Stroesner, long-time dictator of Paraguay, escaped justice as well. Ousted in a coup in 1989, he made off to Brazil where he died in peace in 2006.

All those men are dead. Other dictators are still alive. Many, like Robert Mugabe, of Zimbabwe, run “their” country into utter ruin with barely any objection raised by what is euphemistically called “the international community.” The ongoing disaster in Dafur for which Sudan’s president Omar Hasan Ahmad al-Bashir signs responsible remains essentially unremarked, unattended, and unpunished. Kim Jong-Il, dictator of North Korea, is set to accost the world as he continues to fiddle with nuclear-weapons tests even as he starves “his” people.

Not all democracies do well economically, and not all dictatorships spell economic disaster.
Not all democracies do well economically, and not all dictatorships spell economic disaster, however. Both China and India have done well in recent years - China under heavy-handed “party” rule, India under a raucous democratic system. (And both of them failed economically prior to the 1980s and 1990s, respectively.) Both South Korea and Taiwan moved toward democracy only in the late 1980s yet their economic ascent took place under non-democratic auspices in the 1970s and early 1980s. South Africa did reasonably well under racist rule, which lasted until 1994, for one part of its population, and not at all for everyone else.

Nicaragua, in Central America, has never done well, neither under Somoza’s rule, nor under Sandinista rule, nor under the post-Sandinista move to democratic elections. In the Philippines, Ferdinand Marcos declared martial law and retained power after his term of election ended and ran the country for another 14 years until 1986. In the 20 years since, no dramatic economic progress has been made. Similarly, Turkey has seen periodic take-overs by military rulers, as has Thailand, but throughout the upheavals both have progressed economically at a measured.

Many a democracy involves no more than a change-over from one elite to another, leaving the poor with little to hope for.
In truth, many a democracy involves no more than a change-over from one elite to another, leaving the poor with little to hope for. Likewise, many a despotic regime can bring a measure of stability and focus that reassures investors. Russia, nominally a democracy, scares off multitudes of potential investors; China, in contrast, attracts them. The public discussion should discriminate more surely and routinely between “mature” democracies such as those of the member states of the European Union and “immature” ones where government change is but a game of musical chairs among the rich and powerful. Does it really matter for the poor that Burma (Myanmar) is ruled by a military junta? Would things be any better if the upper-class exchanged among itself the keys to government offices from time to time? By the same token, does the United States’ professed belief of bringing “democracy” to certain localities around the world amount to significant change on the ground? (And let us not forget that it simultaneously supports decidedly undemocratic states such as Saudi Arabia.) More genuine, and therefore probably sustainable, change has taken place in the post-Cold War period in some, but not all, East European and Central Asian states. While democracies do not guarantee economic well-being and while dictatorships do not spell automatic economic disaster, there is nonetheless a certain hierarchy of goals. Rich and free is best (say, Canada). Well-off even if somewhat shackled (China) is perhaps better than being permanently poor and nominally democratic (Indonesia). Of course, China’s wealth is overstated. Most of its people still are dirt-poor. Worst, no doubt, is starving and imprisoned (North Korea, Zimbabwe).

Jurgen Brauer is Professor of Economics at the James M. Hull College of Business, Augusta State University, Augusta, GA, and may best be reached via his web site.