Why Do Countries Become/Remain Democracies? Or Don’t? (9): The Resource Curse

If we value democracy, then it’s interesting to know

  • how societies have achieved the transition from authoritarian forms of government to more democratic ones
  • why other societies have failed
  • and how democracies have avoided the opposite transition.

This knowledge will help us to promote and sustain democracy in the future. Something we already know is that this isn’t simple. There are a huge number of factors at play and there’s no silver bullet. Some of the most widely discussed factors are economic development, levels of education, and religion and culture.

I’ll bracket two important issues here: what kind of democracy are we talking about, and how do we measure transition or development towards democracy? If you want to know what promotes or inhibits democracy and act on this knowledge in order to further the cause of democracy, you can’t avoid these questions, but discussing them here would take us too far.

What I want to focus on here is the so-called resource curse. This curse is believed to be a phenomenon that blocks countries’ development towards democracy. Promoting democracy means lifting the curse. Now, what is this curse, and is it real or just another simplistic explanation of the course of history?

Countries which own lots of natural resources such as diamonds, oil or other valuables that are found in the ground, are often relatively poor, badly governed, violent and suffering from gross violations of human rights. Resource wealth can trigger corruption and grabbing, can give autocrats the means to retain power by buying off opposition or building a repressive state apparatus, or can tempt democratically elected leaders to cling to highly beneficial positions of power.

This sounds good but even a cursory glance at reality reveals some counter-indications. There are many resource rich countries that are governed very well and are pinnacles of democracy (take Norway). Still, that may only disprove part of the resource curse. It may be the case that democracies benefit from resources and are able to solidify themselves, while non-democracies are doomed to remain as they are because of resource abundance. Resources then only create a curse when democratic institutions are absent. So we shouldn’t worry about democracies failing because of resources, but about autocracies failing to transform because of them.

However, there’s an article here claiming that

resource wealth is positively associated with both economic growth and institutional quality.

Much depends, it seems, on how to measure resource abundance. There also is a reversal of the direction of causation, a common mistake in statistics:

There is no evidence that resource-dependent countries end up with slow growth and bad institutions. Rather, countries with bad institutions attract little investment, and as a result they grow more slowly and remain dependent on exports of commodities.

Why Do Countries Become/Remain Democracies? Or Don’t? (6)

Democracy is a human right. If we want to promote universal respect for this right, we have to know how societies have achieved the transition from authoritarian forms of government to more democratic ones, and how democracies have avoided the opposite transition. Once we know this, we can promote the future emergence of democracies, and we can counteract the breakdown of existing ones.

Unfortunately, this is a very murky area of political science. The only thing that’s clear is that there is no silver bullet. There isn’t one thing we can do to transform societies once and for all into democracies. Things aren’t easy or simple. A huge number of factors have been identified as causes of or obstacles to democratic transitions, and existing democracies need constant nurturing and protection. A few of the factors that have been named as either promoting or inhibiting democracy are:

  • economic growth or GDP per capita
  • protestant culture versus catholic culture (a catholic culture is believed to be more hierarchical)
  • levels of education and literacy
  • income or wealth inequality (in very unequal societies, the wealthy have a lot to lose with democracy)
  • levels of employment in agriculture versus industry (industrial societies are believed to more more urban and less attached to traditional and authoritarian social relationships)
  • the presence/absence of neighboring democracies
  • export diversity (countries with one major export product such as oil tend to be “resource cursed”)
  • is a country a former U.K. colony or not? (former U.K. colonies are believed to be more sympathetic to democracy given their British colonial heritage)
  • is there a large middle class or not?
  • etc.

Statistical analysis to pinpoint which ones of these many variables really determine democracy – and which ones are merely guesses – has yielded contradictory results, not surprisingly given the low numbers of observations (societies or countries don’t change their political systems very often) and the relative lack of long time series (most classifications of regime types haven’t started earlier than a couple of decades ago). One interesting analysis is here.

So don’t expect me to have an opinion here. What I wanted to focus on in this post is the first in the list. There are two radically opposing views on the effect of economic development on democracy. One view is called modernization theory. Basically, the idea is that as countries develop economically, people will switch to other, higher needs, such as self-government, self-control, and political activity in general. Poverty, on the contrary, forces people to focus on survival and makes democracy seem like a luxury.

However, the opposite view is also persuasive. Countries that do well economically are less likely to become democratic because the population is quite pleased with how things are going and will not revolt. The authoritarian rulers can claim that it’s thanks to them that things are going well. It’s not unlikely that economic collapse rather than success causes authoritarian regimes to break down.

So even if you isolate one of dozens of possible factors causing regime transition, things aren’t very clear. Should we starve dictatorships, or help them develop economically? As a result of this lack of clarity, it’s very difficult to frame foreign policy in such a way that it favors the development of democracies around the world. This may go some way to explain the traditional lack of ambition in diplomatic circles.