The Only Way to Topple the Mullahs

The Only Way to Topple the Mullahs

Since World War II over 100 nations have undergone a variety of processes of political and economic development, so it should be possible to examine this 50-year and 100-nation experience for statistical and causal associations. A democratic society is one that is fully subject to the rule of law: legislation rather than personal authority produces limitations on individual liberty, and legislation is neutral across persons (legality principle). The legislative process ought to weight no individual’s or group’s preferences more heavily than those of any other individual or group (equal weight principle).

Does economic development cause countries to become more democratic? A vast literature says yes. Except for a few states mostly around the Persian Gulf, almost all the richest countries have responsive and accountable governments.

A popular scientific way of studying ‘causality’ is called “The Granger causality test”.  This is a statistical hypothesis test for determining whether one-time series is useful in forecasting another. Ordinarily, regressions reflect “mere” correlations, but Clive Granger argued that causality in economics could be tested for by measuring the ability to predict the future values of a time series using prior values of another time series. Many political scientists have used Granger’s causality test to understand the relationship between political and economic development.

There is a relationship between the level of economic well-being and economic freedom is bilateral or jointly determined. And intuitively, this bilateral relationship is not surprising since countries that experience a higher level of economic well-being in response to more economic freedom are likely to liberalize their economies even more.

However, this relationship is not simple or easily demonstrated in a statistically rigorous way. Political scientists have shown that political freedom did not Granger-cause economic freedom. Many scientists have also found that economic freedom, does not Granger-cause political freedom when considering the overall state of a nation’s economy.

But, there is one factor that does seem to tie these two together, however, is the level of economic wellbeing. This is shown to Granger-cause both economic freedom and political freedom, while economic freedom is shown to Granger-cause the level of economic well-being. Results clearly show imply that the relationship between economic freedom and political freedom depends on the level of a nation’s per capita GDP—that is, political freedom may be affected by the impact of real per capita GDP, which is affected by the level of economic freedom results confirm those of previous studies that show that economic freedom is an important factor driving growth, but they also indicate that there is a feedback effect occurring suggesting that the level of economic well-being also enhances economic freedom.

Since Deng Xiaoping opened up China’s economy more than 25 years ago, inaugurating an era of blistering growth, many in the West have assumed that political reform would follow/ The argument, in its simplest form, runs like this: economic growth produces an educated and entrepreneurial middle class that, sooner or later, begins to demand control over its own fate. Eventually, even repressive governments are forced to give in.

Economic growth, rather than being a force for democratic change in tyrannical states, can sometimes be used to strengthen oppressive regimes. There is now plenty of evidence to suggest that autocratic and illiberal governments of various stripes can at least delay democracy for a very long time.

Lengthy lag between the onset of economic growth and the emergence of liberal democracy. Authoritarian regimes are getting better and better at avoiding the political fallout of economic growth — so good, in fact, that such growth now tends to increase rather than decrease their chances of survival

In the long term, however, economic growth can threaten the political survival of repressive governments by raising the likelihood that effective political competitors will emerge. This happens for two reasons: economic growth raises the stakes of the political game by increasing the spoils available to the winner, and it leads to an increase in the number of individuals with sufficient time, education, and money to get involved in politics. Both these changes can set in motion a process of democratization that can slowly gather momentum, eventually overwhelming an autocratic status quo and creating a competitive, liberal democracy in its place.

Oppressive governments seeking to crack down on those pushing for democratic change have suppressed both types of goods — undermining their economies in the process governments in Russia, China, Vietnam, and elsewhere have discovered that by focusing their restrictions on coordination goods only, they can continue to provide those other services necessary for economic progress while short-circuiting the pressure for political change such progress typically promotes.

But four types of goods play a fundamental role in such activities. These include political rights, more general human rights, press freedom, and accessible higher education the greater the suppression of coordination goods in a given country, the greater the lag between economic growth and the emergence of liberal democracy. The study found that except at the highest levels of per capita income, significant economic growth can be attained and sustained even while the government suppresses coordination goods (remember China, Russia, and Vietnam

Progressive development requires policy choices that lead to a development pathway that produces a wide distribution of the benefits of growth; democratic regimes are more effective at producing wide distribution of benefits (because of the strong tendency of authoritarian regimes to structure economic activity towards “rent-seeking” activities, enrichment of the ruling circle, and widespread corruption). To put this in layman’s terms: democratic regimes are less prone to corruption and rent-seeking; they are less “predatory”.

Yet whenever consensus on this seems about to emerge, objections surface. Influential dissenters point out exceptions and propose alternative theories. Perhaps other factors predispose certain countries both to advance economically and forge democratic institutions, without one causing the other. And what to make of the countries that grow rapidly for years without any hint of political liberalization? What about Spain under Generalissimo Franco, Indonesia under President Suharto, Russia under Vladimir Putin?

In a recent article I suggest a reason why this debate refuses to die. Economic development does lead to greater democracy but not in a smooth, incremental way. At certain times, a country’s income matters a lot for its political evolution; in other periods, income’s influence is muted. What opens such windows is leadership succession. As authoritarian states become richer, they do tend to become more democratic—but the impact of development is concentrated in the early years of new authoritarian leaders.

Take Spain. Under Franco, who seized power in 1939, the country metamorphosed from a rural backwater into the world’s eleventh largest industrial economy. By the time Franco died of old age in 1975, GDP per capita had quadrupled and the number of telephones had increased by more than 250 times. But the political regime remained a brutal and arbitrary despotism.

Yet, within a few years, Spain had shot to the top of the democracy ratings. Historians see a clear link between the country’s multifaceted economic and social modernization in the 1960s and its political transformation in the late 1970s. Economic development set the stage for democracy. But its impact was felt only after the generalisimo left the scene.

This graph—which tells Spain’s story—shows why we may miss the impact of development if we look for only short-run relationships. It plots Spain’s Polity score—a rating which ranges from -10 (“pure dictatorship”) to +10 (“pure democracy”)—along with the country’s GDP per capita (in 1990 dollars). Do the two appear to be related? Looking only at annual changes we would not see much link. In fact, the two lines only move in the same direction for a few years after 1975. Most of the time the Polity score remains flat, seemingly unresponsive to the country’s steadily rising income.

Within the tenure of a given dictator such as Franco, increases in income do not prompt democratization. However, in periods in which the leader changed, the link between income and political liberalization is strong. Since leaders always change if you wait long enough, the income-democracy relationship emerges more strongly in statistical analysis in the medium run—periods of 10-20 years—than if one looks at annual or even five-year blocks of time.

Franco is not the only dictator to have held back the tide for a while. The following table lists all 21 leaders of non-democracies between 1875 and 2004 under whom GDP per capita topped $6,000 (at 1990 prices). These dictators were no fans of free government: on average, political institutions became slightly less democratic under them. Yet the pressures they bottled up exploded after they departed. In three quarters of the cases, the decade after the dictator left office saw political liberalization – and often a dramatic breakthrough. On average, these countries’ Polity scores jumped over that decade by more than eight points on the 21-point scale.

What is it about long-lasting dictators that breaks the link between development and democracy? Do dictators change over time, becoming more reactionary the longer they survive in office? Or is it only (initially) reactionary dictators that survive—a mechanism of selection. I found evidence for both, but stronger support for the selection effect. Authoritarian leaders are more likely to liberalize early in their terms than later on. But those that survive for a long time show a lower than average propensity to liberalize even in their early years. Such “survivors” are more likely to have no higher education, to have come of age before their country modernized, and to head monarchies, one-party states, or one man dictatorships, rather than military juntas.

If economic development makes it harder for a dictator to pass on his regime intact to a son or associate, why do dictators allow their countries to develop economically?  (Of course, some don’t—but many do.) They might consider an advanced economy necessary for military defense, but that is probably not the only reason.

Paradoxically, high economic growth and the high national income it—ultimately—causes have counterpoised effects: the first entrenches the dictator, while the second undermines the dictatorship. Vigorous growth—which boosts household incomes and government revenues—enhances the incumbent’s survival odds. Thus, dictators have a personal interest in growth. But over time that same growth changes society and the ruling elite in ways that make it more likely the regime will collapse after the dictator is gone. What’s good for the dictator is not so good for his dynasty.

Franco presided over dramatic economic development. But after he died, the Francoist regime fell apart. Indonesia’s “New Order” did not outlast Suharto. In Russia, Putin’s period of dominance has coincided with an increase in per capita income (at PPP, in 2011 dollars) from about $12,000 to almost $24,000, according to the World Bank. Will his country fit the pattern?

We will have to wait to see what happens after Putin leaves the Kremlin. Of course, turnover in economically developed autocracies does not always lead to political liberalization: it did not in Singapore, where Lee Kuan Yew handed over to Goh Chok Tong in 1990, when GDP per capita was already about $14,000. Clearly, some dictators in richer countries have managed to select successors who were as reactionary, skillful, or lucky as they were.

Despite its remarkable growth record, China has only recently entered the income range at which continued authoritarianism is surprising. The country’s so-far smooth transition to the leadership of Xi Jinping might indicate that the Chinese Communist Party has crafted a succession mechanism that is more effective at picking regime-preserving leaders. But, as the former top Chinese official Zhou Enlai said in a different context, it is still too early to say.

So going back to the title of this blog, my point really is a simple one. Given that fact that out right open warfare with Iran is really not an option any more after the Iraq debacle. And now, after the Syrian debacle, engaging a by-proxy strategy of using say the Kurds to cause a civil war is also not an option (would the Europeans want to absorb 10 Million Iranian refugees?).

The only way to topple the regime in Iran is to engage Iran and Iranians – and establish conditions that will render the regime obsolete; and cause Iranians themselves to take on their government and create the political transformations in the country. Becoming Iran’s best friend, may be the worst outcome for the regime in Tehran. And the Mullahs know it. They fear it.

The west now needs to watch its rhetoric vis-à-vis Iran. It’s time to make friends – if only to destroy our enemies. The evidence is very clear. All the data points to it.









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