ABSTRACT
This chapter looks at the consequences of democracy for economic development, defined as growth and welfare. It describes three main categories of authoritarian systems: the authoritarian developmentalist regimes, capable of promoting both growth and welfare; the authoritarian growth regimes, which give priority to economic growth; and the authoritarian state elite enrichment regimes, which promote neither growth nor welfare. Many scholars see an incompatibility between democracy and economic growth for both economic and political reasons. Democracy is counterproductive in this regard because it opens the already weak institutions of developing countries to pressure from different groups in society. Welfare measures are perceived as a threat to the elite, who then fight to keep them from being carried out. New democracies capable of weathering severe economic crisis and able to formulate and implement sound economic policies leading to stability and growth will also have the best possibilities for addressing welfare issues and thus for improving conditions for large groups of poor people.
