Are Dictators The Future?

How many governments around the world would use force to try to put down a rebellion? Pretty much all of them. So why does “my” country say it is invading Libya, which is using force to put down a rebellion? Mainly because Libya is not a democracy:

Threatening the use of force against a brutal tyrant, in the name of democracy and human rights, to advance US national security interests and cloaking it in the flag of the United Nations and regional stability—it does sound familiar. (more)

This campaign against non-democracies also fuels the hyperbolic hate and fear of China. How, how, people cry, could a non-democracy out-grow most democracies, when everyone knows that democracy is the future and non-democracies are failed hold-outs of the past?

Actually, non-democracies seem more our future than democracies, because while the two groups have the same average economic growth rates, non-democracy rates vary more, and high rates dominate. Let me explain.

First, democracies tend to play it safe – avoiding risks that lead to both really stupid bad outcomes and really great spectacular outcomes. (See this post by Bryan Caplan.) So, as most folks know, the worst basket-case nations tend to be non-democracies. However, it is less well known that the fastest growing nations, like Ethiopia or Qatar, also tend to be non-democracies.

In the short run, the democratic play-it-safe approach is good for citizens, who tend to be risk-averse. But in the long run, democracy’s descendants fall behind. Whenever you have a portfolio of items with different (log) growth rates, your portfolio’s long run average return is dominated by the portfolio items with the highest average rates. The few items that tend to grow the fastest eventually overwhelm all the rest, even if in the short run their growth rates are all over the map.

So in the long run, the world’s wealth should end up being dominated by the types of nations with the highest average stable growth rates. Even if those nations start out small, or have large year-to-year growth rate variations. And the nations with the highest stable growth rates over relatively long time periods tend to be non-democracies. This suggests that non-democracies will eventually dominate world wealth.

Of course if non-democracies tended to naturally transition into democracies when they got rich, and almost never switched back, then even if most wealth was made within non-democracies, most nations could end up as democracies. This democracy-as-attractor vision seems to be the main hope of democracy fans, and over the last two centuries we have indeed seen lots of movement toward democracy, and much less movement away. This drift to democracy can also be understood as a natural result of farmers who feel more like foragers as they get rich, since forager governance tended to be more democratic.

But this recent drift to democracy need not reflect a fundamental long term law. It might, for example, just be fashion – since the first rich nations chose democracy, maybe other nations wanted to look similar in order to appear high status. So now if non-democracies like China become the richest nations, maybe other nations will try to emulate them instead.

Also, the trend toward higher per-capita wealth may well reverse if, as I anticipate, we get dramatic new techs that can quickly create many human substitutes. This could take the steam out of a rich-folks-feeling-like-foragers push for democracy. Also, high payoffs for reacting quickly in a transition era may also favor a high tail of flexibility, also probably dominated by non-democracies.

So how would futarchy do by this measure? Yes a futarchy might grow faster than a simple democracy or a simple autocracy. But if low democratic growth variance is mainly due to voters wanting to avoid risk, then vote-on-values-bet-on-belief systems would still tend to fall behind king-sets-values-bet-on-belief systems. And in fact, autocrats are probably more likely to take a chance and try a bet-on-belief system.

Futarchy can’t save risk-averse voters from themselves, if they don’t want to be saved. While humans today don’t care much about the future, random human and institutional variation will make some places care more than others. The future will be owned by the high tail of that distribution of caring, which favors any factors that increase caring variance. Non-democracy is one such factor.

Added 9p: The paper Bryan cited clearly shows that democracies have less than half of the (residual) growth variance of non-democracies even after controlling for these factors: GDP per capita, black market premium, terms of trade shock, investment, fertility, life expectancy, govt consumption, govt school investment, male schooling, female schooling, OECD dummy, democracy, democracy squared. This result is not being driven by democracies being closer to the feasible frontier!

Added 8a: The ratio of dictator lifespans to economic doubling times should continue to rise, increasing the timescale over which dictator growth rates correlate.

Added 30Mar: Easterly notes that this might just be because dictators have bad growth statistics.

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  • Buck Farmer

    Are nation-states the right unit of analysis in a world where per capita income is high and technological change decentralized?

    • http://www.hopeanon.typepad.com Hopefully Anonymous

      I think that’s a poor effort at defining the dynamic involved in the US invading Libya. I’m living through this and so it’s interesting to me to observe humanity and its institutions around me positioning and repositioning themselves. I don’t see many innocents, but I do see a lot of cynical agents.

      On the more interesting topic of dictatorships -I think it an interesting analysis. Like others have pointed out (I think I’ve most been exposed to it by TGGP) dictatorship vs. democracy may be a bit of a false dichotomy -national governments of macrosocial entities with populations in the millions need constituencies, and that’s true of both democracies and dictatorships. The theater and calculation of democracy, and how it affects decision-making is an interesting thing to analyze and experiment with it. I think there’s an element of it involving a larger constituency having to own repugnant policy which may make democracies more risk adverse.

      • http://www.hopeanon.typepad.com Hopefully Anonymous

        “I think that’s a poor effort at defining the dynamic involved in the US invading Libya.” Talking about Prof. Hanson’s OP with this line.

      • Doug S.

        We’re not invading Libya, we’re just bombing it. Reagan bombed Libya back in the 1980s, too…

  • Bogdan

    I don’t have a careful analysis to back this up, but I have at least a strong intuition that the successful non-democracies around us right now are successful *because* they are surrounded by moderately successful democracies.

    For example, China’s success seems to be fueled by consumption of its products by already developed western democracies, and most of Quatar’s success seems to be based on oil consumption by other states.

    It is not obvious that once such successful non-democracies *dominate* the world economy they would continue to be successful, i.e. continue to have higher rates of growth.

    • David

      This is definitely worth looking into, but I wonder: Why couldn’t a *democratic* state exploit the lucrative demand in rich democracies? Shouldn’t that demand drive growth equally in democracies and dictatorships?

      I have a much simpler explanation: Democratic states are much richer, so they have less room to grow. I think we’d see this effect most clearly with historical data – for example, if we looked at how democracies did growth-wise in the 50′s, 30′s, etc. And obviously, the answer is that historically, democracies did much better in terms of growth, because democracies are now richer, and they didn’t normally become rich first and democratic second. (Why the heck would we be discussing the growth-inducing power of democracy and *only* look at this year’s growth data?) I suspect that there is a finite toolkit of growth-inducing tricks. Dictatorships haven’t played all theirs yet, while the democracies have. So dictatorships have more room to grow, partly because (as you said), outsourcing and demand from the rich democratic states pulls them up, while the democracies have largely been pulled up already, so they’re too rich to benefit from the outsourced sweatshop revolution.

  • Chris

    The statistical argument is seductive but the type of growth–catch-up versus pushing the frontier–may matter.

    Suppose non-frontier countries grow in part by emulating the business environment and technologies of frontier countries. Democracies may lack the ability to focus on this goal because of things like distributional concerns. Dictators don’t have to worry about this, and there are good and bad dictators, which explains the variance in growth rates.

    But what happens when an autocracy reaches the frontier and has to innovate in order to grow faster than its neighbors? What if the businesses practices and favors that were encouraged and entrenched during catch-up are not conducive to pushing the frontier? Not that there’s anything wrong with continuing to free ride, but if this model were true then autocracies will eventually see their growth rates capped at the rich democracy rate.

    • lemmy caution

      Right. Can dictators do better than democracies in pushing the frontier? I doubt it too.

  • Dog of Justice

    Robin, you are assuming that high-growth dictatorships will continue to perform well indefinitely. This neglects the achilles heel of dictatorships throughout history: the succession problem. All countries eventually get unlucky with their leadership team. If democracies survive that eventuality better than dictatorships, it’s clear what effect that has on the set of countries with high stable growth rates.

    • http://www.ramblingperfectionist.wordpress.com ramblingperfectionist

      Same thing I was about to say. ie the variance in output might be within a country as well, not just across different non-democracies. So the long-term average might be what matters. And worse, shocks probably have intrinsic disutility, too, compared to smoother curves.

  • Wophugus

    Remember when democratic west Germany and Austria struggled to grow after WWII?

    Anyways, could you not explain away a good amount of the difference with the fact that countries that grow quickly tend to do so because they are playing catch up to the first world? That holds down the ability of the first world to grow, most first world countries are democracies, and so that skews the results against democracies when looking for political systems with big possible upsides in the economic growth deapartment. To fact check that you can try comparing first world to first world, in which case it seems that the first world countries with quite fast growth in 2010 were a mix of democracies and dictatorships — Taiwan and Singapore leap to mind.

    I guess my question is whether it might be the case not that china will inevitably switch to a democracy as it grows but that it will inevitably start growing like a democracy as it grows.

    • Phil Goetz

      Singapore is a dictatorship, and it’s not playing catch-up.

      • Phil Goetz

        The term “dictatorship” necessarily refers to a very narrow range of possible governments. The term “democracy” historically, but not necessarily, refers to a very narrow range of possible governments.

        Some of the problems with “democracy” are really problems with “one-person one-vote” democracies. We should think about ways of weighting people’s votes more heavily on subjects that they know more about, or care more about. We should see democracy as a work in progress, not as something the Founding Fathers carved in stone and brought down from the mountain.

        One-person one-vote democracy was well-adapted to the 18th century, when it was possible for one person to be well-informed on all subjects. It is increasingly obsolete, because its basic model assumes that generalists (whether voters or their representatives) can regulate systems that are built by specialists. If technology and knowledge advance, while the standard-issue human neurobiology remains the same, we will increasingly have voters and representatives legislating in areas they have no understanding of.

        The recent problem with bundled mortgage securities is an example. The experts doing the trading were way ahead of the electorate and the representatives. There’s no way a one-person one-vote system can regulate complex financial markets, except by always “fighting the last war” (legislating against whatever went wrong most recently).

      • http://www.uweb.ucsb.edu/~criedel/ Jess Riedel

        Singapore is definitely some good evidence in support of Robin’s claim, which I hadn’t considered.

        It’s not quite fair to call it a dictatorship, though. Wikipedia points out that Freedom house classifies it as “Partly Free”, with a political rights score of 5/10. The Economist ranks Singapore as a “hybrid regime”, the third rank out of four, in its “Democracy Index”: [PDF]. Singapore is ranked as “more” democratic than Russia, Turkey, and Venezuela. Yes, these metrics are crude and subject to debate, but putting Singapore in the same mental bin as Burma is a mistake.

  • Tim

    Not to sure about this. The high growth authoritarian countries have started off on a lower base. Democracies are more likely to be already linked with global markets and have higher capital stocks. Thus they are both nearer the Solow steady state and likely to have fewer unexplored opportunities for increased specialisation. So we should expect high growth for the authoritarians’ economies before they slow as they converge (at least for for the growth orientated dictators, the others will just stagnate). However, in the long run growth can’t be achieved by throwing more capital at it, the country is going to have to push the technological frontier. Here I am not convinced that dictatorships have the edge. Innovation is destructive. The incumbents under threat are likely to have achieved that position by being political clients of the dictatorship and so greater political pressure will be applied to suppress innovative rivals. The upstart’s IP, for example is unlikely to be as rigorously protected as the dictatorship-connected incumbents’. Furthermore, if innovation is allowed to flourish then the country will constantly be creating new groups with economic power. The dictator will have to expend finite resources to make these groups supporters of the authoritarian state or enfranchise them which could end the dictatorship.

    • http://twitter.com/opirmusic Spencer Thomas

      I could be wrong, but it seems like Robin is talking less about specialization-focused innovation, and more “large scale push” innovation. That is to say, the ability of authoritarian nations to push their populations through a variety of policies towards working on larger goals. For a more concrete example:

      here in the US, it was postulated in a paper (read it last year, cannot find the link now) that if we wanted to “get off fossil fuels” quickly, we could take the whole of the Mojave desert and cover it in solar panels. Doing this would employ lots of people, and free up capital that used to be spent on oil for more productive ends (leading to other innovation.) Here, broad respect for property rights, environmental conservation, beautiful vistas, etc. would make such a thing impossible. In China, if they were to set the same or a similar goal, they could do so without worrying about such “pesky” concerns.

      How about other, more extreme ones? Something like “scientists say if we had 10,000 other scientists working on life extension technology for 15 years we could starting living to 500, so let’s just order them to work for the new Life Extension Research Lab.” There’s no way we could force that to happen here, but China might.

      Those sorts of things.

      • http://www.uweb.ucsb.edu/~criedel/ Jess Riedel

        I’m just quibbling with your last example. The way to get scientists to work on life extension is to give them grants to work on it. (Of course, as Robin Hanson convincingly argues, prizes would probably work a lot better.) The US government is definitely able to do this, but chooses not to for various reasons. Yes, progress would probably be even better if scientists intrinsically “wanted” to pursue it, for whatever cultural or intellectual reasons, but those aren’t things China has much better control over than the US. Hypothetical Chinese conscripted scientists are not going to do better than money- and status-driven American ones.

  • Kakun

    It seems more accurate to say that GDP growth slows down as GDP per capita increases (due to, e.g. the great stagnation), and that democracies have higher GDP levels. Less developed democracies (India, East Timor) are experiencing growth rates comparable to those of the dictatorships, as both are freeriding on pre-great stagnation innovations from democracies.

  • nate

    I’m just not sure a case can be made for dictatorships being the future. You argue that, though democracies and dictatorships tend to grow at the same rate, dictatorships rates of growth varying more, and so the fastest growers are always dictatorial outliers. But is that growth sustainable? Sure dictatorships will get lucky, but won’t they also get unlucky as well? There doesn’t seem to be anything ensuring that quick growing dictatorships will continue to grow quickly. If anything, the policies that lead to quick growth will likely be risky ones. It seems like a tortoise and hare situation, and if any economic policy is needed and successful enough to stick around for the future, it would seem to be tortoise style long-term thinking.

    Are nations like ethiopia and qatar the best examples? Qatar, while one of the most developed dictatorships, is growing mostly due to oil money. Its growth seems to be a product of its location, not its style of governance. As a developing county, I would expect Ethiopia to be a fast grower, but it seems as though that growth would begin to slow as it caught up to the developed nations. (Additionally, qatar has some pretty serious human rights issues when it comes to immigrant labor.)

    Perhaps there is something to be said for the wisdom of crowds?

  • http://hanson.gmu.edu Robin Hanson

    Bogdan, Chris, Wophugus, Tim, Kahun, see my added to the post! This isn’t a catchup effect.

    Dog, ante, any positive long term correlation in growth rates is enough for autocrats to win overall.

    • Dog of Justice

      If democracies and autocracies have the same growth rate arithmetic mean, and autocracies exhibit a larger variance, that means autocracies have a worse geometric mean. Long-term growth rate converges in probability to the geometric mean.

      • http://www.hopeanon.typepad.com Hopefully Anonymous

        granted I’m not an IMO medalist like you are, but I don’t follow what sounds like a simple concept. how does larger variance and same arithmetic mean automatically equal worse geometric mean?

      • Dog of Justice

        HA, this may not be directly relevant since my “if” clause does not appear to hold; Robin’s referring to equal average *log* growth now. But yes, my statement was not precisely true. The true statement is that mean-preserving spread reduces geometric mean.

        A simple counterexample to my statement is (where “1″ = zero growth):
        D: 1/2, 2 (arithmetic mean 5/4, variance 9/16, geometric mean 1)
        A: 3/4, 3/4, 3/4, 11/4 (arithmetic mean 5/4, variance 3/4, geometric mean slightly over 1)

    • http://www.uweb.ucsb.edu/~criedel/ Jess Riedel

      (Let me know if I’m being naive here.)

      Ignoring mathematical complications, the basic way we control for things like per-capita GDP, when comparing these governments, is to compare democracies and dictatorships with similar stats. But right now, the US and the EU have most of the tech and concentrated wealth. So we can only compare dictatorships with democracies in the second world.

      So, I would think the only thing the data shows you is that dictators and democracies have your claimed relationship (dictatorships have same average growth but higher variance) when playing catch up. This seems very plausible, since catch up involves farming and industry, not innovation. But we don’t really have an example of a leading dictatorship in the modern era. Historically, the closest thing we have is the Soviet Union, which collapsed.

      I understand the statistical tools are more complicated than pairwise comparison of countries with similar states, but can we really extract information about leading dictatorships from a dataset which has none? I’m not saying the claim is wrong, just that we have some very wide systematic error bars on our data. Therefore, people are not so unreasonable when they rely heavily on their intuition about democracy.

    • Bogdan

      Robin, I didn’t intend my comment to suggest a catch-up effect; if anything, my meaning was closer to the “free-rider ” concept, i.e. that very successful non-democracies are so in an economic environment with many moderately successful democracies.

      I was thinking of those alternately-stable states in iterated games: when most around you “play fair” it’s advantageous to “cheat”, but the advantage dissipates when cheaters dominate. (I think it was an iterated prisoner dilemma, and there were three successive states, but I think you get my drift.)

      Of course, now that I think of it, this wouldn’t necessarily imply that a autocracy-dominated future is not possible, just that it wouldn’t last.

  • http://williamsawin.com Will Sawin

    If a method is capable of producing high stable long-term growth, then after N periods it becomes obvious that method produces high stable long-term growth, and it becomes not risky.

    Risk-averse nations will update on the success of risk-loving ones (especially if they have futarchy) such that the gains to each good risky authoritarian idea will be finite, as will the losses from each bad one.

    If changes over time are independent, law of large numbers dictates that variance effects will be totally dominated by mean effects.

  • Noumenon

    They also need to sort it by population size and density. If you look at the high-income, non-democracies, they’re all teeny tiny and/or extremely heavily urbanized. If you compared them to comparable cities in rich-world countries, they would fare poorly, particularly if you also took into account the poorly-paid, foreign guest workers.

  • http://entitledtoanopinion.wordpress.com TGGP

    Some relevant prior Hanson posts are Uppity China and (more relevant) China Ascendant.

    In response to H.A, Bryan Caplan cites Ludwig von Mises (and I believe Leo Tolstoy) on dictators being beholden to public opinion. Mencius Moldbug argues this is why modern populist/”demotist” dictators fare so poorly relative to the ancien regime who possessed legitimacy by tradition, birthright and supposedly divine sanction. A more modern version of this sort of argument is in Bruce Bueno de Mesquita’s “The Logic of Political Survival” (haven’t read it myself, but listed to his EconTalk podcast). He uses the notion of a “selectorate”, those capable of forming a coalition which can ensure someone retains power, presumably in hopes of attaining private goods in renumeration. Then of course there is the “Iron Law of Oligarchy” which says even our own democracies are similarly more amenable to entrenched interests than the “general public”.

    • http://entitledtoanopinion.wordpress.com TGGP

      I have asked Bryan Caplan, since he has long maintained a “Museum of Communism” and is also an economist, to comment on Charles Kenny’s argument that communism was not bad for economic growth. He has declined to do so.

      • Fred

        Great link, very enjoyable discussion. Does the conversation continue in later posts on that blog or elsewhere?

  • Prakash

    Taking from Noumenon’s, Bogdan’s and Buck Farmer’s points – the comparison basis may not be correct. There have been some huge distortions since nations left the gold standard. The basis of comparison have been floating currencies which really take on a life of their own. What the survey should try to compare is a sustainable unit with another sustainable unit. Large trade deficits are generally not sustainable.

    It is not fair to compare a nation like India or Germany which has to feed, clothe and educate its relatively less productive agricultural workers, compared to Qatar which imports already “finished” labour and food. It’s not possible to get rid of them to make the averages look good.

    China, on the other hand is big, has primary, secondary and tertiary sectors. If and when it grows on its own consumption, then I’ll think very deeply about your point.

  • http://adrianmonck.com Adrian Monck

    The opposite of democracy is not dictatorship…

  • http://abandonedfootnotes.blogspot.com Xavier

    I think this is a case where the within country variation in growth performance dominates over the between country variation. Consider a stylized example where there is a single democratic country (“Mediocristan”) that grows at 3% a year, and two autocratic countries (“Horriblistan” and “Singapore”) that have average growth rates of -10% and 10% a year for the decade 2010-2020. But since autocratic perfomance is more variable, Horriblistan and Singapore switch in the decade 2020-2030, with Horriblistan now growing at 10% a year and Singapore declining at -10% a year, while Mediocristan continues to grow at a steady 3% a year. In this case, after 20 years, Mediocristan will do better than both Horriblistan and Singapore, who will be more or less where they started after 20 years.

    This is just a way of saying that though extreme growth performances are almost exclusively the province of autocracies, it is not the same autocracies every period (consider, for example, China: terrible economic performance under Mao, good economic performance under the post-Mao regime). If growth depends on the probability of good policy, and the probability of good policy depends on the random luck of the draw in dictatorships, average performance for any given autocracy over the long run will still be the same as the average performance of any given democracy. One has to assume that the extreme performers will remain the same over very long periods of time to get something like the result you have in mind.

    Also, there’s fairly good empirical evidence that over the last 100 years or so, rich democracies almost never switch back to autocracy (though nobody knows why). See Przeworski and Limongi for some of the basic patterns. When rich autocracies turn into democracies, they remain democratic (though rich autocracies are also fairly stable, they are slightly less stable than rich democracies, so that over time there are fewer and fewer autocracies, regardless of whether there is a causal mechanism turning autocracies into democracies as countries get rich).

  • Buck Farmer

    To flip the argument around…

    …currently there are a much smaller proportion of humanity lives under a dictator than in all recorded history.

    The arguments you’re making that would allow successful dictatorships to exceed mediocre democracies, doesn’t appear to be unique to our time.

    Unless you can plausibly argue that it is unique to our time…you have to account for the strong empirical trend in the opposite direction.

  • VG

    Robin, you need to read more about the values dimension of societal transformation.

  • http://hanson.gmu.edu Robin Hanson

    Jess, that sounds a lot like wishful thinking.
    TGGP, yes dictators require a base of support. But being smaller, that allows more risk-taking.
    Noumenon, Prakash, it is always possible that more controls would make the effect go away.
    Xavier, your example doesn’t reflect that both groups have the same average (log) growth, and that nations have long term correlations in their growth rates.
    Buck, the transitions were where democracies stole the growth of autocracies.
    VG, like here?

    • http://www.uweb.ucsb.edu/~criedel/ Jess Riedel

      Maybe. I’ve pointed to a single variable (relative GDP rank) along which we are extrapolating–not interpolating–our data, and have given a pretty simple reason why this extrapolation might fail, which roughly agrees with other commenters. The only data point near the failure range (the Soviet Union) suggests failure.

  • http://jurnan.eu Jurnan

    It is an interesting article, but I don’t think it is all that convincing. Non-democracies might have higher growth rates, but who can seriously expect a democratic country such as America to grow with 8-10% a year? It is both irrational and inconceivable, as its economy is a couple of times as large as that of China.

    And therein lies the main point. Non-democratic countries are often countries that are underdeveloped, at least on average. China can grow fast, not because it is undemocratic, but because it has over a billion citizens that are relatively young, a state-apparatus that does not need long deliberating processes and because it still has so much territory to explore and grow in. China’s growth will probably continue in the decade to come, but because it has a lot of economic, not political potential.

    Of course non-democracies can make this process easier and faster, but already we see more dissent in China. They’re spending more money on internal “security and safety” than on their own defence budget, which is over 60 billion dollars. There are a lot of other things that can be done with such amounts of money.

  • Prakash

    Robin,

    Another question. In the AI FOOM debate, you believe that a firm cannot FOOM. Yet here, you’re mentioning that some dictatorship will FOOM. (Dominate economic indices from presently small value). Where in the middle do you change from cannot FOOM to can FOOM?

  • http://twitter.com/afoolswisdom sark

    I don’t see how democracies are more conducive to innovation except in a vague handwavy way: Incumbent autocrats will suppress the rise to power of those bearing new innovations. But why would innovations even frequently allow a specific individual/group to dominate in terms of political power? And political reward doesn’t seem to be what is driving innovation. The benefits of most innovations are mostly free riden upon by non-innovators. And yet the innovators still innovate.

    I suspect there is an unchecked association between innovation and freedom and social mobility which is driving these arguments.

  • Isaac Lewis

    “It might, for example, just be fashion – since the first rich nations chose democracy, maybe other nations wanted to look similar in order to appear high status.”

    I think you are anthropomorphizing nations far too much here – it’s a common metaphor that “x-nation decides this, y-nation does that”, and it seems to lead to this common idea that a very large and only somewhat organised group of people has a single mind and thus acts like a single person. Status might well have an impact on nations choosing how to organise themselves, but when you’re talking about a complicated mix of realpolitik and ideology and some idea of joining the “international community”, it’s really something totally different to a bunch of individual hairless apes fighting over who has the biggest headdress.

    “This drift to democracy can also be understood as a natural result of farmers who feel more like foragers as they get rich, since forager governance tended to be more democratic.”

    I’m only an occasional reader of this blog, but this is the kind of thing that jars whenever I come here (I frequent LW quite a bit, and often get redirected). Yes, the insight that farmer and forager cultures can be observed in 21st century homo sapiens is an interesting and sometimes useful one. However, I often see it cited here as some kind of well-established, iron-clad scientific law, from which more advanced theories can be developed; when to me it just seems like one possible perspective on complicated situations. The idea about “near vs far modes of thinking” is another one.

    That said, I do enjoy reading this blog. I also agree that democracy may be on the way out.

  • Spandrell

    This post is wrong in so many ways it isnt even funny.
    Ethiopia is the future, huh? Qatar an example of governance. Right.
    This is what math applied to social science does to you.

  • ad

    The paper Bryan cited clearly shows that democracies have less than half of the (residual) growth variance of non-democracies

    The paper Bryan cited clearly shows that democracies have less than half of the (residual) growth variance of non-democracies

    On the face of it, this shows that non-democracies have less stable growth rates than democracies. This is not the same thing as showing that any of them has a high stable growth rate.

    Indeed, any country that has had a high growth rate for long enough to demonstrate that that growth rate is stable, should be one of the richest countries in the world by now.

    But of course, most of the richest countries in the world are democracies…

    I would say that a high STABLE growth rate requires a country which has a government which a regarded as legitimate by most of its subjects, that this requires the government to govern with the consent of the governed, and that this currently requires that said government be elected.

    Governments that are widely regarded as illegitimate tend to suffer from revolutions. As in North Africa.

  • Patrick L

    For every ‘successful’ non-democracy there are 12 failed non-democracies. Probably all of those that do succeed are due to local factors unrelated to the dictatorship, such as cultural cohesiveness.

    The problem is that people writing about this stuff are much more interested in the narrative of a small group of people with a lot of power being able to bring about a lot of good change in a society. The literature is overwhelmingly outputting data on ‘successful’ dictatorships, and ‘success’ of dictatorships versus democracies.

    Everything written by Hanson here is a just-so story, but the more interesting story is the one going on in the literature. Why do so many elitists focus on their attention on the very few outliers, and then hold them up as evidence of the flaws of democracy?

  • Psychohistorian

    There seems to be a significant hole in this theory: no sizeable developed nations are run by dictators.

    There’s little doubt that an undeveloped nation can be improved substantially by a dictator who runs things effectively. There’s no evidence that an economy at the cutting edge of per capita productivity can be similarly improved, especially since it is much harder to improve productivity when you’re already at the top.

    Furthermore, if this is possible, democracies could still likely copy successful dictator policies, if those policies proved effective. This wouldn’t fully compensate for an advantage, but it highlights the impropriety of projecting current growth rates indefinitely into the future.

    • Patrick L

      There’s little doubt that an undeveloped nation can be improved substantially by a dictator who runs things effectively

      I have doubts. The data seems to suggest that the effect is negative, or random.

  • richard silliker

    How about a benevolent dictator so we can enjoy the best of both worlds.

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    [dih-mok-ruh-see] Show IPA

    –noun, plural -cies.
    1. government by the people; a form of government in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system.
    2. a state having such a form of government: The United States and canada are democracies.
    3. a state of society characterized by formal equality of rights and privileges.
    4. political or social equality; democratic spirit.
    5. the common people of a community as distinguished from any privileged class; the common people with respect to their political power.

    Piss poor definition.

    Individual elitism is true democracy.

  • David C

    Arguments like this are why I love this blog. I have two caveats. I’m not sure why a long-term correlation in growth rates in dictatorships should be assumed. However, there might be a way of measuring this. I’m also not sure why democracies should be considered risk-averse under a futarchy scenario. It could be people’s beliefs are risk-averse, but their values aren’t.

  • http://www.hunter-gatherer.com John

    Having a permanent Constitution is kind of like having a tyrant. So in some ways democracies try to be un-democratic.

  • nazgulnarsil

    neither, CEO’s are the future.

  • Cryonicsman

    If anybody is interested to see the relationship of GDP/capita growth vs. democracy graphically over time, I set-up a gapminder.org animation.

    link: http://bit.ly/f1YZB7

    Probably different data sets are used than in the study cited by Robin, But it’s interesting to me that although I can see the higher volatility of GDP/capita growth at the low end of the democracy axis from the 1960′s to the 1980′s, the effect seems to disappear starting in the ’90s.

    • http://hanson.gmu.edu Robin Hanson

      Nice graph. :)

  • http://www.cgmoore.com Christopher G. Moore

    The fundamental strength of democracy is that consensus gathering among citizen expressed in an election confers legitimacy on the government that represents all citizens including those who voted for the losing side.

    The weakness of democracy is how it deals with consensus failure. When a substantial number of citizens refuse to recognize the legitimacy of elected leaders, the effectiveness of the government is undermined. In the United States and elsewhere there is a growing trend for citizens to refuse to acknowledge the legitimacy of the winner unless he/she accepts their policies, values or goals. Democracy lacks a mechanism to deal with a vocal minority of citizens who refuse to recognize their legitimacy to govern and do everything in their power to undermine the government.

    Rather than consensus there is perpetual conflict that no election is able to settle. The resulting political distraction this causes offsets the usual benefits of democracy in terms of stable policy goals that innovators and creators can rely on to pursue their goals. In a dictatorship, the repressive powers are effective—at least in the short run—in controlling, co-opting, intimidating the opponents.

    An enlightened dictatorship such as Singapore or Taiwan, or a democracy such as South Korea where consensus is easier to muster and losers less able to prevent effective governing indicate that the issue is far more complex than democracy vs. dictatorship.

    If consensus is impossible and the losers refuse to accept their political loss, is democracy the best political solution to ensure optimal economic outcome? Until democratic states formulate a good answer to that question, others will be inclined to believe the proponents of democracy as the best way to guarantee economic benefit are overstating their case.

    • Hyeongnim

      a democracy such as South Korea where consensus is easier to muster and losers less able to prevent effective governing

      I thought you had a good summary until here.

      South Korea is similarly affected by lack of consensus: the elections are carried out with military policy (North Korea) in mind, while economic/domestic policy is ignored. Then the people hate their politicians for representing elite/business interests.

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  • nw

    A good example is the opening ceremony of the 2008 Beijing Olympics. Let’s see London top that.

  • mjgeddes

    “And the nominees are:
    Robin Hanson, Nick Bostrom, Eliezer Yudkowsky and… a sudden late entry on the ballot…Marc Geddes..
    The voting machines have counted.. envelope please…the winner is…extraordinary…with 100% of the vote..
    first El Prediente of the World… Marc Geddes!”

    Holo-TV shows the first row of the crowd roaring their approval, cheering and clapping with gusto. Camera pans to the row behind.. droids holding laser guns to their heads..

  • Phil Goetz

    The term “dictatorship” necessarily refers to a very narrow range of possible governments. The term “democracy” historically, but not necessarily, refers to a very narrow range of possible governments.

    Some of the problems with “democracy” are really problems with “one-person one-vote” democracies. We should think about ways of weighting people’s votes more heavily on subjects that they know more about, or care more about. We should see democracy as a work in progress, not as something the Founding Fathers carved in stone and brought down from the mountain.

    One-person one-vote democracy was well-adapted to the 18th century, when it was possible for one person to be well-informed on all subjects. It is increasingly obsolete, because its basic model assumes that generalists (whether voters or their representatives) can regulate systems that are built by specialists. If technology and knowledge advance, while the standard-issue human neurobiology remains the same, we will increasingly have voters and representatives legislating in areas they have no understanding of.

    The recent problem with bundled mortgage securities is an example. The experts doing the trading were way ahead of the electorate and the representatives. There’s no way a one-person one-vote system can regulate complex financial markets, except by always “fighting the last war” (legislating against whatever went wrong most recently).

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  • ChristianKl

    Direct democracy isn’t very widespread. Politicians in representative democracies do a lot that not demanded by voters.

    Lack of public support didn’t stop the bank bailout because politicians considered the bailout to be too important.

    When criticizing real world democracies on should actually try to understand how real world political decisions are made.

    The recent problem with bundled mortgage securities is an example. The experts doing the trading were way ahead of the electorate and the representatives.

    The US system is organized in a way that the decisions to regulate the trading where neither made by the electorate nor representatives that the electorate had chosen.

    The SEC is supposed to be staffed with subject experts instead of being stuffed with generalists.

    The Glass–Steagall Act wasn’t repealed because the average person on the street wanted it gone. It was repealed because well funded people with subject matter expertise thought that it limited their profits.

    Added 9p: The paper Bryan cited clearly shows that democracies have less than half of the (residual) growth variance of non-democracies even after controlling for these factors:

    How about controlling additionally for population size.

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  • Andrew

    By that logic, we should all leverage heavily in higher risk shares, since growth variance is deemed to be so important.

    The trend towards democracy and stability is likely due to the fact that stability is preferred once a minimum standard of material wealth is achieved. Transparent and accountable democracies (not necessarily the USA), combined with a market economy are most likely to achieve this.

    Wealthy dictatorships tend to be small countries, therefore more likely to represent their constituents, commit to relatively free market based economies and prevention of corruption.

    Perhaps this is more of an argument for the US to be split up back into individual states, or at least the majority of the tasks of the federal government to be devolved back to the states and local government.
    That way you are likely to have more cohesion within an individual democratic state and therefore less likely to have “consensus failure” as a previous commenter described it.

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