ABSTRACT

This chapter explores the linkages between democratization and socio-economic development, focusing on the impact of democracy on poverty and inequality. It does so with a slant towards relatively new democracies in the developing world, raising the question of whether or not they have delivered anticipated developmental outcomes. Although democracy has historically been viewed as desirable in itself, most notably with regards to the expansion of political freedoms and civil rights, the trend towards democratization associated with the ‘third wave’ (Huntington 1991) was also influenced by instrumental expectations that democracy would be the means to developmental outcomes such as faster economic growth, poverty reduction and a more equitable distribution of income. Such ideas were promoted in particular by international bilateral and multilateral development agencies in the post-Cold War period. For example, while the Swedish Foreign Ministry asserted in 1991 that ‘Democracy is one of the prerequisites for making advances in development’ (cited in Kirdar and Silk 1994: 102), the UK government's Department for International Development (DfID 2000: 7) subsequently claimed that: ‘Healthy democracies … are far more likely to deliver economic growth for their citizens.’ Yet this conventional wisdom is questionable. While democracy is based on the principle of political equality, most notably ‘one citizen, one vote’, it does not follow that democracy will necessarily lead to a reduction in poverty levels and socio-economic inequalities. It also has to be acknowledged that poverty and inequality are conceptually distinct and have their own dynamic, such that there is the possibility of rising income inequality amidst poverty reduction, as happened for instance in the UK during the early years of the Labour government from 1997 onwards under Prime Minister Tony Blair.