on the economic origins of democracy

Dædalus Winter 2007 Will Iraq, and subsequently the rest of the Middle East, manage to establish and maintain democratic institutions? Many, and not only detractors of the current Republican administration, are skeptical about the prospects of democracy in the Middle East and, perhaps, in many other economically less prosperous parts of the world, such as sub-Saharan Africa. Underlying this skepticism is a theory, widely shared by academics, policymakers, and journalists alike, that democracy can only stand on the foundations laid by a highly educated population and a ‘culture of democracy.’ Democracy, this theory goes, is 1⁄2rst and foremost about consensus, compromises, and government by the people. How can a society that has not developed a culture of democracy reach consensus and tolerate dissenting opinion? How can an uneducated population refrain from making choices that will ultimately undermine democracy by empowering groups, such as Islamic fundamentalists, with objectives radically opposed to democracy? This theory, which can be traced back to Aristotle and was most eloquently formulated by the American sociologist Seymour Martin Lipset in the 1950s, has such wide acceptance that it is now beyond ‘conventional wisdom.’ Yet it is not the only way to view democratic institutions. The alternative recognizes that most collective decisions a society makes under any regime are at least in part about the distribution of resources. Some groups and individuals will bene1⁄2t, while others will lose out. Democracy is a speci1⁄2c set of institutions for making such collective decisions, distinguished by its relatively egalitarian distribution of political authority. While a dictatorship or a monarchy concentrates collective decision-making power in the hands of a narrow group, democracies give more voice to the majority of the population. This alternative theory then suggests that democracy can flourish in any sort of society as long as the distribution of bene1⁄2ts implied by the democratic process are consistent with the underlying distribution of power. Conversely, it is likely to collapse if such economic and political conditions are not met. Daron Acemoglu, a Fellow of the American Academy since 2006, is Charles Kindleberger Professor of Applied Economics at the Massachusetts Institute of Technology. He is the author of numerous publications, including “Beyond Becker: Training in Imperfect Labor Markets” (1998), “Productivity Differences” (1999), and with James A. Robinson “Economic Origins of Dictatorship and Democracy” (2006).