Considering the Experience of China, Can Democracy Be Seen as a Pre-Requisite for Economic Growth

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The relationship between democracy and economic growth has long been debated over the years and the emergence and continued rise of China as an economic powerhouse not only in the Asia-Pacific region but in the world has further intensified this debate considering China’s democratic credentials. This essay will assess the arguments surrounding the extent to which democracy as a political system can be considered to be a pre-requisite to economic growth from a global perspective by mainly using China and other Asian economies as a case study.

Economic growth is the increase in the amount of the goods and services produced by an economy over a period of time. It is measured by the percentage rate of increase in real gross domestic product (GDP). It covers the transition of a country from a simple, low-income economy to a modern, high-income economy.

Democracy on the other hand is a system of government which allows citizens’ participation in the decision-making and governance process of a country. Democracy can either occur through direct involvement of the people or through representative participation. In a direct democracy, there is the direct and continuous participation of citizens in government for example through referendums whereas, a representative democracy is administered through the people either electing or appointing representatives to govern and administer the country on their behalf. For example the United Kingdom has a representative democracy hence people elect Councillors, Members of Parliament and Mayors to make decisions on their behalf. The UN Commission on Human Rights in 2002, declared the following to be the essential elements of democracy: “1.Respect for human rights and fundamental freedoms

2. Freedom of association
3. Freedom of expression and opinion
4. Access to power and its exercise in accordance with the rule of law 5. The holding of periodic free and fair elections by universal suffrage and by secret ballot as the expression of the will of the people 6. A pluralistic system of political parties and organizations 7. The separation of powers

8. The independence of the judiciary
9. Transparency and accountability in public administration
10. Free, independent and pluralistic media”
The implementation of these elements of democracy may vary from country to country, whereas some countries such as the United States, Canada, Belgium and France may be argued to have these elements largely guaranteed by their individual constitutions, countries like China do not have most of these elements effectively in place in its governance structure. Majority of the advanced economies of the world, including the United States of America, Germany, Japan, The United Kingdom, Canada and also most of the emerging economies in developing world such as Ghana, made their initial take-off and fastest growth under democracy. This therefore raises the awareness of economists, students, business analysts, pro-democracy activists, and the general public on the surge of China and the inevitable question on what exactly is the relationship between democracy as a form of political organisation and economic growth.

Rival arguments may suggest that democracy does not necessarily guarantee economic growth and the case of The People’s Republic of China and the former Union of Soviet Socialist Republics (Soviet Union) tend to highlight this notion. Firstly, democracies are not necessarily more efficient economically than other forms of government. Their rates of aggregate growth, savings, and investment may be no better than those of non-democracies. For example, the UK currently has a growth rate of 0.3% Gross Domestic Product (GDP) as compared to China’s 7.7% GDP. With some of the advanced democracies in recent years being ridden with economic instability, for example the Economic Crisis in the Eurozone has brought to a halt the economies of countries like Greece, Italy, Spain and recently Cyprus. Many of...
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