Democracy after economic growth

By Meuthia Ganie Rochman

NIJMEGEN, Netherlands (JP): Economic growth has been a global topic for a half century. There have been both scientific and political debates on the subject. Over that period not only have social scientists debated economic growth, but also people from various spheres, and their opinions have influenced their respective domains.

In broad terms, the influence comes from three areas.

First, foreign donor countries which pay more attention to economic growth in developing countries and do not expect repression and sharp social disparities in those countries.

The second group is made up of governments of developing countries which focus on power building and economic growth.

The last group comprises democratic proponents that view democracy as a requirement to curb repression and economic disparity.

Results of scientific studies on the relationship between democracy and economic growth conducted since the 1960s have not been conclusive. And without having the validity of their arguments proven one way or the other, the last two groups have followed their own goals.

There is disparity between the parties that argue with political motives and those that argue scientifically. The proponents of economic growth and democracy are eclipsed with anxieties of those involved.

Proponents of democracy view governments as menacing powers. This is because many governments in developing countries are dominated by party or military oligarchies. These dominant powers do not hesitant to terminate popular demands by violent means. Whereas, in these countries democratic demands are often a reflection of economic injustice.

However, governments of these countries frequently feel anxious about only one aspect of the problem, namely the condition of uncontrolled demands which can not be employed in the capacity of the system.

The response from the opponents of democracy has become reactionary: they do not want to pay attention to the positive role of the state or acknowledge the limitations of the economic structure.

One proof of this impasse of dialog is the persistent use of the term "economic growth" by both sides. This term is a remnant of the past when a developing country seriously needed to expand its "economic cake" firsthand for the country's very existence. But many governments made the term the keyword of development by which all development problems were measured.

In response, this approach is viewed as an illusion by democratic proponents that consider economic disparity a result of the approach. Moreover, they view a government as an entity that creates poverty because it disproportionately bolsters only a selected few. They nurture antistatism and antigovernment sentiment.

Among social scientists, the problem of democracy is no longer directly associated with economic growth. The words "economic growth" are considered insufficient for the factual dynamics in society, namely how the economic institution endorses a political change or vica versa.

Instead they use the word "transition" in the mechanism of market economy. On this very point, in their view, an economic and political crisis determines how far democratization and economic growth can be sustained.

A handful of governments in developing countries have had success in overcoming vast inflation and reorganization of their budgets, particularly if they had external financial support available. Such support made it possible for some governments to accumulate capital for a few sectors while at the same time fulfill the basic needs of the majority.

However, most governments fail to adopt the consecutive economic strategy, namely to lead these sectors to efficiency.

On the contrary, these sectors are continuously given "blind subsidies" because of collusion or state economic dependency.

If this condition continues it will generate a crisis in economic and political spheres. Attention must be paid to managing economic and political perpetuity in the period of economic transition.

Democratic demands are very often associated with what occurs in the economic field. The relation between democracy and the economy is not as simple as often assumed, such as in the view that economic welfare will nourish a free-minded middle class.

Critical research on the middle class in various countries has shown that this economic group will side with the party or situation that can guarantee their economic interests. It indicates that the problem of democratization transcends the roles of particular groups in society.

In principle, there are three problems faced by democratization efforts in a country; collective consensus, distribution and institutional interests of political groups. Collective consensus is a national agreement on collective livelihood.

Looking further we find views on the roles of other groups, group diversity, different needs and aspirations, and visions of change. A particular view determines not only forms of authority and distribution, but the limit on conceded injustice.

The view on justice withstands as long society is not fractured as a result of pressure from market economies that work faster than the institutionalization of new social arrangements.

Lessons from some Latin American countries, such as Brazil and Argentina, demonstrate that collective values decay after economic growth.

Democracy is often frightening because if ordinary people can speak out, their demands should be materialized through economic activities. This kind of demand will influence the pattern of distribution. Without any doubt democratization is not popular among strong economic groups. Political demands for these groups create the possibility of "uncertain" demands in the economic sphere.

Although many groups appreciate democratic values, its process confuses economic groups in society. Therefore, it is undoubtful that democratization depends on the orientation of attention of a certain group to develop "democratic" institutions.

For instance, the middle class and capital owners are not interested in freedom of association at ground level, which can create long economic uncertainty. They are more interested in the development of "rule of law". The law can guarantee their property.

On the other hand, for societal groups which are continuously ill-treated, freedom of association is very important. Individual struggles through law channels are very often unreliable. They feel they need something more flexible, within their own reach, as protection.

No sustainable democratization in developing countries exists without a strong state institution, although democracy can not be expected to come through the state. This statement, based on factual cases, is more balance than the views proposed either by the proponents of democracy or by governments that are allergic to popular demands.

From the description above it is clear that a strong state is needed in a transition period of "post-economic growth" democratization. It is because at that period, the issue of contending economic interests are sharper than before. The people begin to perceive negative impacts of imbalanced allocation. A government, through its apparatuses, should be able to formulate goals, solve contradictions, and design the direction of future development.

A strong state needs two prerequisites as authoritative tools of regulation: legitimation as a political power, and institutional power. Legitimation is associated with public trust on how to solve economic problems. Therefore, there should be accountability of public policy and criticism. Certainly, this kind of state should be relatively free of collusion between its officials and business groups.

Globalization may develop negative views on the role of a state. This is because of the obscure view that sectors need to be privatized. Globalization does not diminish a state's role as an authoritative institution for redistribution. The fate of weak economic groups should not be determined merely by the mechanisms of free market.

This will lead to "the privatization of social problems", meaning the fate of individuals would be determined by themselves. Unfortunately, just as the Economist magazine implied in its October edition, the issue of globalization is frequently used by governments as a scapegoat for poor economic policies of the past.

Meuthia Ganie Rochman is writing her dissertation in sociology of politics at the University of Nijmegen.