Democratic Prosperity

Foundations of Democratic Prosperity 

Faculty & Researchers: David Leblang, Tobias Grossman, Justin Schon

Established democracies have commanded more than half of global for more than a century. This economic strength has been essential to democratic consolidation, both by generating defensive military power and by ensuring popular support for liberal values. But the economic dominance of democracies is beginning to fade. Liberal democracies no longer produce the majority of global income, as the share of economic output from China and other authoritarian countries has grown.22 This shift poses a threat to the global democratic order: economic decline in democracies could generate public resent- ment, strengthening populist leaders who disrespect basic democratic rules and norms.23 Likewise, economic stagnation is prompting democracies to turn inward, turning away migrants and refugees. Several questions follow: 

Economic Policy Tools. What economic instruments can democracies use to promote democracy? Advanced industrial democracies continue to rely on many of the same tools they designed in the aftermath of World War II. Stable exchange rates facilitate vibrant financial markets and cross-border investment; trade agreements promote imports and exports; foreign aid promotes democracies’ political, economic, and strategic objectives. While these tools encourage economic exchange, we know little about how they influence the spread and stability of democratic institutions. 

Institutional Evolution. The rise of China will necessitate rules and regulations to manage competition between state-owned firms and private companies. How will international institutions adapt? Can the global financial architecture and trading system incorporate these new forms of competition, or will new regimes be required? 

Migration and Democracy. What role does migration play in promoting democracy? Some argue that migration helps spread democratic norms and values. Living in a democracy can vividly illustrate to migrants that government need not be corrupt, that it can provide public goods to all, and that civil liberties are attainable. Moreover, migrants may absorb democratic norms of nonviolence and the rule of law. Migrants may then diffuse these liberal values, either indirectly through diaspora networks or directly when they return home, creating a constituency for democracy. The return of Norwegian workers from the United States during the late 19th century, for example, helped precipitate new Norwegian unions and workers’ rights campaigns; likewise, Algerian migrants’ experiences in France in the 1920s provided them with the tools to oppose colonial rule. How can democracies utilize migration as a tool to spread and strengthen democracy? 

 

Sources

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Lin (2016). Moses (2011). Samers (1997). Miller and Peters (2019).