By Eric Vandenbroeck and co-workers

Argentina and Juan Perón

One of the questions that came up this past week following a complaint from a UN official criticizing freedom of the press in W.Europe, is if Sharia law is compatible with the UN charter or leads to democracy? In fact (certainly a simplification) where some have suggested that Christianity is open for 'love they neighbour', Islam is based on "justice" according to ‘Sharia law’ (plus, if  Muslim’s should have the right to request that all of the world adheres to ‘their’ Sharia law, like they currently are certainly doing in case of, a cartoon fury. Several other issues are more important however, in the case of whether democracies around the world will be consolidated, and how they will transform themselves from what they are today.

First, the world is experiencing an increased importance of human capital relative to land and physical capital for two reasons: (1) typical citizens of both developed and developing nations are more educated today than they were fifty years ago; and (2) technology throughout the twentieth century appears to have relied more on the skills and the human capital of the workers (or to have been skill-biased), thus increasing the importance of human capital in the labor market. Although greater returns to human capital may increase inequality in certain instances (e.g., as in the U.S. economy during the past thirty years), it generally helps to close the gap between the elites and the citizens and creates a large middle class in many less developed nations that are nondemocratic or live in unconsolidated democracies. As this gap closes and a middle class emerges, we expect less distributional conflict and more stable democracies not only in societies where political conflict has been between the rich and the poor but also where political conflict is along other lines. The recent past has witnessed many accounts of the ‘end of class warfare’. In fact, maybe with a greater role for human capital, the conflict will be less charged and intense?

Second, we now live in a highly globalized world economy. Greater international economic and financial links may promote and consolidate democracy. Again, conflict between elites and the majority of citizens will remain in the global world economy, but globalization may take the most disruptive weapons from both sides' arsenal in this fight. The citizens do not want to pursue the most populist and redistributive policies, making the elites more secure in democracy. The elites are much more averse to coups and disruptions.

Third, the end of the Cold War implies that the implicit economic and political support that many nondemocratic regimes received has come to an end, making the transition to democracy easier and coups against democracy more difficult (although there is a danger that the war against terrorism might offset the potential benefits of the end of the Cold War). These are at least three factors, that could imply that the future of democracy is brighter than we think today.

At least democracy is pro-majority, even possibly pro-poor, although it is unlikely if free elections would take place all over the middle East (exemplified most recently by Iraq and Palestine) most Muslims would vote against, democraty (Iraq is not a Democraty it’s a Theocratic State). And also elsewhere in democracy, the elites may be powerful even if democracy is generally more pro­majority than nondemocracy. First, the most important sources of extra power for the elites in democracy are their control of the party system and, thus, the political agenda and their ability to form an effective lobby against certain policies. Do we expect the elites to be able to do so more effectively in the future? There are two reasons for suspecting that the answer may be yes. With the increased bright future for democracy, the elites - especially in the current unconsolidated democracies - have to come to terms with living in democracy. In this case, they may as well do their best to influence democratic politics. Therefore, the returns to the elites for increasing their power in democracy may now be greater.

Perhaps more important, as democracy matures, there may be a greater op­portunity for organized groups, which potentially include the elites or certain segments thereof, to become more powerful. The argument that interest groups become stronger over time in democratic societies was first developed by Mancur Olson in his classic 1982 political economy treatise, The Rise and Decline of Nations. Olson pointed out that as time goes by, cooperation and trust form between dif­ferent members of influential lobbies and, perhaps more important, these lobbies more effectively capture the major branches of the government and the political system. In the context of democratic politics, one of the interest groups that may become stronger and come to dominate much of politics is the elite. If so, we might expect democracies to become less pro-majority in time. The fact that new democracies appear to have been more redistributive than mature democracies throughout the twentieth century and the observation that conservative parties have become stronger in many well-established democracies during the past forty years is consistent with this notion. This relates to the Iron Law of Oligarchy formulated by the sociologist Robert Michels in his classic 1911 book, Political Parties. Michels claimed that all organi­zations, particularly political parties - even socialist ones - tended to be captured by whoever ran them; those people then came to be incorporated into the elites. He argued that this meant democracy had little chance of radically changing so­ciety because, at best, it simply replaced one elite with another. In no case would this lead to radical majoritarian social changes. If this law is true, then a natural process of elite capture reduces the radical threat of democracy.

Second, there is also a different side to the increased importance of human capital (including skill-biased technical change) and greater globalization. By re­ducing distributional conflict, these economic developments are weakening many of the organizations that have played an important role in supporting the majority and policies favoring the majority. The organizations losing strength include tra­ditional social democratic parties and labor unions. This is most visible in much of the Anglo-Saxon world, especially the United States and the United Kingdom, where labor unions today are much weaker and the traditional left parties have become generally opposed to income redistribution.

If these changes become more widespread around the world, we may expect the elites and conservative parties to become more powerful and democracy to become less redistributive in the future, especially if new forms of representation for the majority - in both the political sphere and the workplace - do not emerge. Thus, democracy will become more consolidated; however, for those who expect democracy to transform society in the same way as British democracy did in the first half of the twentieth century, it may be a disappointing form of democracy.

Mentioning already Britain, I’d like to next (due to lack of space in what is intended as an introductory article, pick three more countries each of them quite different and look at how democracy developed there. Arguments have been made suggesting that Christian countries historically are more open to democracy , and indeed one could argue that as I  will following Britain, proceed in this case Argentina, with Singapore and  S.Africa, that all of these have been exposed to Christianity to some degree. Yet as we will see, there nevertheless are differences in each of these countries. Of course if this were not just an introductory article, and for someone who would like to write a full length book on this topic, it would be interesting to indeed go through all countries of the world, with conclusions based on region, predominant religions, and so on.

 

Britain

What explains why Britain followed a path of gradual democratization and why democracy was so easy to consolidate in Britain? The parameters – in particular, the nature of political and economic institutions, the structure of the economy, the collective-action problem, and the costs and benefits of revolution – were such that there was a sufficient threat of a revolution in predemocratic Britain and the elites could not defuse those pressures without democratization. They also did not find it beneficial to use repression to prevent democratization. However, this answer is incomplete. We also need to understand how Britain came to have the parameters that it did in the nineteenth and twentieth centuries.

For example in the seventeenth century, a series of political conflicts was won by those interested in introducing political institutions that limited the de jure power of the monarchy. This change in political institutions greatly improved economic institutions. By reducing the risk of state predation, property rights became more stable. De jure political power in the new system was in the hands of people with commercial and capitalistic interests; this led to large induced changes – for instance, in capital and financial markets – that were important for economic expansion.

The reason that these institutional changes arose in Britain appears to be twofold. First, at the start of the early modern period, Britain had political institu­tions that limited the powers of the monarchs more than in other places. Why this was so seems to be the outcome of a complex historical process of the building of dynasties and invasions. Second, significant changes took place in the structure of the economy that greatly strengthened the interest of various groups, particularly capitalistic farmers (the so-called gentry) and merchants, in different economic institutions. Also significant was the early collapse of feudal institutions in Britain. These changes increased the de facto power of these same interests, which critically influenced the outcome of the Civil War and the Glorious Revolution. For example, merchants who became rich from trade in the colonies were able to play critical roles in both conflicts on the side of Parliament.

The outcome of the seventeenth-century conflicts in Britain was a set of eco­nomic institutions that gave property rights to a broad set of people. The result was the ending of the Malthusian cycle and the beginning of modern economic growth. Yet, the structural changes that consequently began (e.g., urbanization and the rise of the factory system) had further implications for the distribution of de facto political power. In particular, they began to make the exercise of de facto power by the poor and politically disenfranchised much easier. The rise in the de facto political power of the poor made the existing regime unsustainable and necessitated a change in political institutions in their favor to defuse the threat of revolution. This was to tilt the future allocation of de jure political power and, consequently, to ensure future economic institutions and policies consistent with the interests of the poor. This is exactly what the process of democratization did. Political tensions were also exacerbated by the rise in inequality, which most scholars believe took place in the first half of the nineteenth century.

Beginning in 1832, the British political elites made a series of strategic conces­sions aimed at incorporating the previously disenfranchised into politics because the alternative was seen to be social unrest, chaos, and possibly revolution. The concessions were gradual because in 1832 social peace could be purchased by buy­ing off the middle class. Moreover, the effect of the concessions was diluted by the specific details of political institutions, particularly the continuing unrepresenta­tive nature of the House of Lords. Although challenged during the 1832 reforms, the House of Lords provided an important bulwark for the wealthy against the potential of radical reforms emanating from a democratized House of Commons. Later, as the working classes reorganized through the Chartist movement and subsequently through trade unions, further concessions had to be made. The Great War and its fallout sealed the final offer of full democracy.

Why did the elites in Britain create a democracy? Many other countries faced the same pressures and the political elites decided to repress the disenfranchised rather than make concessions to them. The problem with repression is that it is costly: it risks destroying assets and wealth. In the urbanized environment of nineteenth-century Europe (Britain was 70 percent urbanized at the time of the Second Reform Act), the disenfranchised masses were relatively well organized and therefore difficult to repress. Moreover, industrialization and the policy of free trade after the 1840s based on Britain’s comparative advantages had led to an economy based on physical and, increasingly, human capital. Such assets are easily destroyed by repression and conflict, making repression an increasingly costly option for the elites. Because capital is more difficult to redistribute, the elites in Britain found the prospect of democracy less threatening and were easier to convince to accept it.

Repression is attractive not just when it is relatively cheap but also when there is much at stake. Our discussion suggests that the changes in economic and po­litical institutions that allowed sustained economic growth to emerge also made democracy much less of a concern to the British elites.
Nevertheless, democracy did bring changes in economic institutions away from those preferred by the elites. In the nineteenth century, economic institutions ­particularly in the labor market – disadvantaged the poor. For example, trade unions were illegal and as late as 1850, British workers trying to organize a union could be shipped to the penal colony in Tasmania, Australia. This practice and many others changed, particularly after 1867 when economic institutions were altered to cater to the demands of the newly en­franchised. Although important for the working of the British economy in the nineteenth century, the implications of these changes were much less damaging to the elites than the potential of the freeing of rural labor markets or the threat of land reform in an economy dominated by landed elites. In fact, compared to the changes in economic institutions faced by the elites in Russia or Austria ­Hungary in the nineteenth century or those in Guatemala and El Salvador in the twentieth century, the changes in Britain were relatively easy for the elites to accept.

What about the promise of redistribution to prevent democratization? The political elites in Britain seem not to have seriously considered mass income redistribution as an alternative to democracy, although they certainly anticipated that democracy might lead to it. Perhaps, as Stephens understood, promises to redistribute could not be believed. It is significant, for example, that the Chartists’ petition that gained the most attention from Parliament was presented in 1848 in the midst of the European revolutions. With such a threat of revolution, the polit­ical elites had to be seen as listening; however, as long as they maintained power, they would only listen as long as the threat was present – the Chartist movement produced only transitory threats. Consequently, perhaps it is not surprising that promises of redistribution to defuse the social unrest were not first on the agenda in Britain.

Finally, why did democracy in Britain consolidate so easily? Our framework suggests that this was influenced by many of the same factors discussed in the context of democratization. It consolidated because coups were too expensive and, in any case, democracy was not radical enough to pose a sufficient threat to the traditional elites. Democracy eventually brought major changes in British society but it took half a century and had to wait until the full effect of educational reforms were manifested. The elites never faced the type of threats common in democratizations elsewhere in the world, such as radical asset redistribution. Under these circumstances, our approach suggests that the elites should have been less opposed to democracy and, indeed, they were.

 

Argentina

Many of the same forces that led to democracy in Britain seem to have been in operation in Argentina. As in Britain, democracy in Argentina was induced by a series of revolts stimulated by economic and financial crises. Also as in Britain, the process of democratization took place in the context of rapidly rising inequal­ity and economic growth. Yet, Argentina democratized with different underlying political and economic institutions than in Britain. The economy relied on agri­cultural exports and the boom in world trade, rather than decreasing, increased the value of the assets of the rich elites: land. Moreover, because the economy was less diversified, it was more suscep­tible to instability and more volatile, creating windows of opportunity to induce political change. The landed elites, although forced to concede democracy, did not like it and were able to undermine it during the crisis surrounding the onset of The Great Depression. In addition, political and economic institutions did not facilitate democracy.

Unlike those that emerged in Britain after 1688, political institutions placed fewer constraints on the use of political powers, particularly those of the president, as witnessed by the actions of Yrigoyen in the 1920s and Peran in the 1940s. With respect to economic institutions, Argentina shared to some extent the legacy of other Spanish colonies that had been based on the exploitation of indigenous peoples. Although this legacy was minor relative to countries such as Bolivia or Guatemala, the underlying set of economic institutions – particularly with respect to access to land – increased the stakes from political conflict.

During the 1930s and 1940s, a highly polarized situation arose in which urban working classes, which dominated democratic politics, aimed to redistribute in­come toward themselves. Such a situation was intolerable to the rural elites and increasingly to the military, which came to adopt a rabid anti-Peronist stance. Given the structure of the economy, the costs of coups against democracy were institutions; at that point, the elites and the PAP will not find it profitable to use repression to prevent democracy.

 

South Africa

Why was democracy so long delayed in South Africa and what triggered its final creation? The historical situation here could not be more different from that in Singapore. The white elites of South Africa had much to lose from democracy that historically would surely have led to large demands for land reform, the redistribution of wealth, and a massive restructuring of economic institutions away from those that benefited the rich white elites.

The state of South Africa was founded as a settler colony similar in many ways to those in North America or Australia. Yet, unlike in the United States, the indigenous peoples did not die off from imported diseases, which led to a situation in which the indigenous Africans became the labor force that the rich white elites could employ cheaply and control with coercive methods. In this environment, the whites not only made no concessions to the Africans, they also even created a philosophy (i.e., apartheid) to justify the unequal distribution of resources in society. Repression was relatively cheap and feasible in South Africa because of the apartheid philosophy and because it was aimed at one easily identifiable racial group.

Yet, the apartheid regime was ultimately unsustainable. As the economy developed, the African majority became more vital to the sustenance of the white economy. They became increasingly hostile to their predicament and politically mobilized. In response, the white regime used intense repression, being prepared to ban, imprison, torture, and murder to maintain its hegemony. Yet, even this could not work indefinitely. The profitability of the apartheid economy gradually declined because of external sanctions and the disruptions caused by repression. Moreover, as the world changed, not only did apartheid become less internationally acceptable after the end of the Cold War, a globalized economy also meant that the rich white elites had less to fear from democracy. As land became less important and mobile capital more important, the threat of a radical African majority dissipated. It addition, the concessions that the white regime made during the 1970s - in particular, the legalization of African trade unions - reduced many of the economic rents that apartheid had created for the whites. This reduction meant that the whites had less to lose from the loss of political control, inequality fell from the mid-1970s onward. Finally, the whites, in conjunction with the ANC, were able to negotiate a structure of political institutions that gave the whites sufficient confidence in a democratic future that they were willing to stop fighting and allow democratization. Nevertheless, there is always uncertainty about what the future holds. For in­stance, the attempt to induce democratic consolidation through constitutional engineering in Zimbabwe has not been a great success. It is interesting that in his assessment of the future for democracy in South Africa, is the lack of a well educated skilled labor force - the consequence of the abysmal state of education in South Africa, and may pose a problem in the near future.

As  for someone who would like to write a full length book on this topic  with conclusions based on region, predominant religions (only then one could come to a more direct conclusion in relationship to Islam), and so on, there are two additional issues that came to mind while researching this introduction. For example, mathematical models of the workings of economy and the form of economic institutions would also be worthwhile to include, plus more important it would be interesting to discriminate among different mechanisms leading to democratization.

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