The Democratic Threshold

In the wake of the collapse of the Soviet Union, futurist and political economist Francis Fukuyama wrote a book in 1992 entitled The End of History and the Last Man, in which he theorized that nearly all nations would soon become liberal democracies. Since all competing global ideologies had been defeated, Fukuyama felt that it was only logical that the people of all nations would soon demand freedom from their leaders and live in peace happily ever after – the end of history. Since 9/11, Fukuyama’s predictions have frequently been derided and ridiculed for such a spectacularly inaccurate and overly-optimistic view of the future.

In light of the democratic revolts currently spreading across the Arab world, Fukuyama’s theory merits reexamination. Was he wrong, or just a few decades premature? Is liberal democracy the inevitable final stage of development, and if so, what kind of conditions are necessary for it to thrive? It’s easy to get swept up in the excitement of the moment – the collapse of communism must have been just as exhilarating to democrats as the (possible) collapse of Arab autocracy is today – but we must bear in mind that the crystal ball is always murky. It is unclear how far the current wave of revolutions will spread, or what the ultimate outcome will be. Charting “the end of history” based on recent current events is never a good idea.

Fortunately, we need not make wide-eyed predictions based upon what we wish were true. There is plenty of statistical data to analyze. The relationship between the economic success of a nation and its level of democracy is very strong. Nearly all countries with a GDP per capita (adjusted for purchasing power parity) of at least $10,000 are at least partially democratic, with the vast majority being full-fledged democracies, as measured by The Economist’s Democracy Index. However, the statistics don’t show us which is the cause and which the effect. Does an affluent society make people more willing to demand their democratic freedoms, or does democracy bring about affluence? There have been many autocracies which have grown their economies very quickly – South Korea in the 1970s, Chile in the 1980s, and China today – but they always seem to democratize around the same time they become wealthy. This suggests to me that an economically empowered people are more likely to demand democratic empowerment; and just as importantly, governments are likely to accede to their demands. In my view, a GDP per capita of $10,000 is a Democratic Threshold. No nation can economically develop past this level without transitioning to at least partial democracy.

But there is one group of countries that is a large exception to this rule. Nate Silver at FiveThirtyEight and Thomas Friedman at Foreign Policy Magazine have both pointed out the toxic effect that oil has on democracy. Indeed, the statistics bear this out. With the exception of Norway and the Netherlands, every oil-rich country (where oil exports account for at least 5% of GDP) is much less democratic than other countries at the same level of development without oil. Qatar may have a higher GDP per capita than the United States, but it is far less democratic. Oil breeds corruption and autocracy.

Taking oil-rich countries out of the mix, I have charted the relationship between democracy and economic development:

A few autocracies are nearing the $10,000 GDP per capita Democratic Threshold. A few others including China are not there yet, but are growing so fast that they will most likely reach it within a decade. Some countries have not reached the Democratic Threshold, but score far lower on The Economist’s Democracy Index than one would expect, given their GDP per capita. Nations falling into these categories are the ones best primed for some serious progress toward democracy. What countries would those be?

Country	GDP per capita (PPP)	Democracy Index	Expected DI	Democracy Deficit
Tunisia	$9,500	2.79	6.15	-3.36
North Korea	$1,800	1.08	4.43	-3.35
Uzbekistan	$3,100	1.74	4.99	-3.25
China	$7,400	3.14	5.89	-2.75
Djibouti	$2,800	2.20	4.89	-2.69
Cuba	$9,900	3.52	6.19	-2.67
Egypt	$6,200	3.07	5.71	-2.64
Laos	$2,400	2.10	4.73	-2.63
Swaziland	$4,500	2.90	5.38	-2.48
Burma	$1,100	1.77	3.92	-2.15
Vietnam	$3,100	2.94	4.99	-2.05
Tajikistan	$2,000	2.51	4.54	-2.03
Guinea-Bissau	$1,100	1.99	3.92	-1.93
Jordan	$5,300	3.74	5.55	-1.81
Fiji	$4,300	3.62	5.33	-1.71

(Disclaimer: Obviously I’m not saying that these countries are all poised to become liberal democracies overnight, merely that there is the potential for substantial progress. North Korea, for example, has set the democratic bar so low that even modest efforts toward democracy would be a major step forward.)

The three Arab states on this list – Tunisia, Egypt, and Jordan – are in the midst of serious challenges to their authority. It’s no coincidence that these three countries, and not other Arab states, are the epicenter of the protests. As I write this, Tunisians have successfully deposed their dictator in the Jasmine Revolution. Egyptian President Hosni Mubarak has declared he will not seek reelection this fall, although his prospects of remaining in power even that long look pretty bleak. Jordan’s enlightened King Abdullah has just dismissed his government and has wisely pledged to institute immediate democratic reforms.

The other countries on this list are an assortment of communist holdouts, rogue nations, and states dominated by a larger power. If China becomes democratic, for example, it could send shockwaves throughout the region and lead to the collapse of North Korea, Burma, and authoritarian regimes throughout Africa, which depend on China for their survival.

Fukuyama’s theory seems to be supported by the statistical evidence - liberal democracy is indeed the end of history. Once countries surpass the Democratic Threshold – approximately $10,000 GDP per capita – they almost invariably develop some form of democracy. Those that make a conscious decision to keep their people impoverished may be less likely to transition to democracy, but economic stagnation can lead to other forms of revolt due to public dissatisfaction. This leads to a paradox for authoritarian governments: They will quickly fall out of favor with the public if they can’t produce a strong economy, but prosperity will ultimately lead to their downfall in the longer term.

I can’t say that I agree with some of Fukuyama’s idealistic, neoconservative foreign policy recommendations for spreading democracy, but I do agree with his idea of “democratic determinism.” Countries without oil are ultimately destined to become democracies as they become wealthy. And even the petro-states have hope. As soon as the world transitions to alternative sources of energy, their economies will no longer be strangled by oil and it will no longer serve as a drag on their freedom. Democracy is coming to a country near you. It’s only a matter of time until we reach the end of history.

PREDICTIONS:

By 2013 – Cuba has made substantial progress toward democracy relative to where it stood at the beginning of 2011.

By 2016 – Tunisia, Egypt, and Jordan have made substantial progress toward democracy relative to where they stood at the beginning of 2011.

By 2018 – China has made substantial progress toward democracy relative to where it stood at the beginning of 2011.

State of the Union Analysis

President Obama’s 2011 State of the Union address was one of the most future-oriented addresses to Congress in recent memory, despite proposing relatively few new ideas. Although the speech consisted mostly of the same policy recommendations that could have been given by any Democratic politician of the last two decades, the things the president chose to emphasize offer some hints to the direction the United States is heading.

I felt that the first half of the speech dealing with domestic policy was far stronger than the foreign policy section. President Obama hit most of the key policy ideas that will dominate American politics in the coming decades, referring several times to “investing in the future.” As America’s infrastructure crumbles and its education system falls behind that of other nations, viewing this type of spending as an investment rather than an expense is absolutely essential for our future wellbeing. President Obama mentioned his National Broadband Plan for the second year in a row. Although it is a welcome step in the right direction, it is woefully inadequate at meeting the needs of a 21^st century economy. If the goals are met, broadband coverage in the United States in 2020 will be about the same as South Korea has today. Additionally, President Obama failed to take a firm stand on net neutrality or wireless carrier oligopolies, which have made the United States one of the least efficient countries in the developed world in telecommunications.

The President touched on our need for a new energy policy, referring to it as our “Sputnik moment” which is absolutely essential for the long-term success of the United States. I was pleased to hear him voice support for nuclear power, and continued subsidies of solar and wind power. The biggest flub from this section was his continued advocacy of biofuels, which have largely been discredited as an economical, environmentally-friendly form of energy. Biofuels sound to me more like an excuse for agricultural subsidies than a serious energy proposal.

President Obama hit a positive note on education, where he signaled a willingness to break with the teachers' unions, which have begun to fall out of favor with many Democrats. He touted the success of his Race to the Top Initiative, which has been the most progressive piece of education legislation in decades, and urged Congress to replace No Child Left Behind with an initiative that encouraged educational innovation. There were a couple areas of education policy that I would have liked to hear the president mention: online schools and charter schools. Although both are in their infancy and have problems which will need to be solved, mentioning them would have fit quite nicely with his theme of investing in the future, which will certainly not be dominated by traditional brick-and-mortar schools giving students standardized curricula.

President Obama’s calls for bipartisan deficit reduction were a bit difficult to take seriously, since neither political party has shown any real interest in the subject. The US structural deficit is only a problem inasmuch as it is larger than our rate of economic growth. President Obama proposed an ill-advised five-year discretionary spending freeze (which doesn’t square very well with his “investing in the future” theme, or the fact that we still have extremely high unemployment) but did not offer any substantial cuts to entitlements. He called for modest income tax increases after 2012, which will certainly be opposed by Republican members of Congress. President Obama’s deficit reduction commission offered a series of centrist proposals and compromises to reduce the size of the deficit, but the president mentioned almost none of them. I think that Obama's deficit reduction pledge was one of those promises that presidents make during State of the Union addresses that are forgotten a few weeks later...and perhaps that is for the best.

The foreign policy section of the speech was mostly boilerplate rhetoric, and provided a very odd contrast to the high-flying futuristic vision of the domestic policy section. The president could have continued the theme of investing in the future (for example, by offering more humanitarian assistance to African and South Asian nations) but instead chose to focus primarily on the same trouble spots that have dominated US foreign policy for a decade: Afghanistan, Pakistan, Iraq, Iran, and North Korea. Although he offered nothing substantively different from his previous policies, he did have the foresight to point out that the real danger of terrorist groups comes not from a repeat of 9/11 or isolated bombings, but from weapons of mass destruction. Nuclear proliferation poses the greatest short-term threat from terrorists, by far.

It was disappointing to hear the president utter not a single word about the chronic crisis in Israel and Palestine, indicating that he has given up on Israeli Prime Minister Benjamin Netanyahu as a potential peacemaker. To make matters worse, Palestinian President Mahmoud Abbas has no legitimacy in the eyes of his people, and lacks the political ability to agree to a compromise. It is time for some creative thinking on the subject. Efforts are afoot at the United Nations to establish a unilateral peace agreement which could be imposed on all parties in the conflict. Although this certainly would not bring about peace in the Middle East immediately, it would change the dialog from prodding both nations to compromise (which they have been unable to do for nearly 50 years), to instead urging them to adhere to the UN-imposed peace plan. Unfortunately, such an effort has no chance of success without at least the tacit approval of the United States. If the next 50 years in the Middle East are to be brighter than the past 50 years, President Obama will need to think outside the box about how to help the region establish peace.

Perhaps the most outside-the-box foreign policy idea the president mentioned was his statement that the United States “supports the democratic aspirations of all people,” in reference to the Jasmine Revolution in Tunisia. Although this notion has been well-established for some time in theory, it has not always been the case in practice, and under the circumstances I was surprised to hear it in the State of the Union address. But supporting democracy in an inconsequential global backwater is one thing. As the Tunisian unrest spreads to key US-aligned countries like Egypt and Yemen, it remains to be seen if the president will support the democrats, although the early signs are encouraging.

Overall, the policy prescriptions in the State of the Union were mostly good ideas that can potentially garner the bipartisan support they will need to become law. The speech itself, while very progressive and futuristic, was somewhat uninspiring. The biggest disappointments came not in what Obama said, but in what he didn’t say. Perhaps the State of the Union address is not the ideal forum for floating trial balloons of creative new ideas, but if Obama is serious about investing in the future at home and abroad, he will need to develop more innovative solutions of his own than what he offered on Tuesday night.