For decades the proposition that “the more well-to-do a nation, the greater the chances that it will sustain democracy” has been conventional wisdom and a centerpiece of U.S. foreign policy. The quote is from the seminal 1959 work of political sociologist Seymour Martin Lipset, “Some Social Requisites of Democracy: Economic Development and Political Development.”
Lipset was the first to offer, on empirical grounds, a correlation between development and democracy. His thesis continues to guide our foreign policy and is often cited by policymakers when discussing how to promote transitions to democracy.
In what has become known as the Lipset hypothesis, the professor theorized that economic development helps to consolidate democracy by expanding levels of literacy, information and media access, expanding the middle class, enabling independent civic organizations, fostering legitimacy and other sociopolitical values. Unfortunately, Lipset is one of those authors that is cited or miscited more frequently than he is read.
In fact, Lipset argued that the political correlate of democracy is a broad list of factors that change social conditions allowing the fostering of a democratic culture. These factors, among them industrialization, urbanization, wealth and education, constitute the conditions, not the causes for democracy. As the title of his article suggests, the relationship between economic development and political democracy is correlational, not causal.
U.S. foreign policy goes awry when policymakers ignore the contingent nature of history, and relegate the complex structural and societal conditions conducive to democracy into a simplistic economic variable. The error is compounded when correlation is mistaken for causality. As shown by Lipset, economic prosperity is often found together with personal freedoms, but that does not mean that economic growth causes the advent of political reforms.
The fact that two events are frequently observed together does not mean that one causes the other as in: The rooster crows every morning, therefore the rooster causes the sun to come up. In logic, the principle that correlation does not imply causation is known as the cum hoc ergo propter hoc fallacy; Latin for “with this, therefore because of this.”
The important public policy implications of the Lipset hypothesis have made it one of the most researched topics in the social sciences. Recent scholarship does not support the claim that economic development brings about democracy. The most that can be drawn from the empirical evidence is that development facilitates the endurance of democracy but it does not make democracy more likely. In our current understanding, the emergence of democracy is not brought about by economic development. And yet, U.S. foreign policy continues to rely on the false causality of the ‘development first, democracy later’ approach.
The outlier evidence flows in both directions with affluent autocracies such as Saudi Arabia and poor democracies such as Costa Rica. In the case of totalitarian regimes, it is clear that economic development does not lead to political reforms as demonstrated by China and Vietnam. In totalitarian societies, elites have too much to lose and the choice is for oppression.
Even in the case of authoritarian regimes the evidence is mixed. The divergent cases of South Korea and Singapore illustrate the limitations of the claim that development fosters democracy. The economies of both countries have prospered to the top layers in the world economy. South Korea seems to exemplify circumstances where increased wealth worked to the later consolidation of democracy. Singapore, on the other hand, turns the thesis on its head as the country remains authoritarian and has turned more repressive with the increase in prosperity.
Our understanding of the relationship between regime type and economic development remains, at best, probabilistic. But we have learned that in former communist societies, it was not economics that led the movement for democracy. In those countries, the essential struggle between people and the elites was about political rights and civil liberties.
Thus, for the promotion of democracy, our foreign policy should come of age and be informed by a better understanding of how citizens adopt democratic values and push for democratic reforms.