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Submitted by Riaz khan on
If we look at the issue from an input and output perspective then development outcomes are a function of inputs relating to finance, human resources, logistics, infrastructure, technology, legal and administrative framework etc. These inputs can be provided under a democratic setup or under a dictatorship. Generally such inputs are provided by the civil servants through the budgetary process. Governance plays a major role in determining the outputs and outcomes. The first question to be answered is whether Governance is better under a dictatorship or under democracy. The second question to be answered is whether development under dictatorship is sustainable. The third question is whether form of government is a key variable in determining the outcomes. Shanta is basically running a one variable regression for determining outcomes with a single variable i.e. form of government. Actually Shanta's sample on which he is basing the conclusions is not right. His sample size is only focusing on the less developed countries under dictatorship and countries like India, China and South Africa. If he compares the outcomes/outputs of the developed countries (Europe and US) having democratic systems and the less developed countries with dictatorship and poor governance like Pakistan the results would be different. The democratic countries are doing much better than those under dictatorship. Shanta's argument is only based on a narrowly defined sample size and outliers. If we consider only Africa then most of the countries are not doing well due to dictatorship. Shanta can also argue that a country having access to large natural resources (oil) like Nigeria is doing much worse than countries with no natural resources. Thus the conclusion that can be derived from this limited sample could be that having large natural resources is not good for development. Single variable regression can thus lead to erroneous conclusions. Shanta has also failed to differentiate between genuine democracy and sham civilian dictatorship. Under Shanta’s argument Pakistan would be considered as a civilian democracy but in actual reality it is controlled by other forces. Democracy is a just a facelift. On sustainability the best example is that of the Middle East. In general most of the Middle East is under a dictatorship and it can be argued that the outputs/outcomes are better than the democratic countries like india. However, recent events have shown that the dictatorial institutional structures could not ultimately withstand the forces of democracy and collapsed, leaving the countries in tatters and looking for alternative systems. Dictatorship can be viewed as a private sector firm not publicly listed on the stock exchange (no transparency) while democracy can be considered as a private firm listed on the stock exchange (full disclosure). My feeling is that the publicly listed companies have greater chances of expansion through better access to resources. Many companies go public. Overall Shanta on a limited and selective sample has generalized his conclusion. It would be better to make a list of all the countries in the world and then compare the health and education indicators with the form of government i.e. democracy, dictatorship, civilian dictatorship, monarchy etc. Perhaps he can also add to this analysis why the countries have done well or not done well. Can success be attributed to the form of Government alone? The world started with kings and pharaohs and but over the ages has adopted the path of democracy. If the kings were delivering then every country would now be a kingdom. According to shanta we would be better off under the kings and the British would be better off under a non-ceremonial Queen. It seems shanta’s is saying that since China is doing better than India all countries opt for dictatorship or one party rule. I guess tools of economics are used incorrectly then one can end up with bizarre conclusions