In an autocratic regime, both types of leaders have limited checks on their power to engage in growth-enhancing or growth-limiting policies (Olsen, 1993). In the first case, a large episode of growth acceleration is likely to result, while in the second case, there is a likelihood of a growth collapse. In contrast, a leader in a democracy has strong constraints on his or her power, with a large number of veto players--political actors who have the ability to decline a choice being made--in the political system (North and Weingast, 1989). This does not allow him or her to enact growth-oriented policies with the same degree of freedom as a growth-oriented autocrat. Moreover, for a leader in a democracy, the long-term benefits of growth-oriented policies and reforms need to be balanced against the possible repercussions that such policies may have for the leader politically if these policies and reforms are seen as being unpopular among the electorate or if the reforms lead to a diminution of the rents that vested interests obtain from the prevalence of previous policies and sets of institutions (Krueger, 1974).
Given the possibility of losing power in a future election, leaders in democracies are less willing to take risks in economic policy that may be necessary for rapid growth to ensue, as compared to autocracies. In contrast, leaders of autocracies may be willing to participate in predation in the knowledge that they will not be in power for very long if they have short time horizons and a high discount rate.
Another reason why dictatorship generates growth faster is the decision-making process. The decision-making process in a dictatorship is far shorter and therefore more efficient. Instead of being bogged down by rival parties, the dictator can simply exercise his authority, which is especially important in times of crisis. After the 2008 crisis, for example, China was able to react far quicker and more decisively than the U.S. China's stimulus package as a percentage of its GDP was three times larger than the U.S. fiscal stimulus. As a result, China bounced back quickly, leaving the U.S., Japan, and many other countries behind.
So if dictatorships can actually do well in crises and are well known for short-term growth, why is it that this cannot be translated to long-term economic growth as well?
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Dictatorship's Ephemeral Longevity: Why Its Legacy is Fading in the Long Run
We can be assured that, in some cases, dictators do have a positive impact on their countries. But those impacts are often short-lived. Why? The answer may be as simple as saying that benevolent dictators cannot live forever. Thus, what happens when they die? As long as a benevolent dictator is in power, they may be weakened, if not eliminated. There is a possibility for any democracy or opposition to challenge their authority. This means that when a benevolent dictator dies, another dictator, of whom we cannot be sure will be as compassionate as the last, will hand over the nation on a gold platter. This is what gives rise to the immoral and corrupt dictators that every country wants to avoid.
In democracies, when the government is pursuing the wrong policy or one that is for the benefit of the governing parties at the expense of the government, election cycles are the way to hold politicians accountable. Citizens vote for the party that governs out of pure self-interest out of office. The Kim Jong Il regime in North Korea, for example, would have been voted out years ago. However, in dictatorships, the wrong policies are allowed to persist for long periods of time because the government rules by force.
These explanations alone are sufficient to say that dictatorship is not a recommended form of government. So, why should we still consider the idea of dictatorship as something good?
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Behind the Enigma of Support and Adoration for Authoritarians
