global_dev_policy-democracy

Democracy is a hindrance to development
A Comparative Study about the Effects of Democracy to Development
in ‘Strong States’ and ‘Weak States’
Gergely Kristof Gulyas
Global Development Politics
Word Count: 3,938

Table of Contents
Introduction.........................................................................................................................3
Anti-democratic development in ‘strong states’: The Developmental State ......................4
Authoritarian vs Democratic: Development in South Korea and Argentina ......................7
Economic Democracy: Micro-level development in ‘weak states’ via participation.......10
Democratic transition and Development in Bangladesh ..................................................13
Conclusion........................................................................................................................16
Bibliography .....................................................................................................................18

Introduction
Democracy is a fundamental value of Western societies and it has been linked, in one
way or another, to the processes of development. There is a consensus in the literature about
the need for individual freedom, which is granted by a democratic state. However, the
relationship between democratisation and development is highly debated; some scholars argue
that economic development is the foundation of successful democratisation, while others say
democracy promotes efficient economic growth, therefore it must be the first step of
development.1 This dichotomy gets more complex, when the power of a given state is taken
into account.
For the analysis of this paper, the terms ‘strong state’ and ‘weak state’ will be used to
differentiate between states based on their power to implement policy. The definition of the
term ‘weak state’ –as it is defined by Susan E. Rice and Stewart Patrick– “countries that lack
the essential capacity and/or will to fulfil four sets of critical government responsibilities:
fostering an environment conducive to sustainable and equitable economic growth; establishing
and maintaining legitimate, transparent, and accountable political institutions; securing their
populations from violent conflict and controlling their territory; and meeting the basic human
needs of their population.”2 Subsequently, ‘strong states’ are countries, which have the capacity
and will to fulfil the criteria above. The question whether democracy is a hindrance to
development must be answered separately to both ‘weak states’ and ‘strong states’.
This two-level analysis will argue that the role of democracy in development is highly
dependent on the status of the state. The first part will look at the more traditional, state centric
approach, when ‘strong states’ aim to promote development. By using the frameworks of the
1 For the former argument, see in World Bank, ‘Sub-Saharan Africa: From Crisis To Sustainable Growth’,1989;
for the latter argument, see in Seymour Lipset, ‘Some Social Requisites of Democracy: Economic Development
and Political Legitimacy’, The American Political Review, vol. 53(1)
2 Susan E. Rice and Stewart Patrick, ‘Index of State Weakness in the Developing World’ (Washington DC: The
Brookings Institution, 2008), p. 3

Developmental State and the Developmental Regime, it will demonstrate that theoretically as
well as empirically successful development is achieved via undemocratic institutions – analysis
of authoritarian state led development in South Korea between 1960s and 1980s and the
development in the democratic Argentinian state in the twenty-first century. The second part
will argue that decentralised, ‘weak states’ benefit more from the promotion of micro-level
economic democracy via participatory development. The argument is based on the
developmental processes of Bangladesh. The paper as a whole, therefore, argues that
democracy is a hindrance to development in ‘strong states’, but not in ‘weak states’.
Anti-democratic development in ‘strong states’: The Developmental State
The most common form of democratic control over the political sphere in the world is
liberal democracy. By definition, “democracy is a system of government with the following
attributes: (a) There are institutions and procedures through which citizens can express effective
preferences about alternative policies at the national level and there are institutionalized
constraints on the exercise of power by the executive (competition); (b) There exists inclusive
suffrage and a right of participation in the selection of national leaders and policies
(inclusiveness/participation).”3 Liberal democracies use this political structure to achieve
liberalist values of individual freedoms. The definition of development itself is equally
important. The Developmental State (DS) literature dominantly identify economic growth and
industrialisation with development. Hence this section will carry on with this narrow
understanding of development and evaluate the role of democracy on this ground.
Subsequently, this section is aiming to prove that democracy is a hindrance to economic growth
and that the most efficient approach, empirically, to successful catch-up development is the DS.
3 Ole Elgstrom and Goran Hyden, ‘Development and Democracy: What have we Learned and How?’ (London:
Routledge, 2002) cited in United Nations Economic and Social Council, ‘Definition of basic concepts and
terminologies in governance and public administration’, 27-31 March 2006, p. 6

This conclusion does not suggest that development can only be achieved via autocratic states,
but it emphasises that the most important state institution is a technocratic and politically
independent bureaucracy. This body in cooperation with a state, which can force politically
unpopular policies on the population in the name of a ‘national interest’-empirically
authoritarian-is the key for successful development in ‘strong states’.
The concept of the DS emerged from the critiques of the neoliberal understanding of
the role of the state in development. The roots of developmentalism date back to the pre-
neoliberal era of mercantilism. The conflict between the national interest and the individual
interest of the ruling elite was the main reason why List argued that development requires a
strong state, which is able to prioritise the national interest.4 The theoretical argument for the
DS is built on the same premise that development can only be achieved via pursuing the national
interest.5 This model, therefore, rejects the neoliberal claim that the market is the most efficient
allocator of resources and development can be achieved the most sufficiently via free market
and a minimal state.
This view over the role of state in development determines the kind of state, which is
desired by the theory. Empirical examples suggest that the DS requires a strong, centralised
state, which is authoritarian. Starting with the rapid development of Japan through the
successful catch-up development of the NICs (South Korea, Singapore, Hong Kong and
Taiwan) the role of authoritarian governments were essential.6 This rejects the neoliberalist
claim that democracy and democratisation of domestic politics is the best form of governance
for development. However, Johnson argues that although there is no necessary connection
4 Friedrich List, ‘The National Systemof Political Economy’,(London: Longmans, Green and Co., 1909), pp.132-
141
5 Chalmers Johnson, ‘MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975’, (Stanford:
Stanford University Press, 1982), p. 36
6 Bruce Cunning, ‘Webs With No Spiders, Spiders With No Webs:The Genealogy Of The Developmental State’
in Meredith Woo-Cummings (ed.), ‘The Developmental State’, (London: Cornell University Press, 1999), pp. 69-
70

between authoritarianism and the DS, it “acknowledge[s] that authoritarianism can sometimes
inadvertently solve the main political problem of economic development using market forces-
namely, how to mobilize the overwhelming majority of the population to work and sacrifice for
developmental projects.”7 Despite Johnson’s hesitant claim about the role of authoritarianism
in the DS, historic experience shows that this form of development has been tied to strong states
led by military dictatorships in which the rationale to develop was provided by a politically
independent bureaucracy.8
It is important to mention, however, that the absolute control of an authoritarian state is
equally disruptive for development as the individual freedom of democracy. The DS literature
emphasised the significance of the concept of ‘embedded autonomy’. The DS is embedded in
the national interest via close public-private cooperation, but this national interest is
autonomous from politics as a result of a ‘Weberian’, meritocratic bureaucracy. While the setup
of a well-functioning state-business relationship is a matter of policy and independent from the
nature of the state, the creation of a meritocratic bureaucracy can be highly problematic in
democracies and its technocratic nature undermines the democratic nature of the state.
As this technocratic bureaucracy –which by its nature undemocratic– was identified as
the most important institution to facilitate economic development in ‘strong states’, the question
remains the same: does it work more efficiently under an authoritarian leadership or in
democracy? It was discussed above that empirical examples suggest a strong relationship
between the DS and centralised, undemocratic leadership. However, the rise of the
Developmental Regime (DR) concept and its practical applications in Latin America calls for
a comparative approach to determine which form of governance is more effective to promote
7 Chalmers Johnson,‘The Developmental State: Odyssey of a Concept’ in Meredith Woo-Cummings (ed.), ‘The
Developmental State’, (London: Cornell University Press, 1999), p. 52
8 Bruce Cunning, ‘Webs With No Spiders, Spiders With No Webs:The Genealogy Of The Developmental State’,
p. 69

economic development. This analysis uses the cases of South Korea (DS) and Argentina (DR)
to determine whether democracy is a hindrance to development.
Authoritarian vs Democratic: Development in South Korea and Argentina
For the success of the DS and the DR, the literature identifies two key requirements,
which are related to the political nature of the state; a meritocratic bureaucracy and a strong
state-business relation both acting in the name of the ‘national interest’. Therefore, the
development of South Korea and Argentina will be evaluated on the basis of these factors in
relation to their (non-)democratic governance.
Although every ‘strong state’ has a well-functioning bureaucracy, the nature and
structure of it influences the outcome of state-led development. The South Korean
administration has the features of a meritocratic or ‘Weberian’ bureaucracy, which assures that
the state is ‘autonomous’. This style requires a set of career civil servants, who are the “best
and brightest” of the society.9 This civil service is not a democratic, but a technocratic
institution; despite their involvement in political decision-making, they are neither elected nor
appointed, as a result not responsible to the people, but hired based on their expertise. It is
demonstrated by the very strict entry requirements to any job in the bureaucracy.10 Moreover,
Korea assured to make jobs in the civil service desirable by providing higher salaries than the
private sector. It has been achieved by a complex system of salary complements and allowances
to encourage efficiency.11
9 Peter Evans, ‘Transferable lessons? Re‐examining the institutional prerequisites of East Asian economic
policies’, The Journal of Development Studies, vol. 34(6), p. 71
policies’, p. 71
policies’, pp. 71-72

In contrast, the Argentinian system during Kirchnerismo lacked this technocratic feature
of a meritocratic bureaucracy. There are several examples when the political leadership
interfered in the affairs of the civil service.12 The government manipulated official inflation
statistics, directly appointed people into key positions for political reasons and so on.13 While
bureaucracies in DS are so apolitical and powerful that “central administrative structures…
[were] powerful enough to impeach even Chiang Kai-shek’s nephew.”14 This demonstrates the
lack of technocratic, thus undemocratic, bureaucracy, which theoretically had a negative effect
on Argentinian development.
The other crucial element to successful development according to the DS and DR
theories is a strong public-private relationship, which assures the ‘embeddedness’ of the state.
In South Korea, this state-business dichotomy was built on an unequal power structure. The
authoritarian state, despite its need for the private sector, had total control over political and
economic conditions in this relation.15 The state targeted national firms as partners for this
cooperation. These chosen ‘national champions’ were in constant interaction with the
bureaucracy, which enabled flexible and apolitical policy outcomes.16 The South Korean
government specifically targeted electronic and telecommunication sector. There were specific
R&D projects financed by the state, which increased the competitiveness of the sector
internationally.17 This competitiveness was utilised in the form of export oriented
industrialisation (EOI), in contrast to the previous practices of import substitution
12 Christopher Wylde, ‘The developmental state is dead, long live the developmental regime! Interpreting Néstor
Kirchner's Argentina 2003–2007’, Journal of International Relations and Development, vol. 17(2), p. 203
13 Christopher Wylde, ‘The developmental state is dead, long live the developmental regime! Interpreting Néstor
Kirchner's Argentina 2003–2007’, p. 203
policies’, pp. 72-73
15 Richard Doner, Bryan Ritchie and Dan Slater, ‘Systemic Vulnerability and the Origins of Developmental States:
Northeast and Southeast Asia in Comparative Perspective’, International Organization, vol. 59(2), p. 344
policies’, p. 76
policies’, p. 77

industrialisation, which dominated Latin American practices, before the debt crisis. It shows –
in the case of Latin America– that an authoritarian government and strong state-business
relations cannot promote development. However, if it incorporates the meritocratic bureaucracy
of South Korea, despotic states stimulate growth.
In contrast, the example of post-2002 Argentina demonstrates that these strong state-
business relations are more disruptive due to the more equal power relations. The era of
Kirchnerismo can be characterised as an era of populist control. Populism led to the destruction
of long term plans to have immediate gains and results, which is often exploited by big
corporations. This creates an incentive for corporate interest to manipulate policy decisions.18
Corruption has been a general characteristic of Argentinian politics since Menemismo.19
Although the achievements of Kirchnerismo in post-crisis recovery are undisputable, the style
of governance of the era contributed to the great level of corruption in the country. Kirchner
strengthen the state’s relation with private enterprises, but to do so, it had to make “deliberate
effort to act unilaterally by emasculating the institutions of horizontal accountability.”20 This
case reveals that, since strong public-private cooperation is an unpopular concept, democratic
states have to use semi-authoritarian tools to effectively build up a state-business cooperation.
This mixture of authoritarianism and democracy increases the level of corruption in the state,
which has a disruptive effect on the power relation between the actors.
To evaluate on the findings, it is important to determine which country is more
developed. South Korea is four times wealthier than Argentina based on latest GDP data. This
difference is not only a result of the Korea’s bigger population, because the GDP per capita in
Argentina has been only a third of the South Korean in the 21st century, it is currently $ 7,737.7
18 Luigi Manzetti, ‘Accountability and Corruption in Argentina During the Kirchners' Era’, Latin American
Research Review, vol. 49(2), p.176
19 Luigi Manzetti, ‘Accountability and Corruption in Argentina During the Kirchners' Era’, p. 177
20 Luigi Manzetti, ‘Accountability and Corruption in Argentina During the Kirchners' Era’, p. 193

compared to $ 24,565.6.21 This wealth is also distributed more equally in Korea than in
Argentina based on their Gini Coefficient.22 In terms of economic development, therefore,
South Korea is unarguable more developed than Argentina. Consequently, democracy appears
to be a hindrance to development in ‘strong states’ compared to authoritarianism.
Economic Democracy: Micro-level development in ‘weak states’ via participation
The creation of a DS or a DR in ‘weak states’ is not a feasible option for development,
therefore their case must be examined separately. The main reason for this division between
‘strong’ and ‘weak states’ is based on the high need of both economic and political resources
to set up a meritocratic bureaucracy.23 Therefore, ‘weak states’ –by definition– have neither the
capabilities nor the will to create or maintain such an institution, hence they cannot follow the
arguably most efficient path of development. This difference, however, provides radical
alternative approaches, which can be built on democratic processes.
The rise of participatory development as a concept opened up a new dimension in the
debate over the role of democratisation in development. The debate had traditionally been
focused on the political system of the state, which promotes a top-down development
domestically. However, in countries, where the state is ‘weak’, these approaches appears to be
equally problematic. The political structure of the state has little effect on development if it has
no power to implement policies on a local level. Micro-level participatory development, on the
other hand, aims directly the local communities, therefore bypasses the issues related to the
characteristics of the ‘weak state’. However, it raises the question whether a decentralised
democratisation on the local level is a hindrance to development as it may have been seen in
21 World Bank, ‘World Development Indicators’, 2014
22 South Korea: 0.3 in OECD, ‘OECD Income Distribution Database (IDD): Gini, poverty, income, Methods and
Concepts’, 2013; Argentina: 0.42 calculated based on its Gini Idex in World Bank, ‘World Development
Indicators’, 2013
policies’, p.79

the case of strong states? Despite the relatively few available empirical cases, the effectiveness
of micro-level democratisation –especially promoting economic democracy– appears to be
greater than reinforcement of existing political hierarchies to promote participatory
development.
There are several attempts to theoretically justify this empirical claim. Most famously
Sen’s capabilities approach links development together with democratisation. He, by his
definition of development, rejects the DS as the best practice of development. It is not only built
upon the deprivation of fundamental political freedoms, but it limits other forms of freedoms
(mainly economic and social) as well, hence it does not promote development.24 In a Senian
understanding of development, it is important, therefore, to broaden the definition of democracy
from the political dimension. Promoters of participatory development emphasis the significance
of the concept of economic democracy. This term incorporates the previous definition of
democracy into the structure of owner- and leadership of private enterprises. By the definition
of Dahl, economic democracy is “an alternative structure that would…help to strengthen
political equality and democracy by reducing inequalities originating in the ownership and
control of firms in a system like…corporate capitalism.”25 Consequently, economic democracy
is equally a mean and end of development.
In the modern, post-communist era, economic democracy moved from a state-led
process to a workers-led one. As one of the key elements in participatory development is to
share best practices, the Global South may look at the existing worker cooperatives in Western
states. This new form of ownership structure exploits the blessings of the market society, but
eliminates the downsides of capitalism. This distinction between capitalism and free market is
essential to understand the role of workers cooperatives in economic democracy. Worker
24 Amartya Sen, ‘Development as Freedom’ (Oxford: Oxford University Press, 1999), p. 38
25 Robert Alan Dahl, ‘A Preface to Economic Democracy’ (Berkley: University of California Press, 1985), p. 4

cooperatives are owned and controlled by its workers, following the principle of ‘one worker,
one vote’.26 As a result, it not only increases the transparency and democratic nature of life on
the micro-level, but it strengthens the culture of democracy in developing countries as well.
Following Sen’s definition of development, the promotion of micro-level economic democracy
via worker cooperatives can be a possible way to promote participatory development and
democracy simultaneously.
Participatory development is the most important tool to promote development and
economic democracy in ‘weak states’. The main tool of participatory development is Rapid
Rural Appraisal (RRA). Arguably, it has become the most cost-effective method to promote
effective development in rural areas, if it is done properly.27 However, the methods of RRA,
where the ideal objective was to share best-practices aiming local issues, must be complemented
by the most radical tool of Participatory Rural Appraise (PRA) to be able to focus on sustainable
local development focused on the empowerment of local people.28 The promotion of economic
democracy need both methods. On one hand, it aims to promote development by increasing the
freedom of local individuals via an originally Western practice and reform existing social
hierarchies. On the other hand, this radical practice must to be customised to meet the needs of
the local community. These methods has been creating a positive developmental outcome in
Bangladesh, where economic democratisation has slowly, but steadily improving the life of
rural communities and transforming the political landscape of the country.
26 US Federation of Worker Cooperatives, ‘What Is a Worker Cooperative?’, 2007
27 Robert Chambers, ‘The Origins and Practices of Participatory Rural Appraisal’, World Development, vol. 22(7),
p. 956
28 Robert Chambers, ‘The Origins and Practices of Participatory Rural Appraisal’, p. 958

Democratic transition and Development in Bangladesh
Bangladesh is often used as a positive example to demonstrate the effectiveness of
participatory development. Despite the poor macro-level development of the country, the
quality of life of the poor, rural population has increased significantly. The annual GDP growth
per capita was vacillating between 7.7% and -15.5% in the examined time period (1960-2015).29
It shows the lack of consistent developmental policy promoted by the state. Bangladesh has the
48th weakest state in the world based on the research of Susan E. Rice and Stewart Patrick.30
Hence, it is surprising, that the country has the same or even better results in raising the quality
of life and reducing poverty than India or other more economically developed states. Average
life expectancy has risen by 10 years since 1990 for both genders, which was 4 years longer
than Indians.31 Moreover, the enrolment rate of girls in primary education doubled between
2000 and 2005 and reached 90%, while female literacy rate rose to 77% by 2009.32 These
achievements reflect on the local efforts by NGOs and other agents of participatory
development via the promotion of cooperative and other good practices. It also shows how
micro-level economic democracy promotes significant economic and social development on
the short- and medium-term.
Cooperative production and the seeds of economic democracy have been present in
Bangladesh since 1904.33 By the time, when participatory development emerged as an
approach, Bangladesh had a well-functioning, two-level cooperative system, linking local
cooperatives to a federal level organisation called Bangladesh Academy for Rural Development
(BARD).34 The role of participatory agent, therefore, was not to build a system of cooperatives,
29 World Bank, ‘World Development Indicators’
30 Susan E. Rice and Stewart Patrick, ‘Index of State Weakness in the Developing World’, p. 11
31 ‘The path through the fields’, The Economist, 3 November 2012
32 ‘The path through the fields’, The Economist, 3 November 2012
33 Mizanur Rahman and Asikha Aktar, ‘People's Participation in Development Interventions through Co -
operatives: A View from Grass- root’, Journal of Co-operative Sector, July-December 2014, p. 47
34 Mizanur Rahman and Asikha Aktar, ‘People's Participation in Development Interventions through Co-
operatives: A View from Grass- root: A View from Grass- root’, p. 47

but to share best practices, empower minorities in the existing power-structure and to widen
this cooperative sector on the local level. One of the most significant force in this process has
been the fair trade movement. Several NGOs, including Serrv and the Fair Trade Group,
provide sustainable economic opportunities to local entrepreneurs mainly as secondary
income.35 This movement helps to eliminate poverty as well as to empower women in rural
areas.
The effects of PRA reflect on the emergence of the Comprehensive Village
Development Program (CVDP). It involved a much broader part of local communities,
including “[f]armers, landless day laborers, fishermen, small traders, transport workers, service
holders, youth, women, etc., were also included as member of the village co-operative
society.”36 This program also opened up cooperative approaches from traditional agricultural
fields to “poultry, livestock, fishery, health, nutrition and sanitation, family planning, education,
environment, social welfare programs and other income generating activities”.37 This
participatory work gave a more democratic nature to the cooperative movement, which provides
the foundations of the bottom-up democratisation process of Bangladesh. As this case shows,
promoting economic democracy via cooperatives has a long-term effect on the political culture
of a state.
Promotion of cooperatives and economic democracy create the culture of political
democracy in local communities. Cooperatives in Bangladesh are controlled democratically by
a one member, one vote system.38 This system increases the incentive of the local population
to participate in the decision making process. This attitude transferred into a high voter turnout
35 Serrv, ‘Bangladesh’
36 Mizanur Rahman and Asikha Aktar, ‘People's Participation in Development Interventions
through Co-operatives: A View from Grass- root’, p. 47
37 Mizanur Rahman and Asikha Aktar, ‘People's Participation in Development Interventions
through Co-operatives: A View from Grass- root’, p. 47
38 Mahbubur Rahman, ‘Social protection and Economic Development Through Co-operative’, Journal of Co-
operative Sector, July-December 2014, p. 38

in federal elections. Between 1973 and 2014, turnout was constantly higher than 50% –in 2008
it reached a record of 85.26%– that is significantly greater than in Western democracies.39 The
cooperative movement in Bangladesh also put a great emphasis on the democratic
empowerment of women. Based on the significant developmental achievements in education,
as it was discussed earlier, “there are 27,873 women's cooperative facilitated 1 million women's
member for their better livelihood.”40 This empowerment of women on the local level, by itself
is a significant developmental achievement, but the fact that female are important political
figures on the federal level as well shows the real volume of the social change led by the
participatory work via cooperatives. Since the first elections of the new democratic era of
Bangladesh, the county was led by only female prime ministers.41 Overall, the democracy of
Bangladesh is well-functioning; it respects and guarantees human rights, have an autonomous
judiciary and active civil society and provides relatively equal opportunities bases on gender,
religion and race.42 These characteristics emerged from the economic democracy promoted by
cooperatives-led development. It still has crucial areas to develop including the freedom of
media, strengthening local political democracy and decreasing the level of corruption.43
However, these are issues, which cannot be influenced by the processes of economic
democracy. The case of Bangladesh, therefore, shows how the promotion of economic
democracy via participatory development and cooperatives have a positive developmental
outcome. Consequently, in the case of ‘weak states’, democracy is not necessarily a hindrance
to development.
39 International Institute for Democracy and Electoral Assistance, ‘Voter turnout data for Bangladesh’, 2014
40 Mahbubur Rahman, ‘Social protection and Economic Development Through Co-operative’, p. 39
41 The Prime Minister’s Office – Government of the People’s Republic of Bangladesh, ‘Sheikh Hasina: Hon'ble
Prime Minister of the People's Republic of Bangladesh’
42 Dalem Barman, Golam Rahman and Tasneem Siddiqui, ‘Democracy Report for Bangladesh’, International
Institute for Democracy and Electoral Assistance, p. 77
43 Dalem Barman, Golam Rahman and TasneemSiddiqui, ‘Democracy Report for Bangladesh’, pp. 77-78

Conclusion
The claim, ‘Democracy is a hindrance to development’ has been evaluated on two
levels; firstly in ‘strong states’ and secondly in ‘weak states’. The analysis of the former
scenario builds on the approaches used in DSs and DRs. In this study, these approaches are
assumed to be the most effective ways of late development, based on a general consensus in the
literature. The examination of the theories of these approaches identified two key elements,
based on the slogan of ‘embedded autonomy’, which are reliant on the nature of the state. The
first one is the need of a well-functioning, preferably meritocratic bureaucracy. This gives the
apolitical, autonomous element that enables states to focus on a ‘national interest’ rather that
corporate or individual interests. The second was the presence of a strong state-business
cooperation. This provides the embeddedness of the state in the current challenges of the
industry and guides policy to solve those issues. The case studies of 1960s-1980s South Korea
and post-2001 Argentina were chosen, because they used DS/DR approaches in practice. The
research recognises the concerns over the differences in domestic and international environment
due to the distance between the cases both in time and space. However, it believes that the
generalised findings are not significantly impacted by these differences. The comparative
analysis suggests, that democracy, indeed, is a hindrance to development in ‘strong states’.
The second part of the research examines the statement from the perspective of ‘weak
states’. This section uses a broader definition of both development and democracy. This is
justified by the ineffectiveness of the traditional, state-centric definitions in micro-level
development. The participatory approach was also chosen to target this localised nature of the
issue. The new definition of democracy was built around the concept of economic democracy,
which, based on the findings of the research, promotes economic, social and political
development simultaneously. The best form of practical implication of this concept was found
to be a cooperativist organisation of the local economy. The effectiveness of this approach was

demonstrated via the case of Bangladesh. The promotion of economic democracy by
cooperatives did not lead to significant growth in macroeconomic indicators such as GDP, but
successfully reduced poverty and inequalities in capabilities and gender. On the long run, it also
led to the creation of a culture of democracy, which explains the state’s effective
democratisation and democratic functioning. Democracy, therefore, is not a hindrance to
development in ‘weak states’ if it is properly implemented on the local level in the form of
economic democracy.
The overall conclusion of the paper is that the evaluation of the role of democracy in
development is highly dependent on the definition of both democracy and development as well
as the centralisation and power of the state. Consequently, there is no general argument for or
against democracy in development, but every case must be evaluated separately.

Bibliography
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Development, vol. 22(7)
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Developmental State’ in Meredith Woo-Cummings (ed.), ‘The Developmental State’,
(London: Cornell University Press, 1999)
Dahl, Robert Alan, ‘A Preface to Economic Democracy’ (Berkley: University of California
Press, 1985)
Doner, Richard, Bryan Ritchie and Dan Slater, ‘Systemic Vulnerability and the Origins of
Developmental States: Northeast and Southeast Asia in Comparative Perspective’,
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1975’, (Stanford: Stanford University Press, 1982)
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(Washington DC: The Brookings Institution, 2008)
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