Tuesday, March 20, 2007

Democracy and Well Being

Rizal Shidiq wrote this the other day in the Jakarta Post.

Although it mentioned endogenous growth (don't ask) it brought up an important issue - what role does democracy have to play in economic growth?

Rizal referenced research which shows that democracy doesn't necessarily have much to do with economic growth.

However at their core both freedoms help people to cooperate together. Economic freedom minimises the costs that people have to endure to make a living for themselves and their families. Similarly, with democratic freedom, societies can cooperate together in order to set generally accepted rules of fair play, reducing the friction of individual's interactions (economic or otherwise).

According to Rizal, the links between economic growth and democracy are hard to identify; I suggest, that's because both freedoms fundamentally do the same thing, i.e. improve cooperation.

1 comment:

Denica said...

the link to the jakarta post's article is unopenable ;(