Developing countries may not see democracy as the key to economic development, so donor countries should adopt a business-oriented vocabulary in their governance programs.

At the beginning of January, the Globe and Mail columnist and author Doug Saunders urged Canada to renew its efforts in global “democracy export.” He was alarmed not simply because democratic norms are being “eroded” but because democratic institutions are “collapsing completely.”

Perhaps now is a good time to consider whether it’s truly the case that democracy is disappearing. We should also be interested in the demand side of Canada’s democracy export “business,” asking what methods would make the process more effective. While continuing good governance programming is a good idea, I argue that it is time to drop the word “democracy” altogether from Canada’s political rhetoric and instead frame the issue as an economic argument.

First of all, there are conflicting data about the status of democracy in the world right now. While Freedom House data indeed show a decline in democracy, the Rulers, Elections, and Irregular Governance (REIGN) dataset demonstrates that democracy is the only political regime type that is gaining market share over other forms of governance. We must keep in mind, as well, that many of the world’s illiberal leaders who alarm us were elected democratically.

Moreover, all those involved in communications know that messages tailored to the recipient’s mental landscape are more effective. Does Canada even know what the countries that struggle with development challenges consider desirable or even possible in terms of governance models? Why is it that China’s lack of interest in good governance is more attractive to some recipient countries than Canada’s good governance conditionalities? What is China’s competitive edge?

Donor competition

The words of the Sri Lankan foreign secretary eloquently illustrate that country’s preference for cooperating with China: “They don’t go around teaching each other how to behave.” Doing business with the Chinese does not force local governments to choose between continuing their undemocratic policies and securing an attractive infrastructure investment — they can have both. The entry of China as a donor to Sri Lanka a few years ago, which sidelined Canada as a major contributor, is a perfect example of donor competition.

Indeed, the appearance of new donor states like China and other BRIC countries has led to increased donor competition in developing countries. The Brookings Institution scholar Robert Kagan has said that both China and Russia view democracy promotion in neighbouring countries as “geopolitical assaults because they are so embedded in what they consider to be their spheres of influence.”

The bottom line is that the developing countries may not see democracy as a means to their ultimate goal of economic development. They may not appreciate how democracy could help them to sustainably alleviate poverty and boost income growth. That is why Canada’s democracy promotion rhetoric might find a more welcoming audience if the word “democracy” were removed altogether.

Instead, Canadians should adopt a more business-oriented vocabulary to better explain why it’s bad for the economy to keep some people both power-poor and income-poor. In short, Canada would be wise to use economic arguments in officials’ public speeches about why inclusive institutions are better. This approach would allow Canada to present itself as an equal partner, by drawing parallels with its own experience and by citing empirical studies that prove the point.

Without local support, our work abroad is not sustainable

The fact is that if a recipient country does not support the governance-related programs Canada is “exporting” to them, these initiatives are not going to take root. Ideally the agency for democratic change should stem from within the developing country, while Canada should be merely a broker and facilitator — not an “exporter” of democracy, as Saunders proposes. Furthermore, his claim that Canada should abandon its softness in democracy promotion is not based on international norms or theories about what works in state-building processes and in international development.

When democracy promotion programs are funded by official development assistance or foreign aid, they need to follow OECD guidelines. The Paris Declaration on Aid Effectiveness requires that aid recipients forge their own national development strategies with their parliaments and electorates and that the role of donors be limited to supporting these strategies. Once again: locals own their governance, foreigners only support them. If the local government does not adequately consult its electorate and parliament, Canada can — and should — engage with marginalized populations. One tool for democratic engagement that Canada has not taken enough advantage of is sharing the results of its previous programming with affected populations. Evaluation budgets do not usually allow for broad engagement of beneficiaries at the end of development program assessments. Such engagement would, however, be truly democratic and provide a desirable lesson for power-poor people.

What conditions guarantee success? 

Before promoting democracy, the conditions for permanent democratic turnaround need to be researched and defined. In his book The Bottom Billion, Paul Collier has identified three characteristics that must be improved for a country to have a successful turnaround: its level of income, its level of democratic rights and the proportion of its population with secondary education. A former adviser to Prime Minister Justin Trudeau on foreign policy, Roland Paris, agrees that in postconflict countries, domestic institutions should come before liberalization. He also argues that “authoritarian solutions for war-shattered states should not be rejected out of hand,” especially “if the alternative were more abhorrent — a genocide, for example.”

The need to find other ways to deliver aid while promoting democracy has become even more apparent with the entry of new donors on the development scene. As a nonmember of the OECD, China does not follow the rules and norms set for the traditional OECD donors. The fact that China does not impose policy conditions on recipient countries (other than the requirement to adhere to the One China policy) makes it increasingly attractive to nondemocratic governments. Therefore, instead of framing democracy as an end in itself, Canada should portray its support for political liberalization as a tool for achieving economic success. Instead of talking about “democratization” and “good governance,” Canada could borrow terms from economists like “inclusive institutions” and “capabilities and freedoms.”

In their book Why Nations Fail, Daron Acemoglu and James Robinson claim that inclusive institutions are the key to lasting economic success. They argue that elites, when sufficiently powerful, often support economic institutions and policies harmful to sustained economic growth, and that countries that set up “extractive institutions” are likely to fail in the long run because only a limited number of people will have access to the benefits of economic success. While they acknowledge that, in the short term, it’s possible to achieve “extractive growth” in authoritarian states, in the long term it is impossible to sustain. Consequently, a country’s institutions need to make political changes to allow inclusive participation in decision-making.

The work of the economist and Nobel Prize laureate Amartya Sen offers other useful keywords for Canada’s development-related rhetoric. Sen’s notion of capability and freedom is likely to be better understood in countries of the global South than the Greek-based word “democracy.” Sen views income poverty as a capability deprivation, and he argues that poverty could be eliminated if the governments removed their internal obstacles to free participation in the economy, particularly those that hinder lower castes, women and ethnic minorities.

Again, the promotion of democracy is better framed as a formula for economic growth: for example, if countries exclude 50 percent of their human capital (i.e., women) from participating in the labour market and from political decision-making, their share of the global economic pie will be smaller.

The economists Chang-Tai Hsieh, Erik Hurst, Charles Jones and Peter Klenow have provided empirical evidence that as much as 20 percent of the growth in productivity in the United States over the past 50 years can be attributed to expanded opportunities for women and African-Americans. Lowering discriminatory barriers can be tremendously beneficial to the economy. Greater equality results in better use of available talent and leads to increased productivity and wealth.

The change in rhetoric recommended here is likely to increase Canada’s success in the developing countries and reduce friction between competing donors.

Photo: Shutterstock, by Melodia plus photos.

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