Some autocratic economies can rival democracies, scholars suggest

The growing complexity of the overall picture in global politics, the accumulation of macro-level statistics, and the broadening of data assessment methods have been shattering one stereotype of mainstream economists and political scientists after another.

Kursiv.media recently reported that in just the past few years, economists’ views on industrial policy have undergone a complete reversal. Once condemned, then rationalized, industrial policy has ultimately emerged as a tool more actively used by developed countries than developing ones in recent decades. The paradox is that it was precisely the developing countries pursuing catch-up development models that faced the harshest criticism, even as developed countries were held up as their example.

Similar changes are taking place in perceptions of autocracies, though at a much slower pace — these are regimes united only by the fact that they are not democratic. Until recently, it was widely believed that autocracies were inherently inferior to democracies. A study titled «The Personalist Penalty: Varieties of Autocracy and Economic Growth,» by Christopher Blattman and Scott Gehlbach of the University of Chicago and Zeyang Yu of Princeton University, shows that this view is unfair to all autocracies.

The authors analyzed GDP per capita in 176 countries with different political regimes between 1960 and 2010. Realizing that nondemocratic regimes — autocracies — are in fact highly diverse, sometimes even extremely unlike one another, the researchers attempted to classify them according to different sets of characteristics, including how power is structured and exercised.

In institutionalized autocracies, the ruling party, a corporate military structure or a constitutional monarchy exercises power. Examples cited by the authors include Mexico under the Institutional Revolutionary Party (PRI) and Singapore under the People’s Action Party (PAP).

A personalist autocracy is a regime in which power is concentrated in the hands of a single individual or a small elite. The authors cite the dictatorships of Mobutu Sese Seko in Zaire and Saddam Hussein in Iraq as examples. In their view, Russian President Vladimir Putin and China’s leader Xi Jinping are also drifting toward a more personalist style, having systematically dismantled institutional checks and balances in order to govern through personal influence.

To classify autocratic regimes, the authors used different methods to assess power practices, including the Power Consolidation measure by Gandhi and Sumner, Categorical Personalism by Geddes, Wright and Frantz, V-Dem’s measure of Presidentialism and Henisz’s measure of Veto Players. In total, eight measures of autocracy were applied.

Analysis of economic performance under different regimes revealed that institutionalized autocracies perform no better, but also no worse, than democracies. During the 50-year period studied, the average GDP per capita growth rate was 2.4% for democracies and 2.3% for institutionalized autocracies.

Personalist autocracies are another matter. Their average growth stood at 1.4%. Converting this slowdown into growth potential over 50 years results in a 64% gap in income levels. This is exactly «the personalist penalty.»

«Personalist autocracies appear to suffer from some combination of lower private investment, worse public goods and greater conflict, all of which are consequential for productivity and growth,» the authors concluded.

The main finding is that, when studying the impact of political regimes on economic growth, it is necessary to move beyond the democracy-autocracy dichotomy, since autocracies — like democracies — are complex and contradictory regimes that should be classified and studied separately.

Another dichotomy arises in this case — strong state-weak state. Where the power of the state is not determined by military strength or the ability to accumulate resources, but by how much authority in policy is tied to a specific individual versus how much is embedded in stable mechanisms built into procedures and practices, sustained by the inertia of professional civil servants and a set of long-term state programs. This is a form of «deep state,» but one that operates not only negatively, but also positively in this sense.

In the context of Kazakhstan, these conclusions are interesting in several ways. First, they serve as an important reminder: the outcomes of democratic reforms — a series of reform packages has been implemented in the country since 2019 — are ultimately assessed by the nation’s wealth. Second, while authoritarian modernization can be no worse than democratic modernization, it is crucial not to lose the state as society’s most important institution in the course of reforms.