21/6/23, 23:38
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Morton Halperin has served in the
Nixon, Johnson and Clinton
Administrations, most recently as
Director of Policy Planning at the
Department of State (1998-2001).
He is currently a Senior Vice
President of the Center for American
Progress and is the Director of the
Open Society Policy Center. Joseph
T. Siegle is an Associate Director at
the Center for Institutional Reform
and the Informal Sector (IRIS),
University of Maryland. Michael
Weinstein is the Director of
Programs at the Robin Hood
Foundation. He is a former chairman
of the Department of Economics at
Haverford College and a former
economist columnist for The New
York Times where he also served on
the editorial board.
• Public Affairs Programs
• 02/26/2004 Speech Transcript
Universal Democracy? Prospects
for a World Transformed By Larry
Diamond
https://web.archive.org/web/20060628061201/http://carnegiecouncil.org/viewMedia.php/prmTemplateID/9/prmID/5129
The Democracy Advantage: How Democracies Promote Prosperity and Peace
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The Democracy Advantage: How Democracies
Promote Prosperity and Peace
Morton Halperin, Joseph T. Siegle, and Michael Weinstein
Edited transcript of remarks, 03/17/05 Carnegie Council Authors in the Afternoon (Merrill
House, New York City).
• Introduction • Remarks • Questions and Answers
Introduction
JOANNE MYERS: In November 2003, to celebrate the twentieth anniversary of the
National Endowment for Democracy, President Bush delivered a carefully worded
speech celebrating the values of democracy. Although the subtext was to provide an
acceptable rationale for the invasion of Iraq, the overriding message of this speech was
that democracy and development go hand in hand, and that the prosperity, vitality, and
technological progress of a people are directly related to the degree of liberty which they
enjoy in their everyday lives.
In looking back over the past two years, I am sure there are many of you in the audience
who may take issue with the manner in which our President has promoted his vision for
democracy. Nonetheless, recent research, including that of our speakers this afternoon,
has shown that the predominant theme of that November 2003 address has proven to
be a good idea. That is to say, democratic governments have shown themselves
capable of doing a far better job of generating improved standards of living and fostering
social and economic development as compared with their authoritarian counterparts.
In reviewing forty years of hard empirical data from such divergent locales as China and
India, to Bulgaria and Belarus, our panelists will make the case that the argument
"development first/democracy later" is not only wrong, but it has led to policies that have
undermined international efforts to improve the lives of hundreds of millions of people in
the developing world. In the end, they tell us, democracy is not the enemy of
development, but rather its essential ally.
At a time when our national leaders are extolling the virtues of democracy abroad and
foreign policy debates are invariably linked to development issues, it is with great
pleasure that I welcome our panelists, all of whom have thought about these issues in
both theoretical and practical terms, and are prepared to present to us a new vision for
our foreign policy that combines the best of America's democratic and economic values.
Please join me in welcoming our guests, Mort Halperin, Joseph Siegle, and Michael
Weinstein. You will find their bios attached to your guest list today.
Remarks
MORT HALPERIN: Michael, Joe, and I have developed a vaudeville routine in which I
explain why we wrote the book, Joe tells you what we found, and then Michael offers our
policy recommendations.
We worked hard to make this very current, and so we have arranged for the President to
announce this morning that he is sending Paul Wolfowitz to the World Bank. The
Washington Post ran a strange interview in which the reporter accuses of Wolfowitz of
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going to the Bank with the intention of promoting democracy, and Wolfowitz assures him
that that is not true.

I was actually for him until I read that interview. But perhaps we can persuade him that
he really ought to go to the World Bank and promote democracy, because, as you will
see that is one of the conclusions we draw.

We were driven to write this study by noticing what seemed to be a paradox, which
predates the Bush Administration, and which has continued, notwithstanding the change
in rhetoric of the Bush Administration. That is, successive American presidents have
said, particularly since the end of the Cold War, that a major goal of American foreign
policy was to spread or enlarge or enhance democracy, and that our foreign policy was
geared to supporting those who were struggling to establish and maintain democratic
regimes.

Yet if you look at development assistance from the United States, from the international
financial institutions, and even from the Europeans and the European Community, you
find that there is no democracy advantage. That is, democratic countries, in fact, receive
less development assistance than do non-democratic countries. You also find in the
rhetoric, and even the charters, of development agencies a belief that democracy is not
their business. They increasingly talk about good governance as one aspect of
development, but not about democracy. The people who run USAID believe that their job
is to promote development, and not democracy. That permits them to consider good-
governance issues, but not to ask the fundamental question: Is this a democratic society
that we want to support?

Indeed, the international financial institutions have, with one exception, charters which
require them not to take account of whether a country is a democracy, or as it is referred
to in the charters, its political criteria.

Underlying this policy of governments and international financial institutions is a belief

about how democracy relates to development. There is a widely held view that poor
countries need to delay democracy until they develop. Back when I was in college, this
was the Scandinavian view of democracy, that only Scandinavian countries were
capable of being democratic, and that you needed to have a solid middle class before
you could contemplate democracy. The argument went — as presented in the writings of
Samuel Huntington and Seymour Martin Lipset — that if a poor country became
democratic, because of the pressures in a democracy to respond to the interests of the
people, they would borrow too much, they would spend the money in ways that did not
advance development — arguments that the current president of Mexico is making
about his possible successor. These poor decisions would mean that development
would not occur; and because people would then be disappointed, they would return to
a dictatorship.

Therefore, the prescription was, get yourself a benign dictator — it was never quite
explained how you would make sure you had a dictator that spent the money to develop
the country rather than ship it off to a Swiss bank account — wait until that produces
development, which produces a middle class, and then, inevitably, the middle class will
demand freedom, and you will have a democratic government.

That proposition was wrong. We discovered two views on this. One is that nobody
believes that anymore and therefore we didn't have to write the book. But this seemed to
be contradicted by the fact that policy reflected this proposition. The other view was that
the proposition was true, and therefore it was a waste of time to write this book because
if we did it honestly, we would discover that people should wait; the arguments for it
were irrefutable, and therefore this exercise was a waste of time.

We had a hunch that it was not true. We also believed that, for the first time, the data
was available to look at this question empirically and ask the question: Is there a
democracy advantage or disadvantage for poor countries that want to both develop and
solidify their democracy?

From our examination of the data, we came to some policy conclusions.

JOSEPH SIEGLE: Three underlying assumptions have driven this thesis about an
authoritarian advantage and remain very prevalent today:

1) Poor countries do better under authoritarian governments in terms of

economic development, because authoritarian systems are better able to
manage and marshal the limited resources in those countries.

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2) Once these countries reach some middle-income level of development, they
are in a better position to make a transition to democracy, and do so
successfully.

3) Efforts at premature democratization are highly likely to result not only in

underdevelopment, but in civil conflict. They will expose the various fractious
differences that you have in these often ethnically diverse societies and result in
political instability.

I will organize my comments around those three assumptions, and clarify a couple of our
own assumptions as we went into this.

One, our analysis focused on poor countries with per capita incomes below $2,000 a
year. We did this because there isn't any debate that wealthier countries are better off as
democracies, and that wealthy democracies have the most sterling track record at
accumulating assets and wealth over time. The debate is, how do you get there? Should
economic growth come first?

We also tried to be as comprehensive as possible. We looked at all poor countries, as

far back as we could get data, from 1960 until the present. We did this to avoid the
anecdote focus of the debate that has largely driven how we have been thinking about
these issues for the last fifty years, where individual cases were being held up as the
model for how development should occur.

Third, we used a very robust definition of democracy. We wanted to go beyond the

traditional litmus test of elections as being the defining characteristic and look at what
we often assume in our understanding of democracy to be other important qualifying
criteria — namely, that there are institutions of shared power, checks on the chief
executive, and institutions of popular participation, including protections for civil liberties.
We have operationalized our definition using a couple of independent indices: one, the
Polity Index, created by Ted Gurr at the University of Maryland; and second, Freedom
House's annual index on freedom.

With that background, let me turn to the three assumptions and how we analyzed them
empirically.

First, the notion that authoritarian countries do better in their development. In the last
forty-five years of actual performance, there is no evidence that poor authoritarian
countries have grown any more rapidly than poor democracies. If you leave out East
Asia, you see that poor democracies have grown 50 percent more rapidly, on average,
during this period. The Baltic countries, Botswana, Costa Rica, Ghana, and Senegal
have grown more rapidly than the Angolas, the Syrias, the Uzbekistans, and the
Zimbabwes of the world. This is the case even though fully 25 percent of authoritarian
countries don't report their economic information. One of the defining characteristics of
this regime type very much factors into how we can even analyze this information.
Presumably, if those countries were included, the autocratic growth track record would
be even lower.

The records when we look at social dimensions of development — access to drinking

water, girls' literacy, health care — are even more starkly divergent. For example, in
terms of life expectancy, poor democracies typically enjoy life expectancies that are nine
years longer than poor autocracies. Opportunities of finishing secondary school are 40
percent higher. Infant mortality rates are 25 percent lower. Agricultural yields are about
25 percent higher, on average, in poor democracies than in poor autocracies — an
important fact, given that 70 percent of the population in poor countries is often rural-
based.

There are many reasons for this, which we can talk about in the question-and-answer
period. One characteristic that seems particularly prominent is that democracies do a far
better job at avoiding catastrophes of all types. If we look at financial catastrophes for
each of the last four decades and look at the twenty worst performers over each of those
decades, we find that of eighty cases, only five are democracies. Similarly, if you look at
a 10 percent contraction in GDP per capita on an annual basis, you find that poor
democracies are half as likely to experience this sort of acute recession as are
autocracies.

We see similar patterns with regard to humanitarian issues. Refugee crises are almost
invariably a result of the politics in authoritarian systems. If you look at the volume of
refugee flows for the last twenty years, you have to go up to the eighty-eighth case to
find a situation that wasn't an autocracy. This was Sierra Leone in the late 1990s.

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Amartya Sen, the Nobel laureate economist, famously noted that no democracy with a
free press has experienced a major famine.

One of the immediate assumptions made is that this is because of the populist
pressures that democracies face; therefore, they are investing much more in their health
and education sectors, leading to other macroeconomic problems. In fact, that is not
true. To our surprise, poor democracies don't spend any more on their health and
education sectors as a percentage of GDP than do poor autocracies, nor do they get
higher levels of foreign assistance. They don't run up higher levels of budget deficits.
They simply manage the resources that they have more effectively.

So the secret of democracies' success, in many ways, is their consistency over time.
Perhaps there is no better example of this than the United States, which, throughout its
history, has rarely been the fastest-growing country or had the fastest-growing economy
in the world, but, by averaging just over 2 percent of GDP growth a year, it has
systematically accumulated the most massive wealth base of any country in history.

Let me move on to the second assumption, the notion that once autocratic countries
reach a middle-income range, they will make the transition to democracy. Given the
limited growth that we have seen under authoritarian systems, relatively few
authoritarian countries actually reach this middle-income range. In fact, since 1960, only
sixteen autocratic countries have reached a per capita base above $2,000 a year.

Fareed Zakaria's book argues, in a repostulation of the Lipset and Huntington theses,
that we shouldn't be pushing democracy until these countries reach per capita incomes
of $6,000 a year. If we were to do that, of today's eighty-seven democratizers, only four
would qualify as being ready. That would exclude the Baltics, Costa Rica, Poland, South
Africa, and many others.

We are not saying that all poor democracies perform better than all poor autocracies.
Clearly, there are some exceptions. However, even among those poor autocracies that
have grown, they are no more likely to make the transition to democracy once they have
grown or once they have reached a middle-income status than they were when they
were poorer. As we look at the exceptionality of these growers, most of which are in East
Asia, we need to ask why they are so different from other authoritarian systems and
what is distinctive about them. We should then compare them against the sixty-five to
seventy authoritarian countries that have had abysmal development track records to
keep their performance in perspective — to learn from it, but to recognize that it
represents a poor basis for a development model.

The third and final assumption is the notion that premature democratization is a recipe
for instability. We find empirically no strong basis for this reasonable hypothesis. What
we do see, borne out in much of the conflict literature of the last fifteen years, is that the
prevailing factor that influences conflict — and today most conflict is civil conflict — is
poverty. Poor countries are more likely to be in conflict than wealthier countries.
Countries of per capita incomes below $2,000 have been in conflict, on average, one
year out of five since 1980. Above $4,000 a year, it is one year in thirty-three.

When you control for that and you look at countries that are going through political
transition, you find that democratizers are no more likely to be vulnerable to conflict than
are other poor countries. Since the end of the Cold War, they are somewhat less likely to
be conflict-prone. In sub-Saharan Africa, where most of the civil conflict has taken place
in recent years, democratizers have been half as likely to experience civil conflict as
have other poor countries in that region.

All of this has important ramifications for international security issues. Thirty percent of
civil conflicts spill over across their borders. Civil conflict in one country tends to reduce
the per capita growth levels among neighbors by, on average, a rate of 0.5 percent a
year. This increases the likelihood of political instability and economic turmoil. Poor
countries with weak governance structures are inherently better locations for
international terrorist organizations to set up shop and conduct their operations.

In sum, the three core assumptions that have underpinned the authoritarian advantage
thesis over the years aren't borne out through our empirical analysis. What we find is
that the form of government that is in place in the developing world has a huge
difference on the development performance realized, and that by holding onto these
notions that we should defer democracy until some later point, we are, in effect,
perpetuating underdevelopment and higher levels of political and sectarian conflict, as
well as deferring the point at which people can govern themselves.

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MICHAEL WEINSTEIN: Our book offers seven major policy recommendations. I would
like to focus on the three most important suggestions.

1) Whether aid is bilateral, multilateral, quadrilateral, let's give it to the

democracies and democratizers, and not to poor autocracies.

Some people will object, "How could you not help poor people who live in
Zimbabwe?"

Our answer would be the following: A poor person is a poor person. I don't have
any particular reason to want to favor one set of poor people over another. Since
the amount of aid we give to help the poor, particularly in the United States, will
not reach all the poor people in the world, why not give money to the countries in
which there is a chance that the aid will help poor people, rather than wasting it
on countries and governments that don't have a prayer of helping their poor? I
have no problem refusing aid money to Zimbabwe, when we know the money
will be wasted on a corrupt and inept government, when we could give it to an
"ept" and non-corrupt government — or at least a democracy — and have a
much higher probability that that assistance will actually do what we want, which
is help the poor. Why not favor democracy when you have a choice?

When we get to the point where we cure all poverty in poor democracies, then
we can have a conversation about what the best policy is toward aid for non-
democracies.

2) There is a powerful argument to be made for not having the U.S. Treasury
dominating where aid policies go. So we recommend that aid flow out of a
coordination panel, where you have the Secretary of State, the head of USAID,
and the Treasury join together to make important aid decisions. The point is to
have the State Department's political and democracy issues on a level playing
field with green-eyeshade economists counting up dollars and cents.

3) The third policy implication is somewhat more novel. We argue that

development policies have been anti-democratic. They have trampled on the
incipient groups, such as civil groups inside poor countries, anmd run roughshod
over them to force countries to follow policies drawn up by Washington D.C., and
not by the countries involved. Democracy can be a victim in lots of silent ways.

The analogy is the environment. As anybody who walks into Economics 101 learns early
on, if you have a silent victim, it will be victimized. In this country, when we wanted to
take the environment into account, we passed a law that said that when Congress does
anything interesting, they had better do an environmental impact statement; they had
better tell the builders that they are about to trample on the environment and by how
much. Environmental impact statements became deeply embedded into federal
policymaking, and in many state and local policies.

We advocate the same for democracy. It is so clearly connected to growth and

prosperity that we say, highlight it, so that whenever a government like the United
States, an agency like USAID, a bilateral or multilateral organization begins to
contemplate aid policy, it would issue a democracy impact statement. Give us a good
prediction of how the policy as proposed and implemented will trample on democratic
forces within the poor countries to receive the aid.

JOANNE MYERS: Thank you very much. I would like to open the floor to questions.

Questions and Answers

QUESTION: Would you address the question of why democracy helps development
more than authoritarian governments?

JOSEPH SIEGLE: We synthesize our response into three major categories. The first is
the notion of shared power. In democracies, you have mechanisms of both vertical and
horizontal accountability. Horizontal accountability reins in a chief executive who may
want to pursue a radical course of policy much more than would take place in an
authoritarian system. Vertical accountability gives incentives for any political leader to try
to appeal to the median voter. You have moderating effects through those checks and
balances.

The second is the idea of openness that is a key defining criterion of democracy as
opposed to autocracies. With more openness, you get better information that is directed

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into policy decisions than you do in authoritarian systems. You must consider unwanted
information in a democratic system, where it can be more easily excluded in
authoritarian structures.

When things go wrong after a decision is made in democracies, an alarm bell sounds
more quickly than in authoritarian structures. Political leaders are pressured to reverse
or adjust course, so that the negative effects of decisions are reined in, whereas in an
authoritarian system, these problems tend to continue for much longer, leading to crises.

The other dimension of openness gets into a discussion about efficiency of markets.
When there is more symmetry on all sides of a market, buyers and sellers, you usually
get more efficiency, more willingness for people to participate. That doesn't happen if
people are unsure if they have all of the facts on the table.

Openness also contributes to higher levels of transparency and lower levels of

corruption. Data show that corruption cuts heavily into GDP growth on an annual basis.

The third point is adaptability. Democracies not only have a self-correcting mechanism,
but also mechanisms for a systematic means of changing ineffective leadership. This
allows for a stable transition to a new policy framework that might allow for a more
effective process of addressing the problems that a country is facing, one that is
appropriate for its particular circumstances. Because of this process of succession, you
don't have the same instability in democracies that heavily cuts into growth in other
systems, either because of the political uncertainty or the civil conflict that results.

MICHAEL WEINSTEIN: We see powerful differences between the economic

circumstances of a democracy versus a non-democracy in that democracies don't suffer
famines. This is related to the means of shared power and the forces of resistance that
can bubble up in a democracy, but not in an autocracy. Democracies don't fall off the
edge of the cliff and hit bottom in the way autocracies do.

QUESTION: The administration has been working with the Millennium Challenge
Corporation now for several years. How do you judge it, and where is it going?

MORTON HALPERIN: We are big fans of the Millennium Challenge Account. In my day
job, I work for the Open Society Institute running their lobbying program in Washington.
We have been lobbying hard for the creation of the Millennium Challenge Corporation,
for funding it, and are working with the corporation to have it fulfill its intended purposes.

Because we lobbied based on the results of this book for changes in what the President
originally sent up, the Millennium Challenge Corporation, as it is structured, very closely
follows our recommendations. It has objective criteria for countries which are eligible,
based on indices produced outside the U.S. Government. They relate to good
governance, including democracy, to addressing the basic needs of the people, such as
education and health. These policies are all consistent with what we found to be
important.

The word in Washington is that it is getting off to a slow start. It hasn't yet disbursed any
money. If you look at the history of new institutions and you consider all the
institutionalized opposition, it is remarkable that it is up and running at all. It has
identified some countries and begun negotiations with them. In the end, it will be a very
important institution.

We would like it to be multilateralized, for the United States to encourage the G8

countries, the European Union, and the World Bank to adopt similar criteria. I would like
to see us reach the point where countries qualify for all of these entities with one single
agreement, so they don't have to negotiate twelve different times. The money would flow
in, consistent with a plan that the country owns; the money would go, as in the
Millennium Challenge Corporation, to private groups and local governments, as well as
to the national government. We would also give money, as the MCC can, to countries
that almost meet the criteria, to help them figure out how to get there.

One of the reasons why this is the right way to go is that we want to use development
assistance, even though it is very small, to create an incentive towards democracy of the
kind that the European Union has created in Europe. The countries of Central Europe
have had a powerful incentive to democratize, because they want to get into the EU to
protect democracy or to improve their standard of living. By making democracy an
essential criterion for membership, the EU has encouraged countries, whether it is
Ukraine or now Belarus, to become democratic.

We need to offer the same incentive to countries in the rest of the world. The way to do

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that is to channel development assistance through a process like the Millennium
Challenge Account, but to channel not just the U.S. development assistance, but the
development assistance from the rest of the world, in a single, unified way.

QUESTION: The perception remains that some democratic countries, by their foreign
policy and their geopolitical outtake of the world, are not providing for prosperity,
democracy, and stability.

My second question is related to Latin America. A number of countries that went down
the democratic path ten years ago are today facing huge challenges of democratic
rollback because of corruption, instability, and lack of institutional strength. Because of
corruption, these democracies are not able to deliver. If you look at the last
Latinobarometer poll, where most of those polled say that, yes, they support democracy
as a form of government, the moment you ask the question, "Are you willing to give up
some of the virtues of democracy to get food, the services you need, public security," a
sizable portion of the population is saying, "I'd rather give up that to get some
deliverables."

Did you tackle either one of these issues in the book?

MORTON HALPERIN: I think that is a false choice. The book demonstrates that you are
much less likely to get the desired amount of prosperity if you turn away from
democracy. Yes, many democracies have not delivered as much as people had hoped
for, but the way to get what you want is to strengthen the democracy to deal with the
issues of corruption and inequality, and not to think that if you turn away from
democracy, you will do better. The evidence is overwhelming that you will do worse.

JOSEPH SIEGLE: We don't argue that all democracies have performed better. Some
have struggled. We do talk about Latin America because it is a fascinating, evolving
process that is at the epicenter of many of these questions. Despite all of the rancor
regarding the region, only three countries in Latin America have lower per capita
incomes today than they did in 1990. Incomes are 25 percent greater today than they
were in 1990, on average, in Latin America.

With more open societies, people talk more often about problems, about corruption, and
about their disgust with the failings of their political leaders. It is not that the corruption
and abuses are new. There is an inverse relationship in these early stages of transition,
where you have a period of worsening perceptions, even though the actual processes
are improving. Transparency is a necessary prerequisite.

MICHAEL WEINSTEIN: There is certainly an analogy between Latin America and

Eastern Europe, say, after 1990. Economics invariably bites and produces less success
than was promised. The result is a backlash, as we have seen in Eastern Europe, where
there has been an ebb and flow of political orientations and expectations. Latin America
is a classic case in point.

MORTON HALPERIN: What I found most surprising is how infrequently poor economic
performance leads to the end of a democratic regime. That occurs much less frequently
than I had feared and assumed.

We have an obligation to help countries that have taken that path to succeed in
democracy. Part of that is more assistance. Part of that is backing off the Washington
consensus of the advice we give these countries about how to develop, which turns out
to be a model that no country has ever succeeded in following.

QUESTION: Democracy does work, mostly because people who couldn't do their thing
before can suddenly do their thing. The statistics suggest that large amounts of aid from
the World Bank and USAID go from our government to theirs, and that somehow this
creates more democracy. In fact, it does not. It merely leaves in power or puts back in
power the very people who were running the government ten years ago, but now are
called Republicans or Democrats, or whatever the Eastern European equivalent is,
instead of Communists. The growth of these countries will not come from those people.

Where democracy can be helpful, though, is at very low levels of the economy. In
Armenia, we were giving tiny bits of working capital to people who were living in hovels.
With that working capital, they were able to expand very small businesses. You get a
welling up of economic activity from the depths, which can be significant, both for
democracy and economic growth.

A young man brings in television sets from the West and repairs them in Romania and
then turns around and sells them again locally, creating hundreds of jobs. That under the

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Communist Party you couldn't have done that, but under a more democratic system you
can, is where the promise lies.

We need to change the direction of aid, from giving money government to government
— to the very people who caused the problem fifteen or twenty years ago — to giving to
people at the very low level, who will be the wave of the economic future. I would like to
see a shift of aid away from the traditional paradigm thave we have used to something
which is much more related to very poor people, who can really benefit from having a
little extra money in their pockets.

MICHAEL WEINSTEIN: There is always a danger in flopping from one generality to

another in search of systematic evidence. The literature on development is pretty weak,
about whether microenterprise or any other such tactic can leave a deep footprint on the
economy of a country. It doesn't mean it is not true, but we certainly don't have a
literature to that effect.

A substantial part of the book talks about aid, what it should and shouldn't go for. We
provide a lot of aid that isn't really aid at all. It is a payoff to Pakistan in the terrorism
battle, for example. Let's not call that money economic aid. Let's have it given by the
Defense Department; have it be temporary, have an exit strategy. But let's not call "aid"
something that doesn't have anything to do with economic development.

Part of the problem that we run into in measuring the impact of aid is that we use the
same label for flows of money that have completely different goals and intentions, and
we expect completely different outcomes.

JOSEPH SIEGLE: One of the problems and barriers to growth is when you have both
the political and economic monopolization of power in a single set of hands. This is often
one of the characteristic traits of authoritarian systems. To the extent that you can
separate economic opportunity from political authority, you will be in a better position to
develop. By channeling all of our assistance through central governments, we tend to
perpetuate the consolidation. That undercuts the opportunities for development.

QUESTION: Faced with various shades of democracies today, where would one draw
the line in extending aid and financial support? You mentioned some criteria that you
developed as to what connotes democracy. Would three out of five be sufficient? Would
just one be sufficient? What criteria would we develop to extend support?

JOSEPH SIEGLE: Of the criteria we mentioned, all three of the three would be required.
We try to use a relatively robust standard. At the back of the book, we have listings of
the indices, to give you a sampling of the types of countries that would qualify.

There are no perfect democracies. Even among industrialized democracies, there are
deficiencies. It is an ongoing process. Countries that have established these checks and
balances on power, that have rules that protect civil society and give opportunities for
popular participation more successfully use the resources. They have demonstrated
superior economic and social development, and thus are the best bets for our
assistance.

QUESTION: Can you say a bit more about the East Asian exception which seems to
come up in almost every development/democracy debate? Looking forward at China
versus India, which one will do better? Lastly, please don't channel aid to Pakistan
through the Defense Department. That way, none of it will go to development.

MORTON HALPERIN: The Defense Department already has enough money. We want
to get our hands on some of that money, rather than give it more money for this
purpose.

We used to be taught that the China and India comparison shows that you need to be
an autocratic government in order to develop. What I think it actually showed is that you
need sensible policies in order to develop. India is now growing very quickly because it
has changed its economic and governance policies.

One of my favorite stories about the impact of enhanced democracy on how

development works is a story about the Freedom of Information Act in India. An
advocate for the Act came out to a local village. He had obtained a report on how much
money had been given by the government to this village for development and what it
had been spent on. A huge crowd came out and squeezed into a structure with four
walls and no roof. He told them, first, how much money had been given. They were all
astonished, because they couldn't figure out how it had been spent. Then he said, "Let's
look at what it's been spent for. The first item was building a roof for the school."

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Everybody started laughing. He looked up and asked, "Why are you all laughing?" They
said, "We're in the school right now." The money had not been spent on the roof, but had
gone into somebody's pocket.

JOSEPH SIEGLE: It is fascinating to compare the authoritarian East Asian Tigers, which
have grown, to other authoritarians, because the distinctions are quite stark. To list a
few, the East Asian Tigers created space early on for the private sector and free
markets. This was, for the most part, distinct from political considerations, which is
typically not the case in most authoritarian systems.

Similarly, there were relatively more checks and balances on the chief executives in
these Tigers than there are in the often neo-patrimonial systems that you have in Africa,
Central Asia, and Latin America, which has also helped contribute to their more
moderate, encompassing policies. That they started with relatively more equitable
populations also created a greater sense of responsibility and compact between rulers
and the general populations.

Many of the Tigers had democratic origins and extensive democratic influences.
Through the British colonial structures, the institutions of democracy were set up in
Indonesia which provided mechanisms for them to maximize governance structures for
growth. Taiwan and South Korea had heavy U.S. influences — political, military, financial
— which steered their direction, both economically and politically. Their access to U.S.
markets certainly contributed to their growth as well.

MICHAEL WEINSTEIN: What we learned in sifting through scores of cases is that they
are the exception. If you can clone the East Asian miracle, go right ahead and do it. But
when many countries have tried, they have failed miserably. We don't need to explain
every instance. We don't have that kind of deterministic notion of predicting success or
lack thereof. We would merely note that if you go down that road, the overwhelming
probability is that you will be worse off.

QUESTION: Is it possible for overwhelmingly Muslim societies to develop effective

democracies?

MORTON HALPERIN: Some years ago when I was in the government, I participated in
a panel discussion in preparation for the first Community of Democracies meeting in
Warsaw. Paul Wolfowitz was an NGO representative from the board of Freedom House.
Being a good government official, I read what I was given to say. In response to this
question, I said that data indicate that a majority of the world's Muslims live in
democratizing countries or in democracies.

Paul Wolfowitz passed me a note saying, "Where did you get this from? It's clearly
wrong." I said I didn't know, that I was a government official, and I read what I was told,
but I would go back and find out. So I went back to my office, and I said, "Paul Wolfowitz
says this is wrong. Where did it come from?" They said, "It comes from Freedom
House."

I sent Paul a note saying, "It turns out that we got this from you, so you need to check
your facts, not me."

Indonesia is doing remarkably well in its democratic tradition. Nigeria is not doing quite
so well, but compared to many African countries, it remains more or less on the path of
democracy. The Muslims in India support democracy in no way different from the Hindus
in India.

I see nothing to suggest that Muslim culture or religion stands in the way of democracy.

The current debate is over whether the people in the streets of Lebanon are the same
as those in the streets of Ukraine. We know, from many anecdotes, that the people in
Lebanon watched the people in Ukraine on their television. Free Arab television was
much more important in exposing them to Ukraine than it was to events in the Middle
East. The Lebanese believe that they are doing what the people of Ukraine did, and out
of the same passions and convictions.

JOANNE MYERS: Thank you all for advancing the argument that democracy furthers
development.
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