North Korea watchers—ourselves included—spend too much time reading muddy tea leaves and too little time thinking about how to model the political economy of the place. There is, however, an increasingly robust research program on the political economy of authoritarian regimes, and in coming posts we are beginning a new feature—Academic Sources—that reaches out beyond the standard North Korean fare; some earlier posts in this vein are listed below.
First up, some interesting posts at Vox on the relationship between regime type and economic growth. For a number of years, Adam Przeworski et. al.’s Democracy and Development: Political Institutions and Well-Being in the World, 1950-1990 was considered a kind of final word on the issue among political scientists. Among the headline findings:
- Controlling for income and a number of other variables, regime type had no effect on investment, the growth rate of the capital stock, or overall income growth.
- Dividing the sample into wealthy and poor countries (above and below $3000 per capita income), they found no evidence that regime type effects growth in poor countries.
- Dictatorships that experience high growth for some period—even an extended period—revert to the mean or even experience disastrous growth collapses. Nigeria, Iraq, Romania, and Ecuador provide examples as does North Korea, which experienced at least modest economic expansion during the 1960s and 1970s.
- However, they also noted that the standard deviation of growth in the sample of dictatorships was much larger than in the democracies (6.08 vs. 3.87, controlling for a number of potentially confounding factors), statistically illustrating the simple fact that dictatorships include both high-growth “miracles” (the East Asian newly industrializing countries in their heyday) and low-growth “debacles” (our favorite case comes to mind). The source of these differences has remained a major puzzle in political science.
Economists have been more bullish on democratic rule. In a post called Growth and political change: transition duration is critical, Caroline Freund and Melise Jaud at the World Bank summarize some of that work and provide a more hopeful take by looking at a sample of 90 democratic transitions over the last half century, including both those that consolidate and those that don’t. They find that rapid transitions have more positive effects in both the short- and long-run. For example, growth declines by 7-11 percentage points in the year of transition, but gradual transitions experience much worse transitional recessions in both their severity and duration. These effects carry over into the long run. Countries with rapid transitions, irrespective of whether they are successful or failed, experience swift recoveries and a long-run growth dividend of about one percentage point relative to pre-transition growth levels. In contrast, countries undergoing gradual transition tend to stagnate for years, with high long-run costs to growth. At least in a probabilistic sense, there is nothing in a sudden collapse scenario that would preclude a rapid rebound were the North Korean regime to fail.
This post led us back to a much earlier, but wise piece by Tim Besley that seeks to explain variation in the performance of autocracies (What we can learn from successful autocracies); that variance is shown in the nice graphic below, which shows the phenomenon noted by Przeworski and co. Successful autocracies outperform democracies at the top of the distribution, but perform worse at the bottom of it.
Besley offers a few explanations that comport with our continued search for institutional change in the North Korean political system, including reduced personalism, greater institutionalization within the party, or granting more responsibility to the Cabinet. So far, not much luck. But Besley lays out the arguments clearly. First, authoritarian regimes are more successful if there are organized “selectorates” that can hold the leader responsible for poor performance; think about the functioning role of the Politburo and Politburo Standing Committee in China. Second, turnover matters. The probability of leadership change in a given year is 13% for high growth autocracies and 7% for low growth ones. In other words, autocracies with highly stable leaderships (North Korea under the Kims, Cuba under the Castros, Syria under the Assads—note any patterns here?) do worse.
Don’t hold your breath, but things could improve in North Korea even if it developed a more accountable brand of authoritarian rule. And a sudden transition to democratic rule—an even lower probability—would not necessarily have longer-term growth effects; indeed, it could even be superior to a more prolonged transition.