Are Democratic Institutions Good or Bad for Development

Various nations around the world have varying systems of government. Leadership practices have often differed based on a country’s views from time immemorial. Any people believed in monarchical systems of government. This is where a country is headed by a king or queen and authority is passed on by one family’s bloodline. Other nations are governed by rulers who use coercion to govern the country against the wishes of the population (Cheema, 2005). The most prevalent form of government practiced by most countries is a democratic government. Democracy is a system of leadership in which the people have the right to decide. They are the ones who elect their leaders who will represent their needs in democratic institutions.

Democratic institutions are channels set out for the elected leaders to discuss the issues of the nation with each leader speaking on behalf of his people. A good example of a democratic institution is parliament. These institutions are meant to help discuss important issues of the nation and find solutions that will lead to development of the nation. However, this is not the case sometimes. Some countries have used democratic institutions for their own benefit and have gone to an extent of embezzling public funds (Cheema, 2005). This paper is going to discuss about democratic institutions in details and show whether they are good or bad for the nation.

Democratic institutions are meant to be good for a nation. They are supposed to come up with development projects and build a nation and make it better. However, some countries have had their institutions misused by politicians and hindered economic development. According to Sen (1999), development in a nation gives people different types of freedom. When there is development in a nation, the citizens of that nation enjoy freedom in different ways. A good example is that they are able to buy everything they desire because they have enough income which in turn gives them freedom to spend. They enjoy freedom in the nation when there is political stability and positive arguments. Development can therefore be viewed as a means of expanding the freedoms of the members of society. Sen (2009), goes on to say that most economies deny the majority their freedom. Most democratic nations deny their citizens their freedom leading them to poverty and poor living conditions. They lack basic things like education and healthcare. The denial of freedom arises from authoritarian regimes that deny the people their right to participate in the social, economic, and political life of the community.

Democratic institutions such as parliament play a very big role in the freedom of their citizens. According to Sen, democratic institutions can either be good or bad for development. First of all, democratic institutions are responsible for creating the rules and regulations that govern a country. They are a trusted few who are supposed to air the grievances of the people whom they represent and see to it that they better their lives. Any leader in a democratic institution is elected by people from the area he represents. This means that these members of the institutions control a certain part of the country’s population. The fact that they have followers makes them responsible for the development and stability of the country. If they argue their cases professionally and concentrate on building the nation then they will use the institutions in a good way to enhance development in the country. Freedoms are not only the ends of development but also play a major role as a means of development. We do not need to be developed to enjoy freedoms, rather we can use these freedoms as a means of developing our nations.

According to Acemoglu & Robinson (2006), the political situation of a nation can hinder development of the economy. In most countries, the decisions to develop a nation are made by a few elites who are chosen to represent people from different parts of the country. The elites enjoy so many advantages in this position besides the power. Acemoglu and Robinson (2009) argue that the elites can block the development of a nation if it threatens their position and advantages they enjoy. This is particularly easier when there is not strong opposition in politics or a monarchy. During the industrialization era, countries such as Russia had a good chance to develop very fast but they did not. The monarchy system of government was afraid that the railway would take many people to the city and improve their education levels threatening the existence of that regime. A few elites decided to oppose development just so that they could remain in power. Britain and the US accepted technology and industrialized at a very high rate because they were politically mature. Russia, Austria-Hungary, and Spain lagged behind because the elites in power were threatened by the new innovations.

Most regimes were scared of the political replacement effect. They blocked economically beneficial change just to protect their own selfish interests. These habits are still present in the developing nations where politicians go to an extent of rigging elections just to remain in power. Others stay for too long trying to force their wives or sons on the people just to ensure power remains in the family. Democratic institutions are good for the development of a nation. A good example is the way Britain and the US developed during the industrialization era due to democratic institutions. An institution such as parliament is very important since it includes even the opposition `they act as supervisors of the policies passed by the government. A strong opposition will ensure that policies are made in favor of the economy and not a few individuals. Acemoglu and Robinsons (2006) explain that a weak democracy is where a few individuals benefit themselves but with a good and strong opposition then decisions are made towards development. Democratic institutions are good for development and even overseeing the existing government property. Otherwise, it might be taken by a few elites and used for their personal gain.

Asia is one of the continents that is well blessed in terms of natural resources. This is the place where most of the countries have oil as their main source of income. Since oil is a very precious resource, the Asian economy came up so fast in the 19th century and scared most of the established economies (Olson, 1992). Most nations invested in Asia trying to get a slice of the worlds most upcoming economy. In the 90s, the Asian economy fell into a crisis. It happened so fast such that most investors were caught unawares and puzzled by the crisis. MacIntyre (2001) explains that policy responses made a huge difference in containing investor panic as the crisis moved from bad to worse. Policies are made by democratic government institutions such as parliament. According to MacIntyre (2001), the effect of the crisis was felt differently in different nations. He goes on to argue that nations that were quick and flexible in coming up with new policies controlled their investors panic and convinced them to stay. The investors actually felt like the governments of these nations actually cared about them and their investments.

Democratic institutions are good for development of a nation and the Asian crisis is a good example. When leaders come together and make policies that are good for the economy, they protect the development of the nation even in tough times. The Asian crisis affected different countries at different levels. Some countries suffered a lot due to their rigid or volatile policies that saw investors flee the moment the crisis began. Other nations managed to maintain their investors with flexible policies that ensured they both share the damage of the crisis. A democratic institution is good because in such a crisis they are able to come up with policies that are inclusive of everybody in the country. Development will also be well spread throughout a nation when the nation is democratic (Alesina, Ozler, Roubini & Swagel, 1996). This is because every leader is given a share of the national budget to develop his region. The opposition also gets a good chance to monitor the spending and allocation of government resources and blow the whistle as soon as they notice any irregularities. A democratic government is also good because people get to decide whether to keep it or change it every time the country goes into elections.


Acemoglu, D., & Robinson, J. (2006). Economic Backwardness in Political Perspective. American Political Science Review, 100(1). Retrieved from

Alesina, A., Ozler, S., Roubini, N., & Swagel, P. (1996). Political instability and Economic Growth. Journal Of Economic Growth, 1(2), 189-211.

Cheema, G. (2005). Building democratic institutions. Bloomfield, CT: Kumarian Press.

MacIntyre, A. (2001). Cite a Website – Cite This For Me. Retrieved 13 December 2017, from

Olson, M. (1992). The rise and decline of nations. New Haven: Yale University Press.

Sen, A. (1999). Development as freedom (pp. 3-53). New York: Oxford University Press.

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