Markets, States and Democracy – Khan (2005)


This article examines whether democracy is necessary for development (as opposed to being preferable for a host of other reasons), and hence the relationship between markets, states, and democracies in developing countries. It concludes that the evidence is inconclusive: it seems that neither democracy nor authoritarianism is a precondition for development. An important reason why democracy does not necessarily lead to development is the role and entrenchment of patron-client networks in many poor countries, even those that are formally democratic. The resilience of patronage, in turn, is linked to structural features of the economies in developing countries that make welfare-driven redistributive politics unviable. An implication of this is that the donor emphasis on democratization in recent years "may be diverting us from more important priorities that may be necessary to achieve the prosperity required for making democracy both more sustainable and capable of delivering real decision-making powers to societies." Instead, Khan argues, "If accelerating the transformation was our objective, these patterns of factional politics should have been the target of analysis".