Too Much Democracy?

Yesterday’s NY Times article provides an interesting perspective on the relationship between democracy, oil revenues, and development on the case of Kuwait.  As the story goes, in Kuwait, a public opinion that democracy has hampered the country’s development is becoming more widespread.  The reason?  Well, it seems like the country is lagging behind its as well oil-rich neighbors who shun democracy in favor of monarchies.

For example,

Many Kuwaitis also complain about government neglect of public hospitals and schools. Problems with the power grid caused brownouts last summer…Although parts of Kuwait City were rebuilt after the Iraqi invasion of 1990, much of it looks faded and tatty, a striking contrast with the gleaming hyper-modernity of Dubai, Abu Dhabi and Qatar.
 

But it may be too little reform (or too little democracy) rather too much of it that is the root of the problem.  For example, one source of frustration with the Parliament has been

the failure to reform Kuwait’s state-controlled economy. After the 2006 elections, many Kuwaitis were hoping for changes to cumbersome government rules that allow land to be allocated for business projects. Instead, the effort was blocked in Parliament. The slow pace of efforts to privatize the national airline and parts of the oil sector has also caused disappointment.

Ending on the upbeat note, however, the article points out that despite challenges “retreat from democratic values seems unlikely” in Kuwait.

Still, the point raised is rather valid – do authoritarian governments, not necessarily a subject to debates and opinion-exchange in the policymaking process, perform better in development projects when resources are abound by bypassing political deliberations and making swift decisions on investment, infrastructure development, etc.?

But this question is not new – it has been raised before, by F.A. Hayek among others, who noted that one of the key questions in development is

whether we are more likely to succeed in putting at the disposal of a single central authority all the knowledge which ought to be used but which is initially dispersed among many different individuals, or in conveying to the individuals such additional knowledge as they need in order to enable them to fit their plans with those of others.

The point that Hayek makes in his work on knowledge is interesting.  Even well-meaning authoritarian leaders can fail in allocating resources for one simple reason – by short-cutting across the debates that channel key information to policymakers, they also lose access to key information.  Hayek goes on to conclude:

The problem is thus in no way solved if we can show that all the facts, if they were known to a single mind (as we hypothetically assume them to be given to the observing economist), would uniquely determine the solution; instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge. To assume all the knowledge to be given to a single mind in the same manner in which we assume it to be given to us as the explaining economists is to assume the problem away and to disregard everything that is important and significant in the real world. 

So, too much or too little democracy in Kuwait?  Well,

“A half democracy does not work,” said political analyst Ayed al-Manna, referring to Kuwait’s system under which it has a legislative assembly but no majority government and no political parties.