Will China become a democracy in a decade?

China is entering a crucial period: in 2014, its per capita GDP will surpass $10,000. Historic episodes show that autocracies reaching this income level became much more democratic over the next decade.    

Will economic growth result in more democracy in China? There is still an ongoing  debate on whether higher incomes lead to a more democratic political system. But I believe that if historical patterns are any guide, China will become a lot more representative in the next 10 years (or get stuck at around current income levels).

Source: asianconservatives.com

 In 2014, per capita GDP will surpass $10,000 in China – in 2013 dollars and in purchasing power parity terms (IMF data). This level seems to be a significant threshold for democratization, although the exact value is of course hard to pin down. Historical fact: apart from major oil-producers, any country that surpassed this level in a sustained manner was either already a reasonable democracy or became one in 10 years. The only exception seems to be Singapore. But even Singapore is characterized as an “Anocracy” by the Polity project (scoring -2 on a scale of -10 to 10), not an “Autocracy” as China (scoring -7). The jury is still out on Belarus, which was another outlier in the past few years – this case is probably a mix of lying about their per capita GDP levels and a propensity for becoming more democratic eventually.

Richer countries are more democratic– or vice versaSources: IMF, Polity IV database. Sample excludes countries with an “oil rent” of more than 10% of GDP (as defined by the World Bank) and Luxemburg

The following chart shows the handful of cases where the polity score was negative at the point of achieving $10,000 per capita GDP in PPP terms (these are autocratic countries). With some wobbles like in Greece or delays like in Spain (where the transition started just after 10 years), they have since come a long way in a decade in terms of democracy. China is now roughly where Taiwan was 30 years ago in terms of both democracy, or rather the lack of it (polity score of -7 in both cases) and GDP per capita (around $10,000 at current prices). It seems likely that China will follow a similar democratization (and growth) trajectory as Taiwan with a roughly 30 year delay.

Maintaining the current level of political oppression does not seem to be on the cards. The Chinese Communist Party leadership probably hopes that they can turn the country into a giant Singapore. With China’s size and diversity, that would be a difficult trick to pull off. And even that would imply a significant political opening.

The democratic transition is usually fast

Sources: Polity IV dataset, IMF, PWT. Missing polity scores are interpolated

A high income in itself does not necessarily cause democracy – as one of the links mentioned above, there may be a common cause of both (let’s call it the “X factor”). But that is beside the point – if China lacks this “X factor”, then it will not grow much from here on the longer run. Argentina exceeded the $10,000 per capita income level several times in its history only to fall back during its long stagnation.  China is an unlikely candidate for stagnation, at least not yet, despite its aging population.

What does not seem unlikely at all is China having a recession in the next few years. And that, somewhat paradoxically, can trigger a democratic regime change as it happened for example in Indonesia in the wake of the 1997 Asian financial crisis.

So the optimistic scenario is China “unexpectedly” democratizing in the next decade or so. Note that most of the democratization episodes shown on the chart above happened quickly, in a few years’ time, Taiwan’s “managed” transition being the exception. And also note that democracies very rarely fight each other. But the pessimistic scenario is that the leadership, sensing the pressure for more openness, turns more nationalistic and oppressive and tries to channel frustration towards “foreign powers”. That may ultimately lead to the same peaceful and democratic destination, as it did in Germany after WW2 – but only after much suffering.  History only rhymes not repeats – hopefully we can avoid a similar detour.

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Tags: China, democracy, economic growth