The Faulty Economic Model Behind America's Support for Dictators Instead of Democracies

George Washington's picture

Washington’s Blog

It is obvious that America has long supported dictators, instead of democracies, in developing countries.


Is it simply - as Noam Chomsky asserts - that America supports strong men who will ensure that their country acts as a "client state" to the U.S., and moves to crush countries which refuse to act as satellites to the U.S.?


But - as usual - faulty economic models are part of the problem.

Specifically, Morton Halperin, Joe Siegel and Michael Weinstein co-wrote a book called The Democracy Advantage: How Democracies Promote Prosperity and Peace,
published by the Council on Foreign Relations in 2005, which provides
insight into the economic model used to justify America's historic
support for dictators.

Halperin is no outsider,
being a high-level adviser in the Clinton, Nixon and Johnson
administrations and to the Council on Foreign Relations. In the
Johnson Administration, he worked in the Department of Defense where he
served as Deputy Assistant Secretary of Defense (International
Security Affairs), responsible for political-military planning and arms
control. During the first nine months of the Nixon administration,
Halperin was a Senior Staff member of the National Security Council
staff with responsibility for National Security Planning. In the
Clinton administration, he served Director of the Policy Planning Staff
at the Department of State, the Special Assistant to the President
and Senior Director for Democracy at the National Security Council, and
consultant to the Secretary of Defense and the Under Secretary of
Defense for Policy. He was nominated by the President for the position
of Assistant Secretary of Defense for Democracy and Peacekeeping.

Halperin, Siegel and Weinstein gave a speech at the Carnegie Foundation in 2005 explaining their research findings.

Halperin noted:

American presidents have said, particularly since the end of the Cold
War, that a major goal of American foreign policy was to spread or
enlarge or enhance democracy, and that our foreign policy was geared to
supporting those who were struggling to establish and maintain
democratic regimes.

Yet if you look at development assistance
from the United States, from the international financial institutions,
and even from the Europeans and the European Community, you find that
there is no democracy advantage. That is, democratic countries, in
fact, receive less development assistance than do non-democratic
countries. You also find in the rhetoric, and even the charters, of
development agencies a belief that democracy is not their business.
They increasingly talk about good governance as one aspect of
development, but not about democracy. The people who run USAID believe
that their job is to promote development, and not democracy. That
permits them to consider good-governance issues, but not to ask the
fundamental question: Is this a democratic society that we want to

Indeed, the international financial institutions have,
with one exception, charters which require them not to take account of
whether a country is a democracy, or as it is referred to in the
charters, its political criteria.

Underlying this policy of
governments and international financial institutions is a belief about
how democracy relates to development. There is a widely held view that poor countries need to delay democracy until they develop. Back
when I was in college, this was the Scandinavian view of democracy,
that only Scandinavian countries were capable of being democratic, and that you needed to have a solid middle class before you could contemplate democracy. The argument went—as presented in the writings of Samuel Huntington and Seymour Martin Lipset —that
if a poor country became democratic, because of the pressures in a
democracy to respond to the interests of the people, they would borrow
too much, they would spend the money in ways that did not advance
development—arguments that the current president of Mexico is making
about his possible successor. These poor decisions would mean that
development would not occur; and because people would then be
disappointed, they would return to a dictatorship.

Therefore, the prescription was, get yourself a benign dictator—it
was never quite explained how you would make sure you had a dictator
that spent the money to develop the country rather than ship it off to a
Swiss bank account—wait until that produces development, which
produces a middle class, and then, inevitably, the middle class will
demand freedom, and you will have a democratic government.

That proposition was wrong.

picked up from there. Siegel is a Senior Research Scholar at the
University of Maryland's School of Public Policy, and an expert on the
political economy of democratic transitions, who has contributed articles to leading policy journals and newspapers including Foreign Affairs , Harvard International Review , Georgetown Journal for International Affairs, Los Angeles Times, Financial Times, Newsweek International, Wall Street Journal, and The International Herald Tribune. Siegel was also a high-level researcher for the CFR.

Siegel told the Carnegie Foundation:

the last forty-five years of actual performance, there is no evidence
that poor authoritarian countries have grown any more rapidly than poor
democracies. If you leave out East Asia, you see that poor democracies have grown 50 percent more rapidly, on average, during this period.
The Baltic countries, Botswana, Costa Rica, Ghana, and Senegal have
grown more rapidly than the Angolas, the Syrias, the Uzbekistans, and
the Zimbabwes of the world.




Social dimensions of
development ... are even more starkly divergent. For example, in terms
of life expectancy, poor democracies typically enjoy life expectancies
that are nine years longer than poor autocracies. Opportunities of
finishing secondary school are 40 percent higher. Infant mortality rates
are 25 percent lower. Agricultural yields are about 25 percent higher,
on average, in poor democracies than in poor autocracies—an important
fact, given that 70 percent of the population in poor countries is
often rural-based.

There are many reasons for this .... One characteristic that seems particularly prominent is that democracies
do a far better job at avoiding catastrophes of all types. If we look
at financial catastrophes for each of the last four decades and look at
the twenty worst performers over each of those decades, we find that
of eighty cases, only five are democracies. Similarly, if you look at a
10 percent contraction in GDP per capita on an annual basis, you find
that poor democracies are half as likely to experience this sort of
acute recession as are autocracies.

We see similar
patterns with regard to humanitarian issues. Refugee crises are almost
invariably a result of the politics in authoritarian systems.




Amartya Sen, the Nobel laureate economist, famously noted that no democracy with a free press has experienced a major famine.

of the immediate assumptions made is that this is because of the
populist pressures that democracies face; therefore, they are investing
much more in their health and education sectors, leading to other
macroeconomic problems. In fact, that is not true. To our surprise, poor
democracies don't spend any more on their health and education sectors
as a percentage of GDP than do poor autocracies, nor do they get
higher levels of foreign assistance
. They don't run up higher levels of budget deficits. They simply manage the resources that they have more effectively.


me move on to the second assumption, the notion that once autocratic
countries reach a middle-income range, they will make the transition to
democracy. Given the limited growth that we have seen under
authoritarian systems, relatively few authoritarian countries actually reach this middle-income range. In fact, since 1960, only sixteen autocratic countries have reached a per capita base above $2,000 a year.


Fareed Zakaria's book argues, in a repostulation of the Lipset and
Huntington theses, that we shouldn't be pushing democracy until these
countries reach per capita incomes of $6,000 a year. If we were to do
that, of today's eighty-seven democratizers, only four would qualify as
being ready. That would exclude the Baltics, Costa Rica, Poland, South
Africa, and many others.


However, even among those
poor autocracies that have grown, they are no more likely to make the
transition to democracy once they have grown or once they have reached a
middle-income status than they were when they were poorer.




third and final assumption is the notion that premature
democratization is a recipe for instability. We find empirically no
strong basis for this reasonable hypothesis. What we do see, borne out
in much of the conflict literature of the last fifteen years, is that
the prevailing factor that influences conflict—and today most conflict
is civil conflict—is poverty....

When you control for that and you look at countries that are going through political transition, you find that democratizers are no more likely to be vulnerable to conflict than are other poor countries.




sum, the three core assumptions that have underpinned the
authoritarian advantage thesis over the years aren't borne out through
our empirical analysis. What we find is that the form of government
that is in place in the developing world has a huge difference on the
development performance realized, and that by holding onto these
notions that we should defer democracy until some later point, we are,
in effect, perpetuating underdevelopment and higher levels of political
and sectarian conflict, as well as deferring the point at which people
can govern themselves.

Michael Weinstein - former chairman of the Department of Economics at
Haverford College and a former economist columnist and editorial board
member for The New York Times - then provided some recommendations:

aid is bilateral, multilateral, quadrilateral, let's give it to the
democracies and democratizers, and not to poor autocracies.




policies have been anti-democratic. They have trampled on the
incipient groups, such as civil groups inside poor countries, anmd run
roughshod over them to force countries to follow policies drawn up by
Washington D.C., and not by the countries involved. Democracy can be a
victim in lots of silent ways.




Democracy ... is so
clearly connected to growth and prosperity that we say, highlight it,
so that whenever a government like the United States, an agency like
USAID, a bilateral or multilateral organization begins to contemplate
aid policy, it would issue a democracy impact statement. Give us a good
prediction of how the policy as proposed and implemented will trample
on democratic forces within the poor countries to receive the aid.

In a question and answer following their speech, Halperin, Siegel and Weinstein gave some additional insights.

Halperin noted that the foregoing discussion applies to Muslim as well as Western countries:

I see nothing to suggest that Muslim culture or religion stands in the way of democracy.

current debate is over whether the people in the streets of Lebanon
are the same as those in the streets of Ukraine. We know, from many
anecdotes, that the people in Lebanon watched the people in Ukraine on
their television. Free Arab television was much more important in
exposing them to Ukraine than it was to events in the Middle East. The
Lebanese believe that they are doing what the people of Ukraine did,
and out of the same passions and convictions

Siegel pointed out several reasons why democratic countries are more prosperous than autocratic regimes:

there is more symmetry on all sides of a market, buyers and sellers,
you usually get more efficiency, more willingness for people to
participate. That doesn't happen if people are unsure if they have all
of the facts on the table.

Openness also contributes to higher
levels of transparency and lower levels of corruption. Data show that
corruption cuts heavily into GDP growth on an annual basis.

third point is adaptability. Democracies not only have a
self-correcting mechanism, but also mechanisms for a systematic means
of changing ineffective leadership. This allows for a stable transition
to a new policy framework that might allow for a more effective
process of addressing the problems that a country is facing, one that
is appropriate for its particular circumstances. Because of this process
of succession, you don't have the same instability in democracies that
heavily cuts into growth in other systems, either because of the
political uncertainty or the civil conflict that results.


of the problems and barriers to growth is when you have both the
political and economic monopolization of power in a single set of
hands. This is often one of the characteristic traits of authoritarian
systems. To the extent that you can separate economic opportunity from
political authority, you will be in a better position to develop. By
channeling all of our assistance through central governments, we tend
to perpetuate the consolidation. That undercuts the opportunities for

And Weinstein gave another reason:

Democracies don't fall off the edge of the cliff and hit bottom in the way autocracies do.

Afterword: It's not just America. As Chapter 1 of The Democracy Advantage: How Democracies Promote Prosperity and Peace notes:

Today, it is politically incorrect to extol publicly the virtues of autocracies — countries where leaders are not popularly elected nor subject to meaningful checks and balances. Nonetheless, the view that these governments do a better job of promoting economic growth and stability among
poor countries remains firmly entrenched in the minds of many world leaders, economists, national security advisors, business executives, political scientists, and international civil servants. According to this perspective, promoting democracy in poor countries is naïve and potentially dangerous.


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essence's picture

Hello Hacker

This isn't 1970, haven't you noticed.

The U.S. is broke, with little industry left to support any 40 year old agreement.
Heck ... the U.S. needs foreign aid. It no longer qualifies as a "rich" nation if one travels outside the beltway or wall st.

As for the argument that it represents only x % amount of the budget, that can be said for any program. A wrecking ball needs to be taken to federal programs.


essence's picture

Regardless whether the U.S. supports dictators or democracy, the part that involves foreign aid needs to stop. When you're broke, isn't it absurd to be thinking you have the capacity to meddle abroad?

The U.S. is borrowing 40% of every dollar the government spends.

But then that does't affect the imperials in Washington does it.
Main Street can go under, Social Security can be cut,  while they rationalize that the chess game should go on and they still have carte blanche.
Why they don't even think about stopping foreign aid. The very thought is alien to them, they're that far out of touch with the population.

Foreign Aid will continue ....  untill Americans DEMAND that it stops and the government live within its means.




Amish Hacker's picture

I would be careful not to overstate the amount of foreign aid that the US actually provides poor countries. In 1970 the OECD countries agreed to donate 0.7% of their GDP to the Third World. Forty-one years later, that goal is still unmet, not even close. The average has been 0.2%-0.4%, and the US, while the most generous donor in dollar terms, is the stingiest in terms of GDP. Even if we eliminated all non-military foreign aid, the impact on the total budget would be minimal.

A good analysis of these issues and foreign aid in general is at

gwar5's picture

I agree with you we should not support dictators, but as reminder...

Barack Obama strongly supported the failed marxist dictator takeover of the democratic republic of Honduras with the help of Hugo Chavez backing the wannabee, Manuel Zelaya, June 2009.

Obama did not speak out against the Iranian dictatorship and mullahcracy and coldly turned his back on the people dying in the streets at a time when an outside moral voice could have made a difference. 

Obama appeases the Russian dictators Putin and Medvedev who are assassinating journalists and dissidents and turns his back on our steadfast allies in Eastern Europe like the Czechs and Poles and does it on the anniversary of the German invasion of Poland as a cruel joke.

Obama appeases the Chinese dictators and makes the Dalai Lama, the 1989 Nobel Peace laureate, walk out the side door of the White House next to the bags of trash piled high.

Obama looks the other way and is complicit as the cronies on Wall Street commit the biggest theft in the history of the world, which is throwing the world into economic chaos and mass starvation looming

Obama tells his American countrymen to "sit down, shut up, and get out of the way" and calls them his "enemies" and says to "hit them back twice as hard", which is strange totalitarian language coming from a guy who is supposed to be the leader of the free world and Nobel Peace Prize laureate.

I don't think it's too much to expect an American president not to embrace bigger dictators like the Chinese, Russians, Iranians, South Americans, Cubans, Syrians, and North Koreans before he goes and dumps the old-boy dictators whose strategist interests, at least, include our success and not our destruction. 

And let the record show that in 2005 Condoleezza Rice made a well known speech in Cairo calling for Egypt to undergo democratic reforms and have open and fair elections.

In 2005, while the coalition troops were still in Iraq: the Syrian army retreated out of Lebanon, Libya renounced nukes and said they'd carry out reforms, and the Taliban were not threating Pakistan. That was the time to have free and fair elections in Egypt and a transformational open constitutional government.



blindman's picture

economic model / money system trumps

political description, rendering said description

artless and heartless.

 a.r. " give me control of

a nations money supply and i care not who makes

the laws. "


perhaps democracies would more likely reject the debt money system

and this is why they have been discouraged in international relations. ?

atomicwasted's picture

South Korea and Chile both made a transition from military dictatorship to democracy, fairly smoothly.  But the success of two countries in that dictator group doesn't validate the idea that the "benign dictator" model is a good idea.  If anything, those two countries probably just represent one tail of the bell curve of that model.

Mercury's picture

Democracy is by definition more pluralistic that other forms of governance and should tend toward producing broad consensus outcomes.  But democracy all by itself is morally and ethically neutral and shouldn't be used as a one word litmus test for good or fair government.  After all, in a pure democracy 51% of the people might vote to hang the other 49% from trees.  If you agree that rape is wrong, democracy doesn't make it right just because "we voted on it."

The United States has had the tremendous success that its had mostly because of things like property rights, enforceable contracts, civil rights and a reasonably fair judiciary.  I would certainly prefer to live under a monarchy that had these things than a democracy that didn't.

When Bush (and others before him ) push American advocacy of democracy, don't assume all that important stuff I just mentioned is taken for granted.  Reasonably fair democratic elections have resulted in not just Thomas Jefferson but Hitler, Ha-mas and Hezbollah running the show.

If I were an Egyptian I'd be more concerned with getting a system in place that would allow me to get a clear, defensible and transferable title to my property and making sure I had specific, definite rights that outline what the state can not do to me (what Obama disparages as negative rights) than I would be about ensuring that the victor of a one-man-one-vote election gets shown to Mubarak's throne ASAP.

ddtuttle's picture

As much as I sympathize with efforts to promote democracy, implicit in this whole idea is that US is in a position to "dictate" what form of government a country should have. I would argue that there are numerous forces acting within every country that actually determine the outcome. First, are the wealthy citizens of that country. In a tyrannical regime, there is likely to be small group of extremely wealthy individuals. These people may own local real estate and businesses, but have their money in foreign banks. They have important relationships with those bankers, and can and probably have borrowed large amounts of money from them. In addition, foreign corporations often cut deals with these owners to exploit natural resources like oil or minerals. Sometimes they set factories and employ the population not engaged in agriculture.

These "oligarchs" usually consider themselves superior to the "little" people of their country, and at best are benevolent patriarchs. A common form of economics is serfdom, or sharecropping. The farmers lease the land, and share the profits with the owner. The secret to this is to keep the peasants' share small enough that they have to borrow money from next years crop to make it this year. Of course, this goes on forever. These people and their bankers are vested in keeping things the way they are. It is the web of landed aristocracy and foreign interests that ultimately decide how the country should be run. If the peasants are likely to revolt, a cruel dictator is "hired" and put in power to keep the citizenry down. A less cruel system can exist where revolt is a more remote possibility.

The US is not really in a position influence the outcome of this. But we are in a position to exploit the situation. Our bankers can keep everyone in debt, our corporations can exploit their resources and cheap labor, and our military can persuade them to accept a base, which helps "keep the peace"; i.e., the status quo. After investing in the status quo in this way, any revolt would cause problems for our banks, corporations and possibly create regional military tension. In the end we end up being part of the problem, but in most cases the problem is home grown. The American people want democracy to spread, but many of our businesses are invested in things as they are. On the other hand should we really be in the business of overthrowing governments that aren't a direct threat, even if it is to establish a democracy?

Amish Hacker's picture

The "economic model" we're talking about here isn't uncorrupted free-market capitalism, but, rather, the real-world combination of militarism-imperialism-corporatism that Noam Chomsky describes so cogently (e.g. What Uncle Sam Really Wants ). We shouldn't be surprised that we end up with serial military entanglements abroad and a police state at home, given that these were two of our inputs.

I wonder if it doesn't make more sense to measure a country's readiness for democracy by its level of education, rather than its level of income. The indispensable element for real democracy is an educated and involved electorate, capable of critical analysis and open discussion. Keep the poor in everlasting ignorance, and you can argue forever that they're too poor and stupid to be ready for democracy. Meanwhile, the educated rich can continue to loot the country.

aerial view's picture

yes the economic model is flawed but it's because those in control always have ulterior motives: further control of others while enriching themselves. Our govt has become one insatiable power cartel constantly finding new ways to prey on the weak and uniformed. It is easy to win at anything when you are willing to play dirty and can change the rules to justify your actions. The solution is to either vote in honest incorruptible people into office or simply rewrite all the laws, plug them into a computer and let the computer run the country.

Sparkey's picture

"rewrite all the laws, plug them into a computer and let the computer run the country."

Aerial view, computers do control your life now what many don't see about the ubiquitous computer is; computers are machines and like all machines they are controlled by someone, so now society is  devolving into two broad classes, one, composed of  almost everyone interacts with the front of the machine to obtain their daily needs, the other, much smaller group stands behind and controls the machine which controls the masses, the technicians who control the machines are in turn controlled by a very small group, possibly no larger than 1/10 of 1 %, possibly the top 1/10%, do you think?

New_Meat's picture


"... stands behind and controls the machine..."

Lots of layers, unlike, e.g.:

population-wise, yes.  6BB*0.0001=600k 'movers-shakers' (disregard drones and retainers).

Programming normal stuff is hard.  Programming algoz produces e.g. 5.6.10 flash crash and AAPL nonsense last week.  Asimov envisioned programming that could work on society.  Me?  Not so much.

Not at all to say that they won't try.  Poke the system in the eye with a stick.

- Ned

rwe2late's picture

The belief that imperialism is due to a faulty "economic model" or a faulty 1% "terrorist" doctrine is wrong-headed.

Whether manifest destiny, the white man’s burden, or "spreading democracy",

the concocted arguments have been numerous, and mostly beside the point.

The swindling by Goldman Sachs, the TBTFs, and Halliburton is not due to a faulty economic model.

Nor does the “securing” of resources, MIC profiteering, Mubarak’s corruption, or the Bremer-led pillage of Iraq have much to do with any of the convenient economic excuses given.

The justifications for plunder, pillage, torture, murder, and elitist rule are many, ranging from the religious to the Shock Doctrine.

The basic cause however, lies within the current structure and relationship of power.

Attempting to persuade the ruling elite to follow a more efficient or theoretically profitable course of action for them, will do nothing to alter the problems due to their kleptocratic and autocratic rule.

In fact, there is no way to rationally persuade them that securing control of resources, financial manipulation, and global militarism do not benefit them - because they do benefit.

If exposing some of the elite’s PR justifications helps others to be more critical, all to the good.

But portraying decisions and policies made as due to some misunderstanding,

presents a falsely benign and neutral quality to the process.

midtowng's picture

Our government supports capitalism, not democracy.

There is also the false belief that capitalism leads to democracy and prosperity. It doesn't. Democracy leads to prosperity. Unregulated capitalism leads to an oligarchy.

AN0NYM0US's picture

I'm not sure citing members of the CFR adds credibility to your argument GW- do some digging into Halperin's past and you might be surprised what you come up with


LOL follow this link at



George I know you rail against the left-right paradigm but I wonder if in the dark recesses of your library is a well worn copy of  Arianna Huffington's biography

falak pema's picture

The fundamental postulate here is the American imperium. What should America do? When, where, how and with whom as buddy-buddy or enemy.

The USA is perceived as Athens under Pericles : Democracy at home, Hegemony abroad. God help you if you act like the Melians. If you are not for us you are against us. The Delian League etc. We know what happened to Athens in history. How the fallacy of two types of freedom; for victors and victims was exposed as untenable. It led to Athen's fall.


Soooo, the question now is why are Americans debating this as if they OWNED the world, their Mare Nostrum of old. When Benbernakification is wanking them into economic oblivion.


The question no longer is : Quo Vadis Egypt et al. But Quo vadis USA?

The rest is just literature as the world runs away from the grasp of Old glory.

It most likely is no more America's problem with every day that passes. Strap on your safety belts...Put on your life jackets...get ready to push eject button...if you can access it!

Logans_Run's picture
  • Sorry I thought it was benbernankifuckification?
Misean's picture

Meh. It's all crap from a bunch of morons who's only accomplishments are brown nosing their way up bureaucracies. Dumbocracies given less aid...dumbocracies do better...huh? Couldn't be the relationship to look at though...

Government to government transfers are nothing more than making the state bigger than the tax base can support. It means capital (human and physical) malinvestment. Since the dumbocracies were given less external money to piss away, the economies supporting the parasitical state did better.

It's quite obvious, unless you're paid to be a parasite.

topcallingtroll's picture

The original view was that we should support authoritarian semi capitalist governments because they were more likely to transition into democratic market based republics than authoritarian socialist govenments may be false also. Authoritarian socialist governments have not necessarily proven more stable and more immune from democratic revolution

TimmyM's picture

You should move this argument toward no foriegn aid. All aid is corrupted. Yes, emperial resource exploitation aid is the worst. But any aid becomes that regardless of intentions. Have you pondered about the inflationary effects of diminished emperial exploitation?

AnAnonymous's picture

Real politik is a nasty mother.  It reveals nations as they are.


New_Meat's picture

Yep, just finished watching 60 Minutes session on how GOOG is enthusiastically working to destabilize a foreign government.  Link not yet posted, but all y'all can look for it.  Piss-ant (thirty-something) is bragging about how they organized the protest.

GOOG executives frequent visitors to WH, y'all can look that up.

I'm thinking back to Diem in South Vietnam, before he was, well, dead.  Lots of stuff on-line looks like it has been eventuated to some other place. 

GOOG helping 'community' get organized in a way that they know will result in world wide broadcast of their 'protest.'

80MM Egyptian Citizens, let's say 1MM 'protestors'.  So that means that 1/80=1.25% of 'peaceful' protestors can abrogate the constitution? 

AnA: Real politik is a bitch--Kissinger is smiling.

- Ned

umop episdn's picture

"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it."   Frederic Bastiat