In political philosophy and development studies, the Lee thesis, also known as the full-belly thesis or development without freedom, is an economic hypothesis that holds that authoritarianism can result in greater economic growth.
Named after the first prime minister of Singapore, Lee Kuan Yew, the thesis holds that the recognition of civil and human rights by a government will sometimes impair economic growth, and that economic efficiency and more rapid economic development should, and often will, be facilitated by the denial of some political liberties. Weak forms of the Lee thesis argue for a prioritisation of economic development before freedom, which can be introduced at a certain level economic and social development. Strong forms hold that democracy and economic growth are incompatible, such that constitutional systems of authoritarian government have a direct economic advantage over democratic ones, ceteris paribus.
The Lee thesis assumes that if a person or society in poverty had to pick between a strong economy and political liberties, they have a better reason to choose the former over the latter, and a government should act in accordance with the overall social welfare function to prefer reducing poverty and improving material conditions. Lee's thesis also relates to his theory of Asian values, which held that liberal Western values of welfarism and equality are inapplicable in East Asian societies that prefer stability and progress. Similar arguments in favour of a pluralist conception of rights, which emphasise economic and property rights over social and political ones, have also been advocated in African countries.
As a theory of soft authoritarianism or benevolent dictatorship, the Lee thesis also holds that that economic growth under authoritarian capitalism is facilitated by specific constitutional and institutional mechanisms, such as efficient law enforcement; strong public institutions; restraint and deference in judicial review; legal exceptionalism, particularly in regard to national security issues; and the use of social engineering and policy to achieve consensus and maintain popularity.
Proponents point to the rapid economic development of Asian economies that adopted authoritarian policies at various points in their development, including Singapore, South Korea, Taiwan, and China, comparing these jurisdictions to less economically-developed democracies, such as India. Both statistically and methodologically, it is difficult to prove broader statements of the Lee hypothesis across countries. Empirical evidence establishing a link between democracy and growth is mixed, with Daron Acemoglu and Amartya Sen arguing against such a correlation, and Robert Barro and Samuel P Huntington providing arguments for some elements of the thesis.
Empirical evidence
From an empirical perspective, a number of studies have attempted to examine the direct and indirect relationship between democracy and economic growth. A body of literature suggests that there is either no definitive systematic effect of democracy on economic growth or that it is impossible to recognize whether democracy has an impact on economic growth.
John F. Helliwell's 1994 study employed a two-equation system for a sample of 125 countries during the period 1960–1985, finding that, although the positive indirect effect appears to offset the negative direct effect, the net effect of democracy on economic growth seems impossible to discern. A 2001 study by Maria Tavares and Romain Wacziarg, for a sample of 65 industrialized and developing countries over the period 1970–1989, also finds indirect growth effects and direct negative effects. In a 2002 paper, covering a panel of 106 countries covering the period 1951–1980, Charles Kurzman finds no significant direct effect between democracy and growth. A 2003 study by Baum and Lake, with data for a sample of 128 countries over a 30-year period, concludes that there is no direct influence of democracy on economic growth.
Using an instrumental variables technique for a sample of 175 countries during the period 1960–2010, Daron Acemoglu et al finds a positive and significant effect of democracy on economic growth. He and co-authors argue that democracy promotes growth by encouraging economic reforms, stimulating investment in primary education and health and mitigating social unrest. Acemoglu's opposing thesis, that inclusive institutions lead to economic success and extractive ones lead to economic failure, and that democracy is good and autocracy is bad for our economic well-being, have been popularised in his 2012 book, Why Nations Fail.
Mechanisms Political scientist Samuel P. Huntington was one of the first to argue that democracy leads to an increase in current consumption and a decrease in investment and production, thus penalising economic growth. Empirical evidence strongly suggests that democracies reduce income inequality through implementing redistribution policies, which could also be harmful for growth. Some studies have shown that democracies have direct or indirect negative growth effects, potentially by hindering physical capital accumulation as well as increasing public spending and consumption.
Democracies appear to be associated with higher school attainment rates, increased literacy rates, a better health care provision, higher life expectancy and lower infant mortality, and it is thus possible that democracies have a positive indirect impact via education and investment. A body of literature emphasises that democracy may also indirectly enhance growth via increased spending on public health, promoting human capital accumulation, and reducing income inequality.
Ethics and culture In his 1950 Nobel Prize lecture, Bertrand Russell asked, "If one man offers you democracy and another offers you a bag of grain, at what stage of starvation will you prefer the grain to the vote?" Correspondingly, a variant of the Lee thesis is also known, particularly in African developmental studies, as the full-belly thesis.
Empirically, it is methodologically difficult to test the claim that persons in authoritarian jurisdictions would have a preference toward economic growth and a relative indifference toward democracy and human rights. Amartya Sen has argued that it is possible that persons in developing countries would prefer to be freer and poorer rather than richer but less free.
Asian values
The Lee thesis, as part of Lee Kuan Yew's broader political philosophy, was closely related to his Asian values argument, which held that the value system of Asian countries, particularly East Asian countries, prioritised order, stability, and moral conduct over liberty, democracy, and human rights. Proponents of the argument regard democracies as conducive to social disorder, criminality, and the destruction of entire communities for the sake of individual rights. Lee's view, however, has been criticised as ahistorical and athoretical, misrepresenting and misconstruing Confucianism for politically expedient purposes.
Proposals for international human rights law to accommodate variations of the Lee thesis and Asian values have generally been rejected by international institutions. According to the Lee thesis, rights are subject to two trade offs: economy over liberty (i.e. citizens prefer economically efficient rights-ignoring government over inefficient, rights-affirming ones); and community over individual (i.e. citizens would prefer for an entire society to benefit at the expense of an individual, rather than an individual benefitting at the expense of society).
Economics
Condorcet paradox Suppose a society S with members denoted by . Let denote the set of all members except for . The action set available to each member is . For example, A is lighting a fire to keep warm, and B is not lighting the fire. When chooses A, negative externalities (e.g. smoke) are incurred for everyone else. Note, however, that when A is played, , that is, the benefit to the individual of having the fire exceeds the cost to the others of the smoke. Now, in a direct democracy, at each legislative session or election, the members in S can vote on whether to enact, maintain, or repeal a regulation that will restrict a given member, , from performing A. Since will always vote in favour of enacting or maintaining regulations against , eventually, as the game is repeated, none of the players will be allowed to perform action A. At this point, however, S will unanimously vote to abolish all regulations, resulting in the game starting again, thus illustrating a Condorcet cycle.
Policy design Authoritarian countries that have experienced rapid economic growth include Singapore under Lee Kuan Yew; China under Deng Xiaoping; Taiwan under Chiang Kai-shek; Korea under Park Chung-Hee; Spain under Francisco Franco; and Chile under Augusto Pinochet. Elements of the Lee thesis have received broad support by other Southeast Asian governments and officials, including by former prime minister of Malaysia, Mahathir Mohamad; president of Indonesia, Joko Widodo; and China's Ministry of Foreign Affairs.
In African development studies, the Lee thesis, or "full-belly" thesis, represents one of two major schools, alongside Amartya Sen's development as freedom model. African proponents of the Lee thesis—most prominently, Rwanda's Paul Kagame—have argued for strong, active, pro-market leadership following the economic miracles seen in Asia during the second half of the twentieth century. As a form of benevolent dictatorship, the Lee thesis is thought of as an alternative to the corrupt, personalistic autocracies and ineffectual democracies experienced by many African states.
As a development state model, the Lee thesis is exemplified by China and Singapore, which have resisted political democratisation despite rapid economic development, unlike jurisdictions such as Japan and South Korea, which have experienced increasing democratisation with economic development. The success of the Singapore model in Rwanda has also resulted in the term "Africa's Singapore" being used to describe the nation, which has itself become a developmental model for other African nations.
Constitutional design Arguing against the Lee thesis, Amartya Sen holds that the incorporation of democracy into a political system has a number of institutional and constitutional benefits that are enabled by multiparty electoral politics, political activism, and freedom of the press. Instrumentally, electoral democracy creates institutional incentives and disincentives for government and officials to perform more efficiently and in line with the demands of citizens, and such an incentive system relies upon a state that requires government to listen to citizens. Sen also argues that the construction and understanding of economic needs within a society may, in theory, only be possible if there is a degree of freedom of speech. Lee himself has denied any role of a free press in supporting economic development.
Proponents of the Lee thesis argue that it is possible to enjoy some or all of the benefits of apparent democracy within a soft authoritarian system, without implementing a liberal democratic constitution. For example, in order to increase foreign direct investment, a country may have an apparent procedural multiparty democracy, whilst being substantively controlled by a one-party state. Further, under the developmental state model, state intervention in economy and society is regarded as a key factor in contributing to economic growth.