Prepared for delivery at the ICES International Conference on Democratization, Ethnicity and Development. Colombo, Sri Lanka, August 19-21, 1993. Revised July 26, 1997. Preparation of this paper was supported by research assistantships provided by the School of International Service. John M. Richardson Jr. is Professor of International Affairs and Applied Systems Analysis and Director of Doctoral Studies at the School of International Service, American University, Washington, D.C. The research assistance of Shinjinee Sen, Gillian Barnes and Naren Kumarakulasingham and the technical support provided by Ann Held are gratefully acknowledged.

The question: "does democratization promote development?" has long concerned social scientists; however today, the relationship between democratization and development is no longer just an academic issue. Leaders in at least half of the world's nations are facing a more practical problem, how to create strong, sustainable democratic institutions and processes that will fulfill the high hopes of their peoples for political freedom and economic opportunity.

Creating such institutions requires the skills the designer - one who creates systems that produce desired results - as well as the politician. Leaders of new democracies must copy or adapt existing instituional models, or invent new ones. They must design processes to link those instutions together so that the functions of governance are performed effectively. Here are some of the questions they face:

Until recently, whether or not newly emerging nations should experiment with democracy was a matter of debate. For the next few years, at least, this question is moot. Communism and other forms of authoritarianism have been discredited, democracy is fashionable and there are strong international pressures for democratization. In more than one third of the worlds independent nations, people have recently opted for more open and democratic forms of government (McComb, 1992b, p. 17). A recent survey classified 75 of the world's nations as "free", an increase of nearly fifty per-cent since 1980 (Ibid., p. 20). Political scientist Samuel Huntington chose the year 1990 to mark the culmination of a "Third Wave" of democratization (1991).

How many new democratic experiments will succeed and how many will fail? Theorist Robert Dahl observes that democracy's history, over the long run, includes as many failures as successes: "Those who construct an ideal democracy in their heads soon find that it is far harder, or even impossible to construct that ideal in newly free states" (1989, p. 315). Adebayo Adedeji, formerly head of the Economic Commission on Africa, warns that democracy, unless properly handled, can become a "winner-take-all endeavor" that polarizes nations. He warns of politicians' tendency to engage in zero-sum behavior producing an "economy of affection, nepotism and corruption that has provoked military intervention and military regimes in too many African countries since independence" (1992, p. 30). Huntington notes that the first and second waves of democratization were followed by major "reverse waves" during which most regime changes were from democratization to authoritarianism. Factors contributing those reverse waves included weak democratic values among elite groups and the general public; severe economic setbacks ; social and political polarization; upper and middle class determination to keep leftist groups from power; breakdown of law and order ; intervention or conquest from non democratic foreign powers; and reverse "snowball effects" where collapse of one democracy spurred the collapse of others. He warns that a third reverse wave is possible if mass publics lose faith with the capacity of democracy to deliver on its promises (1990, pp. 280, ff.)

WHAT IS DEMOCRACY AND WHY DOES IT WORK?

What is democracy?; this question must be addressed before proceeding further. Now that international donors are requiring client nations to meet standards of democratization as a prerequisite for receiving financial assistance, defining democracy is no longer just a topic for philosophical discussion, it has become an important political issue. The degree to which universally applicable democratic principles exist is being hotly debated by donor agency professionals and political leaders.

Definitions of democracy found in scholarly literature usually focus on three areas - fundamental rights, institutions and processes. Some consensus exists regarding fundamental rights, but less regarding institutions and processes. It is in these latter areas that questions about designing the best democratic system for a particular nation arise.

Freedom of expression, equality, and popular sovereignty are most commonly defined as fundamental rights. Freedom of expression means that citizens have a right to express opinions about performance of their government to other citizens and to public officials. Included under freedom of expression are the freedom to access alternative sources of information and the freedom to form and join associations. Implicit in this right, but of great importance to dissident politicians is freedom from oppression. Equality means that all citizens, including members of minority groups, have the same rights and entitlements under the law (Ardito-Barletta, 1991, p. 165), that there is no discrimination with regard to eligibility for public office (Dahl, 1971, p. 3) and that the preferences of every citizen are weighted equally in the conduct of government (Ibid.). Popular sovereignty means that citizens have the right to choose their government and that the government must be responsive to their expressed preferences. Emergence of ethnic groups as political actors has made the domain of popular sovereignty an increasingly contentious issue. Ethnic minorities are seeking "self determination" when they feel their rights are threatened in democratically governed ethnically diverse states.

Democratic institutions are added to the list of fundamental rights by some, however I believe it is more useful to view institutions as political mechanisms that are used by a nations citizens to attain - and maintain - fundamental rights. Viewing institituons as serving that goal, rather than as "fundamental rights" in themselves, makes it easier to evaluate alternative institutional arrangements. Institutions most often cited as essential to a democracy include free and fair elections, a free press, and an independent judiciary. Many scholars also include political parties. Ardito-Barletta adds private property to the list (1991, p. 167). Cohen notes the importance of a "loyal opposition"(1991). Dahl points to the need for institutions that make "government policies depend on votes and other expressions of preference." Some scholars also emphasize that a well-developed civil society comprising a multiplicity of cross-cutting non-governmental organizations is an essential component of resilient democracies. However, since they have no formal role, non-governmental organizations are not usually included in enumerations of democratic institutions.

Among democratic processes, elections appear to be regarded as the most essential. The United Nations General Assembly has used the existence of periodic elections as a simple "litmus test" of democracy. Diamond and Linz specify "meaningful and effective competition among individuals and groups (especially political parties) as part of their definition of democracy (1989)." This competition must be held at regular intervals, for all effective positions of government power and must exclude the use of force (Diamond, 1989). Dahl emphasizes that meaningful elections must be fair and that all citizens must have the right to vote; no major social groups can be excluded (1971, p. 3). Weiner and Ozubudun's comparative study of competitive elections (1987) notes that not only the electoral process, but the outcome of the process must be meaningful.

Perhaps because he views democracy as an adaptive, learning system, Ardito-Barletta is particularly concerned with processes, which he characterizes as "feedback and adjustment mechanisms that force governments to respond and adapt to other viewpoints" (1990, p. 165); however he only describes desired outcomes of processes, not how to produce those outcomes. His list of desired outcomes includes: (1) the ability of parties to move in and out of power, (2) promotion and protection of human rights, (3) public debate of issues and (4) existence of checks and balances on the exercise of government power that function with the government's consent.

If democratic institutions and processes are means to an end, we must be clear about the end if judgements are to be made among options and about effectiveness. What can a nation's citizens legitimately expect from their experiments with democracy? It is useful, I believe, to distinguish between two schools of thought regarding this question. According to one school of thought, which I term ideological, democratic political institutions have value because they embody and are best able to guarantee fundamental human and political rights. According to the second school of thought, which I term instrumental, democratic political institutions have value because they provide the best way of promoting peaceful development.

The most eloquent proponents of the ideological school are political leaders who have faced oppression, for example Vaclav Havel, Aung San Suu Kyi, and the late Andrei Sakharov. Havel, in his memorable 1990 New Year's address described democracy as innate within human beings and nations and reflecting a capability to always be striving for something higher. In a similar vein, Aung San Suu Kyi, writing from confinement in 1991, spoke of democracy as expressing the highest aspirations of the human spirit. "It is man's vision of a world fit for rational, civilized humanity which leads him to dare and to suffer to build societies free from want and fear" (1991, p. 16). Democratic theorists such as Robert A. Dahl, Peter Anyang' Nyong'o, and Enrique Krauze (e.g. 1992) also fall within the ideological school.

Proponents of the instrumental school believe there is a strong causal relationship between democracy and development, but disagree about the causal mechanism and about what "development" means. I find it helpful to group them into three categories, free market democrats, human development democrats and system performance democrats.

Free market democrats equate development with economic growth and believe that higher growth rates mean that the fruits of growth will be widely distributed. A free market, capitalist economic system, integrated with the global economy is the principal requisite for high economic growth. Democracy either facilitates or is essential for this type of economic system. The title of Gary Becker's article, "Democracy is the Soil Where Capitalism Flourishes Best" captures the essence of this point of view.

Human developmentalists equate development with "quality of life" as measured by social indicators such as Morris D. Morris' Physical Quality of Life Index (PQLI) and the UNDP's Human Development Index (HDI). Their point of view is predicated "on the rational proposition that to achieve and sustain development, it is necessary to ensure the education and training, health and well being and vitality of the people so that they can participate fully and effectively in the development process." The process of development must emphasize social transformation, rather than economic growth. Democratic institutions provide the best way of empowering grass roots participation and the growth of intermediating non-governmental organizations which are regarded as essential for social transformation.

System performance democrats do not necessarily share a common vision of development. What they do share is a belief that democratic institutions are more resilient and adaptable in facing the complex problems that development poses. Why should this be so? Karl Deutsch provided the foundation for this point of view when he described governance as a process of "communication and control" (1963, esp. pp. 193,ff.) My own early work emphasized the importance of self-corrective feedback mechanisms in democratic institutions (1974, 1976). Dankwart Rustow notes that "Situations that confront rigid dictatorships with insoluble dilemmas ... allow democracies to show themselves at their best as mechanisms for change, specifically for orderly change among parties in power (1990, pp. 91)." According to Ardito-Barletta, democratic regimes are more effective at learning than authoritarian ones. Periodic renewal of popular mandates through elections forces revision of goals, programs and policies; political leaders are replaced when the majority rejects their goals or when programs fail. Democracy at its best becomes a permanent educational process that empowers citizens to learn about the ingredients of effective policy through a process of communication, competition, trial and error.

DOES DEMOCRATIZATION PROMOTE DEVELOPMENT?

Both ideological and instrumental reasoning have motivated democratic experiments in the Global South. Principles embodied in the Universal Declaration of Human Rights and the Helsinki Accord exerted a powerful appeal on students and intellectuals in authoritarian regimes. The Western democracies have always provided an appealing model, linking political freedom and high levels of material prosperity. Many only view democracy is simply seen as an untried and newly feasible alternative to corrupt, discredited regimes and economic philosophies that have failed to deliver on long overdue promises of a better life. "A better life" means freedom from oppression and the satisfaction of very basic human needs - for employment, physical security, clean water, food, adequate housing, education and, perhaps, opportunity for advancement.

Historically, economic failures and economic crises have often contributed to the downfall of democratic as well as authoritarian regimes (Linz and Stepan, 1978; Lipset, 1987). If new democracies fail to deliver on the promise of a better life, probably they too will become discredited and supplanted. Thus, the instrumentalist premise (and promise) - that democratic institutions provide a "means" to the "end" of economic and social development merits close scrutiny. Unfortunately the supporting evidence is not compelling. If democratic institutions were intrinsically better at promoting economic development, one might expect to find statistically significant relationships between democratization and measures of economic performance. This hypothesis was tested by Morris and Adelman for the nations of Europe during the period 1850-1914 (1988) and by Vahanen for 147 contemporary nations (1990). Neither study showed a significant relationship.

By contrast, widely cited examples seem to support the proposition that authoritarian regimes do facilitate development. The "four Asian dragons" - Taiwan, Singapore, Hong Kong and South Korea" - and the "little dragons" - Malaysia and Thailand - are often promoted as successful models, deserving of emulation by other Global South nations. In Latin America, Pinochet's Chile is widely cited as the most successful example of "structural adjustment" economic reforms (Nelson 1989; 1990). Until recently, Cote d'Ivoire and Kenya were viewed by many as Africa's development "success stories (Cheru, 1989)." All of these nations were governed by authoritarian or near-authoritarian regimes during the period that policies contributing to "successful development" were implemented. Contravening empirical evidence is offered by Becker (1991), but Becker's analysis does not demonstrate that democratic regimes are effective in promoting development, only that we should carefully weigh arguments that authoritarian regimes are more effective.

Why might authoritarian regimes be more effective in promoting development. The case is made that they are superior in implementing three types of needed development policies. First is policies that require short term sacrifice for longer term growth. These include giving priority to investment over consumption and implementing unpopular structural adjustment reforms including privatization, reduced subsidies for basic services, reduced entitlement programs and elimination of price controls. Second is a capacity for rational long-term economic planning and skillful government intervention to achieve economic objectives. Central to this argument are the examples of Korea, Taiwan and Singapore, noted above. Proponents of this point of view might point to Singapore's Lee Kuan Yew as the ideal model of a development-oriented benevolent despot. Authoritarian regimes are also viewed by some as having a greater capacity for maintaining political stability and stable economic policies. Stability provides a "favorable climate" for needed outside investment. Barsh notes that "A repressive but predictable regime may be more attractive to investors than a tumultuous democracy with frequent changes in leadership and laws (1992)."

Those who question the relationship between democratization and development also point to democracy's shortcomings. According to Ardito-Barletta (1990), democracies are prone to both immobilization by political stalemates and wide swings in policy as governments change. Political factions, upon gaining power, may favor their supporters, to the detriment of the public good. To win elections, they may adopt popular policies that are not sustainable and be willing to sacrifice medium or long-term gains. Such policies may also cause poor or highly volatile economic performance contributing to political instability (Richardson, 1987; 1991). Instability often produces additional adverse economic impacts, further complicating the task of governance.

Barsh's study of democratization and development points out that democratic institutions can create conflict by offering greater opportunities for competing factions to influence the organs of the state. Where one faction succeeds in imposing its will, or attempts at compromise fail, violent conflict can result. Typically, instability and violent conflict diverts resources to the security forces, strengthens their power and can even provoke the overthrow of democratic regimes. Successful compromise, on the other hand, can lead to inefficient, even contradictory programs and the types of problems noted by Ardito-Barletta and myself. It is clear that creating a democracy is no panacea for attaining development, however development is defined.

DOES DEVELOPMENT PROMOTE DEMOCRATIZATION?

If democratization does not necessarily promote development, does development promote democratization? The evidence supporting this point of view - and the view that lack of development impedes democratization - is stronger. Among its supporters are sociologists and political scientists, concerned with the "requisites of democracy" who focus on sociological and attitudinal variables that intervene between "development" and viable democratic regimes. In two classic studies (1959, 1960), Seymour Martin Lipset showed a strong statistical relationship between levels of democracy and levels of economic development in a sample of nations. He argued that both economic development and relatively wide distribution of wealth, were necessary to achieve the popular confidence in the legitimacy and effectiveness of government necessary to sustain democracy. Daniel Lerner (1958) and Karl Deutsch (1960) posited similar relationships, arguing that stable democracy required social and political mobilization, which was supported by rising levels of development. These studies were consistent with a body of theory dating back to Aristotle's Politics and de Tocqueville's Democracy in America, which posited a strong middle class, preferably self employed, as a requisite of democracy.

Recent work, also tracing its roots to de Tocqueville, has also emphasized the importance of a strong civil society. The recent democratic reforms in Taiwan, South Korea and Chile have been offered by some as evidence that economic development must precede democracy, indeed, as a justification for authoritarian regimes during an "intermediate" stage of development. In the case of South Korea, Soong-Joo Han, points out that economic development has resulted both in a larger, more politically conscious middle class and the growth of a more pluralistic and organized civil society. While these studies conclude that development does support democratization, they make it clear that the relationship is not simple. The emphasis on intervening sociological phenomena is consistent with the international development literature which warns that human as well as economic factors must be taken into account (Cornea, et. al. 1987; Cheru, 1989; UNDP, 1991), that not only growth, but distribution of economic output is important (Adedeji, 1992; Ardito-Barletta, 1990) and that development can be destabilizing as well as stabilizing (McCarthy and Zald, 1977; Tilly, 1978; Richardson, 1987). Vernon Ruttan concludes that it is not useful to view development and democratization as an either - or proposition. Rather there is a degree of "cross elasticity" between economic and political resources, the dynamics of which are complex and, in empirical terms, poorly understood.

WHAT CHALLENGES DO NEW DEMOCRACIES FACE?

Our examination of the relationship between democratization and development suggests that democratic institutions must do more than simply protect human rights and provide for popular participation in decision-making. Sustainable democratization (the rooting of legitimate, resilient and adaptable democratic institutions in a society) must probably occur in concert with a development process that involves both economic growth and social transformation. But how is this to be accomplished?

Historically, democratic institution-building has been a process of responding to external and internal challenges while accommodating conflicting interests and goals that often seemed equally desirable. Viewed retrospectively this process now seems evolutionary in older established democracies, but it seemed more chaotic and uncertain to those involved. The institutions, procedures, precedents of these nations, well as the supporting political culture and civil society have been created over a period of decades or even centuries by a combination of conscious design, experimentation, good luck and just "muddling through." This fact is often ignored by development experts representing donor agencies who are promoting or even insisting upon particular formulas for democratization. No wonder peoples and leaders of Global South nations, challenged by urgent needs to resolve complex issues, involving conflicting goals, in straightened economic circumstances, are tempted to opt for the simple solutions that authoritarianism appears to offer.

Among the particularly vexing political issues that must be faced are the following:

1. Expertise versus accountability: The tasks of governance, development and economic management require specialized, technical knowledge. How can this expertise be fully utilized, while implementing systems of accountability that will resist the universal predisposition of policy elites to "advance their own narrow interests in the name of the public good and succumb to the temptations of power" (Dahl, 1989, p. 338)?

2. Growth versus equity: In order for a nation to grow economically, the freedoms, incentives and motivations of those with resources and entrepreneurial ability must be protected and strengthened. How can this be done while devising basic social safety nets that respond to the rising - and potentially destabilizing - aspirations of the disadvantaged created by enhanced communication, freedom and political power?

3. Public order versus human rights: Both democratization and economic development are, at least potentially, destabilizing, as noted above. But democratic institutions require a degree of stability to function. How can public order be maintained, in the face of destabilizing forces that may include organized, armed militants, while protecting human rights?

4. Realities of power vs. the need for reform. The success of democracy in many Global South nations requires the acquiescence, if not the active support of powerful and long-dominant political, economic, landowning and military elites. Not only are these elites powerful, they are often interlinked and mutually supportive. How can political and economic reforms which realize the promise of democracy be implemented if those reforms require that dominant elites relinquish some of their power?

5. Short-term vs. long term payoffs. Even in older stable democracies, - the United States being a prime example - electorates are reluctant to accept short-term pain for long term gain. Political leaders facing elections in new democracies must also deal with the need for painful economic reforms, resulting from years or even decades of economic mismanagement. How can the citizens of these nations, many of whom are already impoverished and disillusioned, be persuaded to make further sacrifices in the hope of rationalizing national economies and achieving sustainable economic development in the future?

6. National identity versus communal identity. A principal finding of the political development literature is that an important first step in nation building is establishing a national identity. However a first consequence of democratic reforms in many new nations has been rising, even violent demands for communal self expression. Many communal groups now seek identity as nations rather than within nations. How can conflicts between communal and national identity be managed, especially in the difficult cases where communal groups are intermingled, without divisive, destructive ethnic conflicts and civil wars?

Larry Diamond has raised similar issues in a thoughtful article based on a comparative study of democracy in 26 countries. Democratic polities, he argues "find themselves saddled with certain "built in" paradoxes or contradictions, which are not easy to resolve. He identifies three paradoxes as central (1990, p. 49). The first is conflict versus consensus. "Democracy requires conflict - but not too much; competition there must be, but only within carefully defined and universally accepted boundaries. The second paradox is representativeness versus governability. The system of political competition must produce a government stable and cohesive enough to represent and respond to competing groups and interests in society without being paralyzed or captured by them. "Representativeness requires that parties speak to and for...conflicting interests. Governability requires that they rise above them." Diamond's third paradox is consent versus effectiveness. "Democracy requires consent. Consent requires legitimacy. Legitimacy requires effective performance. But effectiveness may be sacrificed to consent."

Resolving these paradoxes and key political issues in a new democracy requires consensus building. This must be done continuously and effectively for new democratic regimes to gain legitimacy and resiliency. Building consensus requires an environment characterized by a reasonable degree of public order and physical security. Democratic nation building is impossible in an environment of protracted social conflict (Azar, 1987). Public order can only be maintained in a democratic regime if the potential for violent conflict is kept within acceptable bounds. When the potential for violent conflict is high, minor disturbances, which are certain to occur in any Global South nation are likely to flash into violent, protracted conflict. A high potential for violent conflict results from feelings of deprivation and alienation among major segments of a nation's population and/or from the presence of organized, militant factions with a commitment to violence as their principal strategy of political action. Feelings of deprivation and alienation occur when individuals in a society perceive a wide gap between the circumstances of their lives - both quality and opportunity - and what they have a right to expect. Alienated and deprived individuals are also more likely to join and look favorably on militant groups. Where the failure of a society to deliver on its promises is perceived as linked to ethnic identity, the prospects for alienation and the mobilization of militant factions is increased.

Daily decision-making, negotiation, and persuasion are the work of political leaders in new democracies. Many observers believe that the wisdom and skill with which leaders do their work is pivotal in determining whether new democracies succeed or fail. While political leaders do make a difference, they are not autonomous. What they do is shaped by the choices they are called upon to make, by the options available and by the operative values and information that inform their decisions. This is true of political followers as well. Values, options and information are shaped by institutions. Institutional structures, like political leaders, make a difference.

Among the institutional structures that will make the most difference in new democracies are those that shape the relationship between government and the economy. Leaders of new democracies will face few, if any, more important tasks than designing these structures and seeing to it that they function effectively.

Most governments of Global South nations have been deeply involved in managing the economy since their independence. Now many are simultaneously experimenting with capitalism and democratization. Conservative Western politicians view free market economies and democratic political institutions as inextracably linked. For them, economic freedom - meaning capitalism - is at least as important as political freedom. Capitalism is now being aggressively promoted by the planners and economists of the world's most influential international financial institutions, the World Bank and the International Monetary Fund. Structural adjustment programs for Global South nations, which now provide a principal rationale for Word Bank and IMF lending are intended to establish viable free market economies and link them with the global economy.

Most leaders of new democracies are willing supporters of the push toward free market economies. Command economies, like authoritarian regimes, have been discredited. Capitalism is widely viewed as responsible for the high material standard of living in the western democracies and newly emergent Asian dragons. Leaders who do resist or who are moving too slowly in subjecting their social economies to free market "shock treatment" can be subjected to pressure. Typically, their nations face heavy debt burdens and balance of payments shortfalls. This provides World Bank and IMF experts with leverage to intervene in domestic economies through "conditionalities." If conditionalities are not met, loans and grants are withheld and fragile, import dependent economies can - almost literally - grind to a halt.

What options for government - economic relations exist within a free-market capitalist framework that will be acceptable to developed, donor nations and international lending agencies? In a recent article, Lester Thurow, the Dean of MIT's Sloan School of Management suggests that two distinct forms of capitalism are available as models (1992). Individualistic capitalism is characteristic of the United States and British economies and championed by their political leaders. The form of capitalism practiced in Japan and Germany differs from the U.S. - British model, according to Thurow, in that government assumes a greater role in economic management, social values are given higher priority and businesses are expected to temper competition with cooperation when this will serve the national interest. Thurow terms this communitarian capitalism.

Individualistic capitalism conforms most closely to the model first proposed by Adam Smith in The Wealth of Nations. The underlying theory is that the common good is most likely to be realized when individuals, as individuals seek to maximize their economic well being in a free, competitive environment. In this system, wage differentials are large, individuals are assumed to be responsible for creating their own skills, the goal of firms is profit maximization and the admired role model is the individual entrepreneur or, in Thurow's words, "The Lone Ranger." Within the firm, customer and employee relations are viewed solely as a means of earning higher profits for shareholders. Social welfare programs are viewed as a "regrettable necessity brought about by people who will not provide for their old age, employment or health." The role of government in this system it to "get out of the way." Its primary economic function is to protect private property rights, however it may support research and development in "precompetitive, generic, enabling technologies."

In communitarian capitalist economies, business groups, rather than the individual are viewed as the most important actors; teamwork and firm loyalty are important values. Developing managerial and employee skills is viewed as collective responsibility. Firms maximize market share rather than profits; their primary goal is "strategic conquest." Within the firm, employees are viewed as the principal stakeholder, customers are second and shareholders third. As firms are assumed to be responsible for the well being of employees, the government is assumed to bear some responsibility for the nations citizens and especially for ensuring that everyone has the necessary skills to compete in the market. The role of government is to promote national economic growth by developing national economic strategies and by investing in firms in order to strengthen their international competitive position and to protect them from foreign raids.

To date, the individualistic capitalist model has been more widely publicized and been more influential in the thinking of the international financial institutions. This reflects the economic and political dominance of the United States during the four decades following World War II. Now U.S. dominance is receding in the face of competition from Japan and a German-Dominated Common market. Concurrently, Germany and Japan are becoming more influential as donor nations and in international lending and development organizations. This should provide leaders of new democracies with an opportunity to experiment with the communitarian model as an individualistic capitalism, should they choose to do so.

DESIGNING DEMOCRATIC INSTITUTIONS: PRINCIPLES

Throughout this paper, I have characterized democratic institution building as task involving design, defined earlier as the creation of systems that produce desired results. This - somewhat speculative - concluding section presents three design principles that may be helpful in guiding the institution building process. It it is an attempt to reflect on the democratization process from the perspective of my experience as a practitioner in the design sciences of systems engineering and applied systems.

The school of thought most consistent with this perspective is the system performance democrats who assert that democracies work better than other forms of government because of their superiority as feedback control systems. Governance is viewed as a system of communication and control, in other words as a system in which political leaders initiate program and policy changes based on information that achievements are falling short of desired goals. Useful design principles for new democracies, then, will be those that facilitate good performance as feedback control systems.

But how can we define and measure good performance? The problem of defining "development," which is often equated with good performance has already been discussed. In my view a more useful and more "democratic" definition might focus on the perceptions of a nations citizens. We might say a nation's democratic institutions are performing well when most of a nation's citizens feel good about the accessibility and responsiveness of their government and are basically satisfied with the daily circumstances of their lives, including opportunities that exist to improve those circumstances. The circumstances that produced those good feelings might differ significantly from culture to culture. When there was good performance it would also mean that no significant segment of the nation's citizens was experiencing severe alienation. Alienation would be viewed as severe if there was a significant increase in incidents of violent political conflict or in support for militant groups committed to violence as political action strategy. To take the question of sustainability into account, keeping the social, economic and ecological foundations supporting current levels of satisfaction and non-alienation in good repair, would need be included in our definition. We would want to make sure that social, economic and ecological systems were not being degraded by unsustainable polices and programs with short-term popular appeal (Goodland et. al, 1991; Meadows et. al., 1991).

How can a democracy be designed to consistently produce good performance, defined in these broad terms? Democracy in Developing Nations, the series edited by Diamond, Linz and Lipset (1989) is among the most recent of a number of works which argue that good leadership is essential. A good leader has the wisdom and political skill to sense the public mood, build consensus, mobilize support, inspire and justify needed sacrifices, marshal resources, attract other good leaders and do whatever else is necessary to function effectively. Unfortunately there is no agreement on how to design systems that will produce good leaders or to predict, before the fact, whether a particular individual will turn out to be a good leader. If there is no clear path to the selection of good leaders, then it is particularly important to be able to get rid of bad ones. Democracies are superior to other forms of governance in this regard. But how can capable leaders, once chosen, be motivated to serve the public interest? The key is to design a system that creates alignment between the leader’s personal interests and good performance.

Political Power and Effective Leadership

Even if a particular leader is capable, there is no assurance that he or she will give the highest priority to decisions, policies and programs likely to produce good performance. We need to ask what motivates leaders to do what they do? It is useful to assume that the desire to gain maintain political power is a primary motive. A first design principle follows.

PRINCIPLE I. The system should be designed so that political power is the reward for good performance.

Democratic institutions should be designed, insofar as is possible, so that leaders capable of delivering good performance are selected for positions of power. More important, they should be designed so that the activities most likely to enhance and perpetuate a leader's power will also be the activities most likely to produce good performance. In other words good performance should be rewarded with power; a leader should lose power when the system performs badly.

There is a corollary that is particularly applicable to developing nations where, historically, political power has been seen as a pathway to economic security and loss of political power has sometimes meant loss of economic security, or worse. The economic rewards associated with power should be just sufficient to facilitate good performance. Political leaders should be given sufficient means to resist manipulation by those with wealth, but not so great as to make economic gain a motivation for seeking high office. Similarly, since getting rid of bad leaders is at least as important as holding on to good ones, the only sanction for bad performance should be the loss of power. Everything possible should be done to encourage the graceful departure of leaders who have failed when it is time for them to go. From the perspective of the nation as a whole, it is much more important to get rid of bad leaders than to punish them.

Political Power and Expectations

Establishing institutions and processes that reward good performance with power will not automatically result in good performance. It is also necessary that political power be sufficient, if exercised by a good leader, to have a positive impact on performance. This leads to a second principle:
 

PRINCIPLE II. The system should be designed so that there is consistency between the expectations for performance associated with high offices and the power to influence performance given to incumbents of those offices.

For the leader to be able to influence performance, he or she must have both sufficient information about the system and effective mechanisms of control. There is a considerable literature on this subject, but not much evidence that the findings of this literature have been applied to the design of political institutions.

In general, implications of this principle provide a strong case for decentralization. Highly centralized political systems that concentrate power in a few top offices are unable to handle the volume of information necessary to exercise control intelligently, even assuming that effective control mechanisms are available. Attempting to reduce the entropy (complexity) of the system, often through authoritarian means, is a common response of leaders who are desperate to simplify their task of management and to exercise control over a system that may be inherently uncontrollable. The failures of "top down" planning and management, increasingly recognized by international development specialists are one manifestation of this pathology. Failure of the command economies of Eastern Europe and the Soviet Union was as much due to failures in information management and control mechanisms as to the failure to provide incentives.

This principle also provides a message for politicians seeking high office in democratic systems. The temptation to unrealistically inflate expectations associated with an office, during political campaigns, should be resisted. The more ignorant the electorate, the more inflated the campaign promises are likely to be. The propensity for aspiring leaders to promise more than they can deliver is taken for granted by cynical electorates in established democracies, but this form of lying is potentially destructive, nonetheless. A democratic system should include mechanisms that provide citizens with independent, accurate information about what expectations are reasonable. This is an important function of independent newspapers and electronic media.
 

Error correction

In a foresighted book on international development, Peter Berger urged development practitioners to be guided by the "postulate of ignorance (1974)". By this he meant that it is impossible to know anything, for sure, about the complex processes of development. Berger's postulate does not justify inaction, but does point to the need for effective mechanisms of error correction. A third design principle addresses this:

PRINCIPLE III. A democratic system must have the capacity to change policies, to change leaders and, if need be, to change itself, if things are going wrong. The magnitude and response time of change should be appropriate to the problem.

Error correction mechanisms are essential in new democracies (indeed, in all nations) because mistakes are inevitable and will occur at all levels. Programs and policies will fail; venial or incompetent leaders will rise to positions of power; electoral and constitutional systems will produce outcomes different than those intended. Performance failures may be the result of ignorance, bad judgement or unanticipated changes in circumstances. It is the greater ability to detect and correct mistakes, not the ability to avoid them, that most differentiates democratic systems from authoritarian ones. Achieving good performance by quickly detecting and correcting errors is what a proper feedback control system does. What can be learned from the design principles of feedback control systems that will be helpful to designers of democratic institutions?

A good error controlled regulator requires, first of all, accurate information about the current level of performance in relative to desired goals. In a political context, this means that leaders must have accurate information about levels of satisfaction and alienation among their citizens and about the sustainability of their programs and policies. Citizens need accurate information about how the government is doing, about the consequences of government actions and about circumstances affecting their well being. As Dahl emphasizes (1971), they need to be free to express their preferences and to communicate them to political leaders. It is particularly important that clear channels exist for communicating bad news to political leaders. Bad news is the news that leaders most need to know so that if possible, they can initiate corrective action before problems become intractable. In authoritarian systems and for powerful leaders in democratic systems both sycophancy (telling leaders only what they want to hear) and "killing the messenger" (punishing the bearer of bad news) are perennial problems.

Good information ensures that a feedback control systems knows where change is needed but does not ensure that the magnitude and timing of corrective measures will be appropriate. If the regulator is too sensitive and/or the magnitude of its changes are too large, oscillation may result. In democratic systems, a politician who bases his policies on daily polling results provides an example of this problem. Another example is unstable coalitions in parliamentary systems which may produce several changes in government during a year. At the other end of the spectrum, the system needs to be sufficiently sensitive so that correctable problems are dealt with in a timely manner through changes in policy or, if necessary changes in leadership. While it is difficult to be precise about the timing and magnitude of corrective measures, it can be said that policy changes should be used as corrective measures more frequently than leadership changes and that leadership changes should be more frequent than constitutional changes. Beyond that, as with so many problems faced by democratic systems, both leaders and citizens need to be open to experimentation, trial and error.
 
 

DEMOCRACY: THE WORST SYSTEM - AND THE BEST

Winston Churchill, in an often repeated statement, characterized democracy at the worst possible political system, except for all the others that have been tried. It is the worst possible system, because it comprises fallible human beings - citizens and political leaders - who will often make bad choices and bad policies as they struggle with a problems of a complicated world. As the world becomes more complicated the proportion of bad choices and policies are likely to increase. Moreover the shortcomings of democracy and democratic leaders are vigorously displayed for all to see. Indeed public display of shortcomings is an essential part of the process.

Democracy may be a better system than others that have been tried, because a commitment to bad choices, bad policies, bad leaders and even bad constitutions is not irrevocable. There is an opportunity for citizens and the leaders they choose to discover what has gone wrong, to make corrections and to learn from the experience.

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