Dictatorship Democracy and_Dev

Many of the more remarkable advances in civilization even in historic times took place in somewhat democratic or nondictatorial societies such as ancient Athens, the Roman Republic, the North Italian city-states, the Netherlands in the seventeenth century, and (at least after 1689) Great Britain. The explanation for the disproportionate representation of nonautocratic jurisdictions in human progress is presented later in the article.

The theory offered here applies to communist autocracies as much as to other types, though the theory needs to be elaborated to take account of the "implicit tax-price discrimination" pioneered by Joseph Stalin. This innovation enabled Stalinist regimes to obtain a larger proportion of social output for their own purposes than any other regimes had been able to do. This explained Stalin's success in making the Soviet Union a superpower and the great military capacity of many communist regimes. It also generated a unique dependence of the system on its management cadre, which ultimately proved fatal. For how the offered theory applies to communist autocracies and the societies in transition, see Clague and Rausser 1992, pref., chap. 4; Murrell and Olson 1991; Olson 1993.

Schumpeter's analysis is in his "Crisis of the Tax State," written in the highly taxed Austria-Hungarian Empire late in World War I; Ibn Kalduhn's is in his classic, The Mugaddimah.

A mathematical and a geometrical proof of this conclusion and an analysis of many other technical questions raised by the present theory is available on request.

When war erodes confidence about what the boundaries of an autocrat's domain will be, an autocrat's time horizon with respect to his possession of any given territory shortens-even if he believes that he will remain in control of

Vol. 87, No.3

some territory somewhere. In the limit, complete uncertainty about what territory an autocrat will control implies roving banditry. The advantages of stationary banditry over roving banditry are obviously greatest when there are natural and militarily defensible frontiers. Interestingly, the earliest states in history emerged mainly in what one anthropologist calls "environmentally circumscribed" areas, that is, areas of arable land surrounded by deserts, mountains, or coasts (see Carneiro 1970). The environmental circumscription not only provides militarily viable frontiers but also limits the opportunity for defeated tribes to flee to other areas in which they could support themselves (as Carneiro pOints out). This in tum means that the consensual democracy characteristic of the earliest stages of social evolution is, in these geographical conditions, replaced by autocratic states earlier than in other conditions.

For more examples of other types of reason, see Olson 1990.

In the interest of brevity, democracy is here defined as competitive elections, social pluralism, and the absence of autocracy, rather than in terms of universal suffrage. Although how a narrower suffrage turns into a wider suffrage can be explained by straightforward extensions of the logic of the theory offered here, developing these extensions and testing them against the historical evidence would not be a small undertaking.

For striking evidence on how the growth of cities was much greater in medieval and early modem Europe in democratic or less autocratic regimes, see DeLong and Schleifer 1992. In effect, the DeLong and Schleifer paper is a test of the advantages of democracy that I put forward.

References

Banfield, Edward. 1958. The Moral Basis of a Backward Society. Glencoe, IL: Free Press. Camiero, Robert L. 1970. "A Theory of the Origin of the State." Science 169:733-38.

Clague, Christopher, and Gordon Rausser, eds. 1992. The Emergence of Mllr1cet Economies in Eastern Europe. Cambridge: Basil Blackwell.

DeLong, J. Bradford, and Andrei Schleifer. 1992. "Princes and Merchants: European City Growth before the Industrial Revolution." Harvard University. Mimeo.

Hardin, Russell. 1982. Collective Action. Baltimore: Johns Hopkins University Press. Hobhouse, L. T., G. C. Wheeler, and M. Ginsberg. 1965. The Mllterial Culture and Social Institutions of the Simpler Peoples

London: Routledge & K. Paul. Kalduhn, Ibn. 1967. The Mugaddimah. Trans. Franz Rosenthal. Princeton: Princeton University Press. Kiser, Edgar, and Yoram Barzel. 1991. "Origins of Democracy in England." Journal of Rationality and Society 3:396 Lake, David A. 1992. "Powerful Pacifists: Democratic States and War." American Political Science Review 86:24-37.

Murrell, Peter, and Mancur Olson. 1991. "The Devolution of Centrally Planned Economies." Journal of Comparative Economics 15:239-65.

North, Douglass. 1981. Growth and Structural Change. New York: Norton. North, Douglass, and Robert Thomas. 1973. The Rise of the West. Cambridge: Cambridge University Press. Olson, Mancur. 1%5. The Logic of Collective Action. Cambridge: Harvard University Press. Olson, Mancur. 1%7. "Some Historic Variation in Property Institutions." Princeton University. Mimeo. Olson, Mancur. 1982. The Rise and Decline of Nations. New Haven: Yale University Press.

Olson, Mancur. 1986. "A Theory of the Incentives Facing Political Organizations: Neo-corporatism and the Hegemonic State." International Political Science Review 7:165-89.

Olson, Mancur. 1990. "The Logic of Collective Action in Soviet-type Societies." Journal of Soviet Nationalities 1(2): S-33.

Olson, Mancur. 1993. "From Communism to a Market DeSchumpeter, Joseph. "The Crisis of the Tax State." In Joseph mocracy." Center for Institutional Reform and the Informal A. Schumpeter: The Economics and Sociology of Capitalism, ed. Sector. Typescript. Richard Swedberg. Princeton: Princeton University Press

Sandler, Todd. 1992. Collective Action: Theory and Applications. Sheridan, James E. 1966. Chinese Warlord: The Career of Feng Ann Arbor: University of Michigan Press Yu-hsiang. Stanford: Stanford University Press.

Mancur Olson is Distinguished Professor of Economics and head of the Center for Institutional Reform and the Informal Sector, University of Maryland, College Park, MD 20742.

576