For me, whether political democracy accelerates economic growth or not is a mute question. Democracy should neither be judged nor be justified by its instrumental values. Democracy itself has an intrinsic value, which makes it valuable. Democracy, therefore, should not be justified for any of its instrumental value, rather it should be upheld for its intrinsic value. In other words, democracy is valuable in its own merit, not because it contributes to something. If democracy exhibits any instrumental value with respect to some traits such as economic growth, that is only an add-on. Well and good. So, even though any correlation does not exist between democracy and economic growth, it does not devalue democracy as a holistic concept.
That said, it is important to recognise that beyond political democracy, the notion of democracy has multiple dimensions- economic democracy, social democracy, cultural democracy, etc. Needless to say, all these aspects of democracy are inter-related and interdependent - for example, political democracy is essential for cultural democracy. The importance of economic democracy lies in the fact that it strongly influences other terrains of democracy. Economic empowerment of all sections of people and non-discrimination in all economic spheres are an important ingredient for social democracy.
There was a time when economic theory used to suggest that uneven resource allocations among various socio-economic groups accelerate economic growth. The argument was that if more resources are allocated to richer sections of society, more would be saved and invested, as the propensity to save is higher among the rich. That would enhance economic growth. On the other hand, if more resources are directed to the poorer sections of society, they will consume most of them, as their propensity to consume is high. So, they would save and invest less, resulting in low economic growth. When the question of distribution of growth-benefits was raised, the 'trickle-down' theory was propagated, meaning that the benefits would trickle down from the richer section to the population who remain at the bottom of the social ladder. Some people even suggested not to even raise the issue of distribution, because the traditional argument was - 'let the pie grow bigger and we all shall then have a share of it'.
But the evidence later confirmed two things; first, in some cases, the pie got bigger, no doubt; but the share was unequal. This is because, the distribution of economic growth is decided during the production process itself - as to how the production process has been organised, which technologies - labour-intensive or capital-intensive ones - have been used. Distribution of growth is endogenously determined and cannot be an after-thought. Second, it has been found that if a society starts with a fairer distribution of its various endowments, that accelerates and sustains higher growth. The suggestion that the richer people have a higher propensity to save seemed to be a myth and the argument for an unequal distribution of resources resulting in higher economic growth fell apart.
Economic democracy implies a level-playing field for everyone. That requires equal opportunities for all in various spheres. In order to avail the opportunities, capabilities of every individual must be built, which, in turn, would need equal access to basic social services like health services, educational opportunities, etc. The equal access to opportunities, however, should be ensured not only in quantitative terms, but also in qualitative terms. Thus, everyone should have access to quality education, quality health services, etc. Once human capabilities are built, equal opportunities would require equal access to productive resources like land, credit, financial assets, employment opportunities, information and communication technology (ICT). Furthermore, equal access for various groups must be ensured for community commons like forests, water bodies and other environmental resources.
Second, economic democracy requires that the voice and autonomy of everyone are protected. People must participate in the decisions that impact their lives. And participation should not be only notional, they must be but effective. Sometimes, participation of the poor and the marginalised groups become more of a token, with their effective voices not heard. There is no alternative to effective participation of people in the decision-making process that affects people's lives. Effective people's participation cannot be ensured without their equitable representation in the process. In economic debates, dialogues, discourses as well as policy decisions, people's representation and participation are key, without which economic democracy cannot sustain.
Third, economic democracy also requires equitable benefits for all citizens. If equal access to capabilities and opportunities; equal participation and equitable representation are ensured; groups, part of the economic process, would equitably benefit. Yet in a society, there would be groups of people such as old people, people with disabilities, marginalised groups who would not be part of the economic activities and thus would not benefit from either of the workings of the markets or the growth itself. Specific and targeted measures like social assistance and social protection will be required to ensure that they are also part of economic benefit cycles.
Apart from equal access to capabilities and opportunities; equal participation and equitable representation, and equitable benefits in outcomes; economic democracy would also need three specific things. First is universal human rights and human security. Every citizen of the country must be treated equally in the eyes of law and all kinds of security must be extended to everyone. Laws of the land and their execution must be the same for every group of the county, irrespective of their religion, ethnicity, languages, etc. Second, economic policies must be equitable, taking all kinds of human deprivations into consideration. If needed, policies should have the required tilting towards those who are deprived and dispossessed. Thus, the economic policy matrix of a country must be formulated with economic democracy in mind. Finally, the governance and the institutional structure of the economy must be non-discriminatory and equity-friendly. Economic institutions must hold the values of economic democracy. Such values would require a strong framework of transparency and accountability, which would hinge on a strong monitoring and evaluation framework and a robust credible statistical system.
In recent times, issues and concerns of political democracy have dominated the debates, discussion and discourses of our national dialogues. But one must remember that in the absence of economic democracy, in the long-run, neither human well-being will be ensured, nor political democracy will be sustainable. Therefore, a course correction is needed and the national attention in Bangladesh should also be focused on economic democracy.
Dr Selim Jahan is Professorial Fellow, BRAC Institute of Governance and Development (BIGD); Former Director, Human Development Report Office and Poverty Division, United Nations Development Programme, New York, USA.
jahan.selim@gmail.com