Voice and Growth: Was Churchill Right?

19 October 2002 draft VOICE AND GROWTH: WAS CHURCHILL RIGHT? Peter H. Lindert University of California - Davis ABSTRACT The debate over whether political democracy is the least bad regime, as Churchill once said, remains unresolved because history has been ignored or misread, and because recent statistical studies have not chosen the right tests. Using too little historical information, and mistaking formal democratic rules for true voice, has understated the gains from spreading political voice more equally. This paper draws on a deeper history, reinterpreting five key experiences to show how the institutional channels linking voice and growth are themselves evolving with the economy. Up to about the early nineteenth century, the key institutional link was property rights and contract enforcement. Since the early nineteenth century, the human-investment channel has assumed an ever-greater role. This trend will probably continue. A telltale sign of damage to growth from elite rule is the under-investment of public funds in egalitarian human capital, especially primary schooling, relative to historical norms for successful economies. On the afternoon of November 11th, 1947, the Opposition leader Winston Churchill gave the House of Commons, and posterity, his famous defense of democracy: No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time; but there is the broad feeling in our country that the people should rule, continuously rule, and that public opinion, expressed by all constitutional means, should shape, guide, and control the actions of Ministers who are their servants and not their masters....” 1 In fact, Churchill was trying to block the advance of democracy on that November day. He was defending the power of the House of Lords to block measures advanced by a “Voice and Growth,” Page 1