Institutional Performance of Democracy and Authoritarianism: Evidence from the Panel Dataof the Four Asian Tigers





Published date: 

June, 2007


Thung-Hon Lin


There are two competing approaches, namely, the “Asian exceptionalism” and “Universalism,” in regard to the political economy of the Asian tigers. The former argues that authoritarianism based on the “Asian values” has performed better than the democratic regimes in terms of influencing the course of economic development and income distribution. By contrast, following the democratization of Korea and Taiwan, the universalism approach claims that the Asian experience is not exceptional at all. In this article, I apply the counterfactual treatment regression and the generalized method of moments (GMM) to estimate the effects of political transition using pooled panel data for four Asian tigers over the period 1975-2005. The statistical results indicate that, compared with the authoritarianism that characterizes Singapore and Hong Kong, the democratization of Taiwan and Korea did not reduce the real GDP growth rate. Moreover, the Gini coefficients for Taiwan and Korea were seen to exhibit a moderate declining because of democratization, while the Gini coefficients for Singapore and Hong Kong soared sharply. Therefore, in terms of growth and equality, the institutional performance of democracy is shown to be better than the institutional performance of authoritarianism in Asia. The evidence thus supports the arguments favoring universalism, which is related to the political philosophy that regards democracy as a “universal value.”