Can Development Be Democratic?
Photo courtesy of PBS
The relationship between democracy and development is one of the most important debates in political economy. It is not simply a question of economic policy but of what kind of society a country can build under different political systems. For decades many policymakers in the Global South accepted a common belief that authoritarian rule is necessary for rapid economic transformation. According to this view, a country must first centralise power, control political opposition and discipline society before it can achieve development.
This argument gained strength from the examples of the East Asian Four Tigers – South Korea, Taiwan, Singapore and Hong Kong. These countries achieved impressive industrial growth, rising incomes and strong state capacity within a short period. Japan’s post-war transformation also helped shape the idea of the developmental state where an interventionist government actively directs markets, supports industries and plans long term growth. These examples created the belief that democracy may slow progress while authoritarianism can accelerate it.
In Sri Lanka and many other developing countries, this idea continues to attract support. The promise is simple: reduce political noise, empower technocrats and allow the state to modernise the economy without the delays of democratic contestation. Yet this belief deserves closer scrutiny. As the world witnesses democratic decline even in long established democracies such as the US, the assumption that authoritarianism is an efficient shortcut to development must be questioned. Supporters of the authoritarian model argue that development requires discipline, stability and long term planning. Democracies, by contrast, are often seen as slow, fragmented and driven by short electoral cycles. Governments must negotiate with opposition parties, answer to civil society and face public criticism. These processes may strengthen accountability but they can also delay reforms.
A developmental state usually places economic transformation at the centre of national policy. It directs investment, nurtures local industries, manages trade strategy and coordinates between the state and private sector. Historically, many of these states were associated with restricted democracies or authoritarian systems. Strong bureaucracies, insulated from public pressure, were expected to make rational decisions in the national interest. This creates an apparent tension. Democracy values participation, elections, the rule of law, freedom of expression and accountability. Developmental states often prioritise speed, planning and state authority. If leaders believe growth is the highest priority, democratic institutions can be weakened in the name of national progress.
This has led some scholars to argue that democracy and developmentalism are fundamentally incompatible. Unelected bureaucratic elites rarely surrender power voluntarily once they gain control. In such systems, elections may exist but institutions remain too weak to challenge the ruling order. What emerges is often not genuine democracy but a semi-authoritarian system that keeps democratic appearances while concentrating power at the top.
This debate is no longer limited to the Global South. In recent years, even countries that once presented themselves as models of liberal democracy have shown signs of democratic erosion. Polarised politics, attacks on electoral legitimacy, centralisation of executive power and populist hostility toward institutions have all become more visible. This matters for countries like Sri Lanka. When major Western democracies themselves appear unstable, local elites can argue that democracy is overrated or unnecessary. They may claim that if wealthy democracies struggle with dysfunction, then developing nations should instead prioritise order and growth. That is a dangerous conclusion. Democratic backsliding in advanced economies does not prove that authoritarianism is effective. Rather, it shows that democracy is fragile and requires constant protection. If established democracies can weaken, newer democracies face even greater risks when power becomes concentrated in the hands of a few.
The idea of a democratic developmental state offers a stronger alternative. This model rejects the false choice between growth and democracy. It argues that effective development and democratic governance are not enemies but mutually reinforcing goals.
Economic growth without accountability often benefits narrow elites. Wealth may increase but inequality deepens, institutions become politicised and corruption spreads behind the language of national progress. On the other hand, democracy without developmental performance can become unstable. Citizens lose faith in institutions when governments fail to deliver jobs, services or rising living standards.
The challenge, then, is to combine developmental ambition with democratic legitimacy. Strong institutions, professional bureaucracies, long term planning and industrial policy can exist within democratic systems. Elections, public debate, independent courts and free media need not be obstacles to growth. They can instead help correct mistakes, expose abuse and ensure that development benefits the wider population rather than a privileged few. The strongest evidence against the authoritarian myth comes from countries that achieved development while preserving democratic institutions. Botswana is an example. At independence in 1966, it was one of the world’s poorest countries. Yet through capable state institutions, prudent economic management and investment in education and human development, Botswana transformed itself into an upper middle income country while maintaining democratic stability. Mauritius offers another important case. Unlike many post-colonial states facing structural challenges, Mauritius built an interventionist state that supported long term growth while also consolidating democracy. It did not choose between freedom and prosperity; it pursued both together. These cases show that authoritarianism is not the only route to development. A capable state can be democratic. Political competition and economic transformation can coexist.
Sri Lanka has long faced the tension between centralised state-led development and democratic participation. Across different periods, governments have promised rapid modernisation through strong leadership. Yet growth strategies that sideline accountability often generate distrust, resistance and instability. Sri Lanka’s future depends not only on infrastructure or GDP growth but on institutional credibility. Citizens need confidence that development is transparent, fairly distributed and designed for the public good rather than elite interests.
Recent events highlight this reality with clarity. In 2026, a major internal fraud at a leading private bank exposed serious gaps in oversight and regulatory control, raising concerns about how financial institutions are monitored and governed. Around the same period, a cyber-related financial loss linked to an international transaction involving the Central Bank revealed vulnerabilities in digital financial systems and state safeguards.
These are not isolated incidents. They point to a deeper structural issue. When institutions lack transparency, accountability and strong governance mechanisms, financial systems become vulnerable to misuse, manipulation and loss. Even as Sri Lanka pushes for economic recovery and investment, such weaknesses can undermine confidence, both domestically and internationally. These cases reinforce a central lesson of this argument. Development cannot be reduced to growth targets or investment flows. Without strong institutions, regulatory oversight and public accountability, economic progress becomes fragile. In such contexts, the benefits of development are often captured by a few while risks are borne by the broader population.
Sri Lanka, therefore, does not simply need growth; it needs a democratic developmental state in which state capacity is matched by transparency, the rule of law and public trust. The real challenge is to build what scholars describe as a virtuous circle between socioeconomic progress and political development. Growth strengthens democracy when it expands opportunity, reduces poverty and empowers citizens. Democracy strengthens growth by improving governance, limiting abuse and creating legitimacy for reform. Neither can succeed fully without the other. A government that delivers growth while suppressing accountability may appear strong but its success is often unstable. This is why the debate must move beyond simplistic binaries. The question is not whether a country should choose democracy or development but how institutions can be designed to achieve both simultaneously.
For Sri Lanka, the temptation of centralised power may appear attractive in times of crisis. Yet recent financial irregularities and institutional vulnerabilities show that development without accountability carries significant risks. Growth alone cannot guarantee stability or fairness. The sustainable path forward lies in building a democratic developmental state, one that combines strong state capacity with transparency, accountability and inclusive governance. Development, in its true sense, is not only about economic expansion but also about equality, justice and trust in institutions. Only when these elements come together can a country achieve development that is not only rapid but also resilient and fair.
