One of the oft quoted benefits of globalization is that it helps democracy.  The argument goes like this.  Globalization promotes economic development and poverty reduction, and the rise of a middle class.  Once the middle class reaches a critical mass, it demands a say in political decision making.  Thus, the political process opens up, and becomes democratic.  Those who support this argument could cite the cases of Korea and Taiwan.  But, they could not cite the case of Singapore.

In recent years, that is until today's global financial crisis, globalization and economic development had continued apace.  What about democracy?  To get an insight, it is worth looking at the Economist Intelligence Unit's Index of Democracy 2008, which updates its first edition from 2006.  According to the EIU, following a decades long global trend toward democratisation, its spread has come to a halt.  Although things are not moving backward, they are likewise not moving forward.

The EIU's democracy index is more sophisticated than many others.  For one, it is not just based on democratic elections.  The index is based on five categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture.  Thus, a country like the US, which is promoting democratic elections around the world, finds itself ranked at only 18th out of the 165 independent states and territories included in this exercise.  It scores relatively low on political participation and the functioning of government.

Further, countries are classified in one of four categories: full democracies; flawed democracies; hybrid regimes; and authoritarian regimes.  So, while almost half of the world's countries are classified as democracies (representing half the world's population), only 30 are judged to be full democracies (accounting for only 14% of the world's population).

Sweden comes top with a near perfect score, followed by the other Nordic countries and the Netherlands.  Only two Asian countries, Japan and Korea, figures among the full democracies.  The 50 flawed democracies include countries like Chile, Estonia, Israel, Hungary, Slovakia, Poland and Mexico.  Over one-third of the world's population lives under authoritarian rule -- mostly in the Middle East and Africa.

You don't have to be rich to be democratic.  A number of emerging economies make the cut as full democracies, namely, Malta, Uruguay, Mauritius, Costa Rica, Korea and Slovenia.  And some rich countries (mainly, but not only oil producers) have either hybrid regimes (as in Singapore, Hong Kong or Russia) or authoritarian regimes (like Kuwait, Bahrain, Qatar, UAE or Saudi Arabia).

The fact that we have half of the world's population living under democratic regimes is thanks to the "third wave" of democracy which began in 1974, and accelerated in the 1990s as the former communist countries began adopting democratic systems.

But, in the last few years, we have witnessed a slowdown in democratisation.  Between 2006 and 2008, 68 countries saw a deterioration in their democracy scores, while 56 saw an improvement.  The average score for the 167 countries improved slightly from 5.52 to 5.55.  Eastern Europe was the only part of the world that saw a perceptible change, with 19 out of 28 countries recording a decline in their democracy scores.  Perhaps there was some backsliding after the tremendous successful efforts to join the EU.

But, more fundamentally, why has the onward march of democracy lost its momentum.  Some slowdown was perhaps natural after the fall of the Berlin Wall.  Further, the democracy promotion agenda has fallen into disrepute after the very unpopular activities by the US these past eight years.

Another factor holding back the advance of democracy may have been the price of oil, or what Thomas Friedman calls "The First Law of Petropolitics".  This means that the higher the average global crude oil price rises, the more free speech, free press, free and fair elections, an independent judiciary, the rule of law, and independent political parties are eroded.  This law applies to what he calls "petrolist states" -- states which are dependent on oil production for the bulk of their exports or GDP, and have weak institutions or outright authoritarian governments (like Angola, Iran, Nigeria, Russia, Saudi Arabia, Sudan and Venezuela).

This law of petropolitics occurs as patronage spending dampens pressures for democracy, and petrodollars are used to prevent political opposition forming and on forces of repression (like police, internal security and intelligence).  These trends are reinforced by the fact that the higher the oil price goes, the less petrolist leaders are sensitive to what the world thinks or says about them.

So, the current low price of oil may offer some hopes for democracy.  But looking ahead, the US government needs to tame oil consumption, not only for energy security and climate change reasons, but also for promoting democracy in the developing world.

Globalization has shown its ugly side in the form of the current financial crisis.  What could this mean for the development of democracy?  Economic recession could boost social unrest, anti-migrant sentiment and extremist political forces in some countries.  Political reactions could threaten civil liberties.  Wall Street has provoked massive anger on Main Street, and not only in the US.

The adverse social consequences of economic recession could also undermine fragile democracies in the developing world.  The broken financial system is discrediting Western values in general -- with the result that the financial crisis may enhance the attractiveness of the "Beijing Consensus" over the Washington Conensus.  In sum, we will be paying for the follies of financial globalization for some time to come

References:

The Economist Intelligence Unit's Index of Democracy 2008 -- www.eiu.com

The First Law of Petropolitics by Thomas L. Friedman, Foreign Policy, May/June 2006 -- www.foreignpolicy.com