Foreword.

What is the relationship between economic and political development--or to use the dominant ideology of our times, between economic liberalization and democracy? These tenets are a large part of the current conception of good governance, and it is a common assumption that the two are related. For some, the connection is causal, though the debate continues over which one should come first. For others, the two must go hand in hand, suggesting that they may be complements: democracy makes it easier to have a market economy, say some; others argue the converse. The theoretical connection between them takes multiple forms, perhaps as many as there are people who think about the problem, but the idea that these two facets of governance are linked drives much of the policy of donors, international agencies, community groups, non-governmental organizations, and most important, governments. Democracy, or at least the trappings of it, is often considered a precondition for trade and aid, though there are glaring exceptions. In Iraq, the United States is gambling that the establishment of a democracy will lead to improvements in other arenas. International human rights norms, on which many NGOs base their efforts, are grounded in notions of political and legal representation alongside equitable prosperity. But how have these ideas played out? What has happened when states implement reforms?

The experience of some states suggests that the link between democracy and economic development may not be one of cause or condition so much as one of balance. Faced with financial hardship and populations grumbling about their lack of representation, East Asian governments have ceded some political power to their people to ease the pain of economic reforms. The experience of other states, however, suggests that there may not be a link at all. Iran's relative political loosening has not been accompanied by redistribution of wealth; Mozambique has seen economic growth without equity or meaningful political participation. For Turkey, political and economic conditions acted more as barriers to reform, a situation exacerbated by the demands of international actors. Hemmed in on every side, the government could do little to prevent crisis, and has had trouble recovering from it.

Many governments share the experience of political and economic factors acting as insurmountable constraints to progress. Those constraints can set the stage for instability, causing the slow...