The trajectory of Egypt's economy

Is there a link between democracy and economic development?

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Khalil Hamra / AP
Protesters gather in Cairo on Feb. 1. Do young people in Egypt see a future for their country and economy?

Zachary Karabell in the Wall Street Journal:

What allows China to thrive for now (and Brazil and India and Indonesia, among many others) is that its citizens believe they have some control over their material lives and a chance to turn their dreams into reality. They have an outlet for their passions that is not determined for them, and an increasing degree of economic freedom. The young in Egypt ... believe that they have no future, and in many ways they are correct.

Yes. Karabell qualifies this: "These realities alone don't cause revolution. Many countries are poor and quiet." And we can definitely argue over the link between democracy and economic development. Karabell cites "economic freedom," but the countries he names--China (135th), Brazil (113th), India (124th), and Indonesia (116th)--aren't exactly outstanding performers on the Index of Economic Freedom (out of 179 ranked countries). We could easily flip Karabell's argument around--the economic outlet for the people's energy in China could eventually prove astoundingly insufficient. (Tunisia, ranked 100th in the Index, has a higher per capita income than each of these countries save Brazil.)

But Karabell points to something broader than simply a mechanical link between political freedom and a given level of income: the direction of change, or the economic trajectory. This seems to matter more than the existing state of affair. Hence the reason we have highlighted the importance of entrepreneurship in nations such as Pakistan: it not only offers a route to economic growth but also helps to satisfy the human dignity dimension of economic activity.

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