Monday, January 17, 2011

The Message of Tunisia

Tunisia is in the news. Riots. Dictator fled. More riots.

What’s (naively) odd about this is that Tunisia is the most economically advanced Arab country … at least in terms of top-to-bottom quality of life indicators.

A more nuanced viewpoint is that democracy is something that the growth literature has found to be (statistically) unimportant.

The convention is that no one cares about politics and democracy until the per capita income gets about around $8K. Here’s Dani Rodrik on Tunisia.

BTW: Tunisia’s per capita GDP is about $9K.

The notion of that $8K cutoff comes from countries like Taiwan and South Korea, which were repressed but growing for decades, but hit a point where people cared more about government … once they had enough to eat and so on.

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