Government

In many areas, government plays a central role in organizing dispersed interests: meeting national goals and balancing competing interests. Unlike social norms and values, government operates a rulemaking process by which rules can be changed more quickly, with vision and design, and still be forceful. But if a government-with its socially sanctioned coercive powers-finds itself unbound by rules (e.g., by a constitution or equivalent with the separation of powers it brings), how can it commit itself as a partner? The private sector will be less willing to invest and do business if instability and risks of expropriatory consequence have not been curtailed. Unless institutions succeed in separating the powers of government and providing meaningful checks and balances, communities and the private sector will be less forward looking, and environmental and natural assets will be hurt through inappropriate investment and conservation.

Democratic forms of decisionmaking, despite their limitations, are associated with processes that exhibit desirable institutional features; they pick up signals, balance interests, and execute chosen actions. A growing body of literature finds that indicators of voice and accountability are closely associated with better development outcomes, including higher national income per capita, lower infant mortality rates, and lower illiteracy rates (chapter 7, and WDR 2002). Empirical evidence strongly supports Amartya Sen's finding that democracy-helped by free speech-plays a key role in eliminating famine and eliciting effective disaster relief.⁶ Theoretical and empirical evidence also suggests that environmental commitment and related outcomes are positively correlated with democratic practices, though some countries have also done well environmentally using other channels.