J-Curve Economics

A theoretical argument for development, not democracy, in Iraq.

Political scientist Ian Bremmer's latest book, The J Curve, has stirred up a welcome discussion. It applies the statistical "J-Curve" concept to how "nations rise and fall."

When combined with Seymour Martin Lipset's research linking economic development to democracy, the argument has tremendous lessons for democratization.

Bremmer plots the J-Curve on a graph where the Y-axis represents a country's stability and the X-axis its openness. The left side of the curve is steeper than the right, creating a kind of elongated J or "Nike swoosh" shape.

He contends that closed societies are stable because they're closed-if North Korea began reform, it would fall toward the middle of the curve and lose stability. A free press, for example, would stoke anti-regime sentiments.

By contrast, open societies are stable because they're open. If Canada clamped down on civil liberties, it too would move toward the unstable middle of the curve, but from the right instead of the left.

Most important here, Bremmer says economic fortunes (or other phenomena, like natural disasters) can move the entire curve up or down. If North Korea struck oil it could gain stability without adjusting its openness.

This observation squares well with economic research. Beginning nearly 50 years ago, Seymour Martin Lipset and others found a strong statistical correlation between development and democracy. The correlation holds today: By the CIA's list of countries by GDP per capita, the richest countries are largely democracies.

There are, it should be noted, a few oil-saturated exceptions-United Arab Emirates ranks fourth, for example. But by and large, richer means freer. It's arguable that by moving the whole J-Curve upward, development makes democratization possible.

Imagine a slight adjustment to Bremmer's J-Curve: Define zero stability (along the X-axis) as a failed state. Bear in mind that economic problems can move the curve down, even to the point where it touches or dips below the X-axis.

This would imply that, if a closed country's fiscal situation is bad enough, democratization is actually impossible. Adding openness will push stability past the breaking point, off the graph-this is completely consistent with Lipset's correlation (and the CIA's chart) showing that at very low income levels democracy is virtually nonexistent.

Anomalies will exist, but remember non-economic factors can raise and lower the curve as well.

The most important question then becomes "how high is the J Curve for a given country?" rather than "where on the J-Curve is that country?" If the economy is working well enough, a move through the depths of the curve won't plunge a state into complete turmoil. Those depths are far enough from the X-axis.

Bremmer himself analyzes the various reasons some countries make it from the left to the right side of the curve while others crash and burn. He doesn't relate his explanations to his original concept, however. He doesn't explicitly consider that the height of the curve itself could determine whether traveling along that curve has positive or negative long-term results.

Bremmer's reasons for successful transition-national identity, backing from the international community, non-militarism-could easily been seen simply as factors that shift the whole J-Curve. They are not exceptions or curiosities.

According to Bremmer, "a state may fall into the depths of the J-Curve and fail to reemerge on either side." With this re-conceptualization, that becomes quite literal.

Because so many of these variables can affect the curve's position, it's virtually impossible to calculate how high a country's curve is. But per-capita GDP is perhaps the best readily available measure, both as a factor in itself and as a proxy for others. Factors like national identity are difficult to quantify objectively.

The most talked-about country in this context is Iraq, of course. According to the CIA World Factbook, Iraq ranked 189th in per-capita GDP last year at $1,800. It came in nine slots below Sudan ($2,100), four above Haiti ($1,700) and five above North Korea (also $1,700).

Lipset's research in and of itself suggests occupying powers should focus on economics first, democracy second. But combined with the J-Curve, the logical conclusion is that democratization attempts can actually do more harm than good, even in the long run. If the curve is low enough, these efforts could push Iraq clean off it.

The daily news bears this out as the words "civil war" become more and more common. And failed states are hard to fix.

These issues are complicated enough that this observation is no panacea. Bremmer himself notes in The J Curve that economic structural changes, as opposed to actual economic improvements, are destabilizing in themselves. The argument here is merely that gradual economic development, and not so much rapid democratization, should be a major goal in poor, closed countries.

Robert VerBruggen is an apprentice editor at The National Interest. His e-mail is [email protected].