China's growth contradicts the links between democracy and growth Essay

China's growth contradicts the links between democracy and growth. Discuss - Essay Example Alongside democracy, capital and labor are some of the critical factors considered to have a significant effect on economic growth in the long run. There have been misconceptions that China’s economic growth is linked to the fact that China is a one-party state that upholds the authoritarian form of government. These mistaken views have influenced other countries to believe that authoritarian rule contributes hugely to economic growth, although China’s growth is tied to liberalization of political and economic reforms, which have led to reduced authoritarianism. China’s growth contradicts the links between democracy and growth China’s growth contradiction with democracy has brought about complication in the fact that the world’s richest countries attribute their success and growth to existence of democracy in their systems. The belief that economic development are linked to democracy is getting weaker as authoritarian regimes like China are proving that they have the capability of achieving economic growth without putting any efforts on political democracies. However, it remains a fact that high per capita income in democratic states has a significant effect in achieving stable and increasing economic growth. Over the last twenty-five years, China's has maintained tremendous economic growth with rigid political aspects that have remained closely tied to authoritarian form of governance. This stagnation in political reforms has negated the concept of economic growth, resulting in educated citizens who later pressure the most authoritarian governments to allow for democracies in which they themselves can exercise control over political situations for the benefit of the entire country. Claims that democracy does not contribute to economic development arise with respect to government’s function of representing the common needs of all the citizens. Different requirements, views, and opinions of different citizens necessitate the government to function independently and represent the collective views of all citizens other than needs of a few individuals. Democracy existence is said to be a hindrance to the independence a government in fostering economic growth and effective citizen representation. The government is given the responsibility of collecting taxes and putting the revenue into productive use with respect to aggregate preferences of citizens. Therefore, democracies may become obstacles for government’s rational functionality; however, multiparty systems in voting in governments may represent rational preferences that meet a variety of conditions to a limited proportion. Moreover, democracy may reflect a system of governance that meets requirements of citizens but does not foster aggregate preferences such as economic prosperity. However, autonomy of the government in countries like China only infringes on political freedom and not economic freedom. Lack of political freedom is depicted by the single party governance where the government places independent emphasis on liberalization of foreign and private investment. Usually, authoritarian governments that have liberalized their economies are statistically proved to economically

Labor Productivity and Wage Rate in Different Countries Essay

Labor Productivity and Wage Rate in Different Countries - Essay Example Relative wage in a certain country is evaluated through comparison with the wage in another country. Furthermore, the differences in countries’ labor productivity levels are a crucial determinant of their relative wage differences. In this case, there is a ratio derived from the relative wages based on labor productivity levels in different countries. On the other hand, decreased productivity in a given country leads to a subsequent decrease in wages. For instance, the wage rates in various countries relative to America are the same as their productivity relative America. Moreover, according to Nir (7), there is a positive relationship between the real wage and labor productivity, which is explained through the economic theory. Therefore, holding other factors constant, workers’ output leads to increased compensation, which is increased wage rate. Workers in different countries around the world have been experiencing difficulties for the past decade. In fact, a global wage report from the International Labor Organizations indicated that growth of productivity exceeded the growth of real wage in numerous economies around the world for the period 1999 to 2007 (Economist.com, 1). For instance, the inflation reduced the purchasing power of worker with dormant wages in countries such as U.S and Japan. In this case, this left workers with significant problems despite the average growth of two percent in labor productivity during that period. In a country like Germany, the recession experienced during the year 2008 caused a decrease in the level of real wages, though there was an increase in the level of productivity (Economist.com, 1). There has been a more rapid increase in the level of labor productivity in various European countries compared to the rates of wages.