China Democratic Transitions East Asia Europe & Eurasia Freedom and Prosperity Political Reform Politics & Diplomacy Russia

Report

January 11, 2024

False promises: The authoritarian development models of China and Russia

By Joseph Lemoine, Dan Negrea, Patrick Quirk, and Lauren Van Metre

Are authoritarian regimes more successful than free countries in offering prosperity to their people? The answer is decidedly no, yet China and Russia actively advertise the “benefits” and “promise” of their authoritarian development model. Beijing and Moscow contend that their governance model—rooted in central control of political, social, and economic life—delivers for their people. The facts prove exactly the opposite and show that countries characterized by repression and concentrated control are far less successful across all metrics of human development than are free societies.

That free societies are better for the people residing in them is not an ideological position; it is a statement of fact backed by substantial evidence, including, but not limited to, the Atlantic Council’s Freedom and Prosperity Indexes.

This paper aims to showcase why and how the authoritarian development model is inferior to that of free societies. The first section documents democratic backsliding and the reversal of freedom’s fortunes. The second section presents data on how authoritarian regimes have failed to deliver prosperity for their people. The third section outlines how free societies have done the opposite—delivered sustained prosperity for their citizens. The final section offers the conclusion that authoritarian regimes, despite their claims, cannot deliver democratic progress or prosperity for society at large.

I. The end and return of history: Freedom’s emergence and decline

Over the past seventeen years , authoritarianism has been on the march. Autocratic regimes across the globe, including, but not limited to, China, Russia, and Iran have supercharged repression with the aim of consolidating control to benefit a small set of predatory elites. Other previously liberal democracies have also experienced backsliding, as neo-populist leaders hollow out institutions and tamp down dissent. Today, just 14 percent of the world’s population lives in free societies. This is in sharp contrast to the heady days immediately following the Cold War, where autocracy was largely defeated—or on the back foot—and liberal democracy on the ascent.

Various factors contributed to this reversal of freedom’s fortunes. China and Russia stepped up efforts to export authoritarianism—and undermine democracy—to make a world safe for autocracy and, therefore, their regimes. Citizens the world over increasingly doubted whether democracy can deliver for them and turned to populist leaders offering (often unsustainable) quick economic wins at the expense of political freedoms.

But all is not bleak. People power movements across the world are demanding accountability from their governments. From Poland to Ecuador, centrist political forces have dislodged populists and authoritarians through free and open political competition. Yet China and Russia continue making inroads with governments of developing nations who are deciding which path to pursue: the one rooted in centralized control or the one grounded in freedom. Across the developing world generally and sub-Saharan Africa in particular, the Chinese Communist Party (CCP) actively exports and advocates its model of centralized state-led economic growth governed by authoritarian rule. Leaders of countries that China (and Russia) are actively engaging would benefit from examining the implications for prosperity—and their own political prospects—of heeding the CCP’s siren song.

This paper aims to undercut the argument that China, Russia, and some authoritarian populist firebrands make that prosperity requires sacrifices in freedom and turns this argument on its head by showing that the inverse is true: the surest path to citizens’ prosperity is through a political system that fosters and privileges political, economic, and legal freedoms.

II. The false promise that dictatorship delivers

Are authoritarian regimes more successful than free countries in offering prosperity to their people? The answer is undoubtedly no.

Authoritarian regimes oversee systems that benefit a powerful core of predatory elites and their clients. Autocratic systems might produce some initial economic successes, as seen in China in the 1980s and 1990s, but these advances are often short-lived, quickly give way to stagnation, and are never accompanied by broader social progress or political freedom.

From Venezuela to Russia, people residing in closed or closing societies characterized by already absent or receding freedoms enjoy far less prosperity than their counterparts in free countries. Comparing the prosperity of China and Russia to other countries in their respective regions—traced from the end of the Cold War to the present day—illustrates how freedom delivers prosperity and dictatorship does not.

For this paper we are using the concept of prosperity employed by the Atlantic Council’s Freedom and Prosperity Indexes. The Prosperity Index goes beyond the measurement of pure material well-being and includes additional social aspects that are necessary for a prosperous society. The Prosperity Index is formed by six components: income, health, education, environment, minority rights, and inequality.

China

Witness the markedly divergent paths taken by China, Taiwan, and South Korea starting in 1987, the year Taipei lifted martial law and South Korea held a transformational presidential election that marked the end of authoritarian rule. For Seoul and Taiwan, 1987 can be viewed as the starting point of democracy. Until this juncture, all three countries—China, South Korea, and Taiwan—were dictatorships overseeing largely low-income economies. China was a communist dictatorship without political or economic freedom. South Korea and Taiwan embraced capitalist economic policies but were military dictatorships; citizens enjoyed some economic freedoms but no political freedoms.

Since 1949, China has experienced overall economic growth despite very low freedom scores. During the Mao Tse-tung era (1949–78), Beijing was a centrally planned economy without private property and largely closed to the world. During this period, China had 6 percent annual growth, albeit from a very low base.

During the era of “Reform and Opening Up” begun by Deng Xiaoping in 1978, China enacted reforms that opened the country to the outside world, including allowing private business and foreign investment. China retained its centrally planned structure and authoritarian governance under the dictatorship of the CCP. During this period, the country experienced 10 percent growth annually. After the massacre of protesters in Beijing’s Tiananmen Square in 1989, the CCP walked back much of the Deng-era liberalizations, returning to a predominantly state-driven economy.

When Chinese President Xi Jinping assumed office in 2013, the limitations of state control became even more apparent, as well as the CCP’s ability to enact needed reforms given Xi’s personal and ideological beliefs. Over the last decade, China has experienced 5 percent growth annually. Despite the continuing growth over several decades, Beijing has delivered only limited prosperity for its people because it has not closed the gap between the wealthiest and its lower- and middle-income citizens—the authoritarian system has worked exactly as intended, delivering huge wealth for a small set of predatory elites while failing to generate prosperity for society at large.

By contrast, during the same period, from the 1980s to present day, South Korea and Taiwan enjoyed enhanced freedoms because of, among other factors, the hard work by reformers, civil society, and the assistance of allies regionally and globally. Taiwan and South Korea escaped the middle-income trap in the 1990s (while China has not) and their economies—and people—have thrived since.

Free countries across all measures do better than authoritarian regimes in delivering prosperity for their people. Comparisons present this quite stark difference. As we see in the chart below comparing economic growth as measured by Gross National Income (GNI) per capita from 1962 to 2022, South Korea outperforms Beijing by several fold.

Figure 1. GNI per capita of South Korea, Taiwan, and China (1962–2022)

China remains well below South Korea, Taiwan, and other free societies in measurements of prosperity that go beyond gross domestic product (GDP). The Atlantic Council’s Prosperity Index conceptualized the term prosperity as a combination of access to education, income, health outcomes, inequality, environment, and respect for minority rights. This broader definition of prosperity captures the full breadth of quality of life experienced by people in each country.

According to the Prosperity Index, China is characterized as “mostly unprosperous,” ranked 119th, whereas South Korea and Taiwan are characterized as “prosperous” and rank thirteenth and twenty-sixth, respectively. China’s prosperity score, as noted in the analysis above of reforms since the 1940s, increased through the mid-2000s but has recently plateaued.

Figure 2. Prosperity scores of South Korea, Taiwan, and China relative to ‘free’ countries (1995–2022)

Differences in freedom scores explain this divergence in fortune. In the case of China, freedom scores stagnated—at an already low level—through the 2000s and decreased further under Xi. Economic decisions are made according to Xi’s ideological beliefs. Economists across the spectrum agree that a stronger social safety net in China would help boost consumer spending, helping the economy transition away from its bloated model of state-dominated investment. Unfortunately, would-be reformers must contend with Xi’s stated belief that handouts make people lazy. The country’s social safety net is also suffering from Xi’s drive to harden China’s economy and boost military spending with an eye on Taiwan. Lessening the burden on China’s women—who are often expected to hold down jobs while shouldering the entire burden of domestic care—would also boost the economy, but the longer Xi has stayed in office, the more regressive his views on women’s autonomy have become. Much the same applies to the government’s approach to opportunities for youth, where Xi’s determination to limit the political power of the private sector through harsh regulatory action has limited the sector’s dynamism and reduced opportunities for educated youth to find better-paying, higher-skilled jobs. The causal link between increased freedom and prosperity generally, and in this case specifically, is clear and evidence based. Again, the comparison with South Korea and Taiwan is instructive. Seoul and Taipei are both “free” and ranked thirty-fourth and twenty-seventh, respectively, in the Freedom Index, whereas Beijing, characterized as “mostly unfree,” sits at 144th.

Russia

By the late 1980s, the Soviet Union’s political survival depended on the communist regime’s ability to reform its stagnating economy, which, as the Prosperity Index shows, was undermining its competitiveness with free countries, and its superpower status globally. Communist Party General Secretary Mikhail Gorbachev’s unprecedented reforms targeted a cadre of predatory Communist Party officials whose corruption stood in the way of the USSR’s economic modernization. The anti-corruption campaigns against powerful political bosses controlling the Soviet republics unleashed a wave of popular anti-communist, nationalist movements. The Baltics were the first republics to declare their independence from the USSR in 1991.

Seizing their geopolitical moment, as the Soviet Union collapsed, the Baltic countries—Estonia, Latvia, and Lithuania—undertook a full-scale market restructuring of their communist economies. Strong long-term popular and political support for integration with Europe sustained the Baltics through an initial sharp economic downturn. A path to European Union accession for the Baltics, agreed to in 1995, required economic transformation and democratic reforms that align with the Atlantic Council’s Freedom Index: economic freedom (market reforms), legal (independent judiciary), and political (multiparty system). The index shows the Baltic states’ corresponding increase in prosperity, which improved dramatically in the 1990s and 2000s to the level of other free states.

Figure 3. Prosperity scores of the Baltic states and Russia relative to ‘free’ countries (1995–2022)

Russia stands in stark contrast to the Baltic states. As constituent republics of the Soviet Union, they began in much the same place in terms of both freedom and prosperity. However, Russia’s acute economic downturn in the early 1990s (due to radical economic reforms) and its deformed democracy—the corrupt Boris Yeltsin regime instituted presidential rule by decree, and media and civil society intimidation campaigns—set the stage in 1999 for a transfer of power, orchestrated by Yeltsin and the oligarchs, that brought Vladimir Putin to power. Putin quickly re-centralized power within the executive presidency. Under Putin, Russia has become an authoritarian state that weaponizes the private and public sector and civil society in the service of the regime. The regime’s media shutdowns, criminalization of civil society, intimidation (and assassinations) of the political opposition, and suppression of basic political rights are represented in Russia’s freedom scores, which in 2022 fell precipitously to 42.1 due to internal political repression in Russia as the Putin regime launched a full-scale invasion of Ukraine—less than half of the average score for the Balkans (87.2).

Figure 4. Freedom scores of the Baltic states and Russia relative to ‘free’ countries (1995–2022)

The decline in freedom in Russia has had a noticeable impact on every measure of its Prosperity Index. Putin’s re-centralization of political power has taken away representation from Russia’s ethnic minorities and power from its ethnic autonomous republics and regions. Russia has not successfully diversified its economy away from natural resources, a political decision by the Putin regime which relies on the distribution of rents to maintain political and social stability. While Russia still maintains a strong tertiary education system, the economic return on that education is low due to a stagnating market economy with few jobs requiring advanced degrees. Widespread corruption benefits the oligarchic class creating high levels of income disparity, which is increasing as a result of Russia’s war in Ukraine, after falling steadily since the 2008 financial crisis. The current regime’s stifling of debate and restrictions on data and information, combined with a policy of “economic development at all costs,” has resulted in significant levels and types of environmental damage: air pollution, industrial and radioactive waste, and endangered wildlife and ecosystems.

Yet, rarely has the “less freedom impact” on prosperity been as obvious as on the population of Russia, which The Economist cautions may be entering a “doom loop of demographic decline” due to “war, disease, and exodus.”²Economist, “Russia’s population nightmare is going to get even worse,” March 4, 2023, https://www.economist.com/europe/2023/03/04/russias-population-nightmare-is-going-to-get-even-worse. As the Atlantic Council’s Prosperity Index shows, Russia today is in a worse place, compared to countries in the “free” category, than in 1995 when its implementation of economic “shock therapy” caused the wholesale impoverishment of its citizens.

III. Fact-based promise that freedom delivers

Freedom is the surest path to durable prosperity. Free countries in general have a much higher prosperity score, as we see in the graph below. The characteristics of free societies are what enable prosperity.

Figure 5. Prosperity scores of countries (1995–2022)

Political freedoms mean that a plurality of actors participate in the political system, including citizens through free elections; autonomous social groups and civic organizations, which have political authority; and political representatives who are responsive and accountable to citizens. This power of the public depends on certain conditions such as universal suffrage, access to information alternative to that of the government’s, and freedom of speech and association. Health care, education, and environmental protections are stronger in free states where governments respond to citizens’ interest in a better quality of life for themselves and future generations.

In response to the COVID-19 pandemic, China’s authoritarian, top-down controls—data secrecy, criminalization of criticism, coercive lockdowns, and invasive surveillance—violated human rights, jeopardized marginal communities, and caused severe economic hardship, while also resulting in unnecessary deaths when restrictions were fully lifted. In Russia, political power is so concentrated in the person that Putinism is its own brand of authoritarianism. Russia’s pandemic response laid bare the weakness of a personality-centric political system, which could not function without Putin’s direct management of the response.

Strong legal freedoms mean citizens and the government abide by the rule of law and that transparent processes are in place, which citizens and companies can trust are enforced by institutions or processes. Laws are accessible; they are publicly known, clearly articulated, and reasonable, and applied equally to everyone. Legal freedoms help marginalized groups extend their political freedoms. For example, in free countries, when women have the legal protection to pursue equality, all groups benefit. The Women’s Economic Freedom indicator in the Freedom Index correlates with general advancement in those societies.

In contrast, Hong Kong’s National Security Law, passed in secret by the Communist Party in 2020 , was applied retroactively, resulting in the arrest of pro-democracy activists for protests and demonstrations that were not crimes at the time they took place.³BBC News, “Hong Kong national security law: What is it and is it worrying?” June 28, 2022https://www.bbc.com/news/world-asia-china-52765838#:~:text=The%20details%20of%20the%20law’s,authority%20of%20the%20central%20government. The resulting shrinking of civil society space suppressed Hong Kong’s nascent feminist movement, as pro-democracy figures who advocated for gender rights were arrested, or their organizations disbanded. While the CCP endorses gender equality, the subordination of women to its brand of Chinese nationalism is key to its authoritarian stability: its laws on domestic violence are not fully implemented, gender quotas for women’s political leadership are not met, and the gender pay gap remains. In 2017, Russia decriminalized domestic violence in cases where injuries are not substantial, and the abuse occurs only once a year. The weaponization of the law is a characteristic of authoritarian systems.⁴Kay Rollins, “Putin’s Other War: Domestic Violence, Traditional Values and Masculinity in Modern Russia,” Harvard International Review, August 3, 2022,  https://hir.harvard.edu/putins-other-war/#:~:text=In%202017%2C%20the%20Duma%2C%20Russia’s,no%20punishment%20for%20the%20offender.

Economic freedom indicates that the majority of that country’s economic activity is guided not by centrally planned dictates, like those on offer from the CCP, but the principles of free and competitive markets. Free markets are more efficient in that they generate clear and transparent incentives for citizens on where to seek employment and channel investments. The basic foundation of a market economy is property rights that are clearly spelled out and protected.

Meanwhile, China’s crackdown on its technology industry beginning in 2020 was politically motivated, part of a larger government effort to curb private enterprise which had become too powerful for the CCP.⁵Economist, “China’s Tech Crackdown Starts to Ease: Firms can breathe more easily,” January 19, 2023, https://www.economist.com/business/2023/01/19/chinas-tech-crackdown-starts-to-ease?ppccampaignID=17210591673&ppcadID=&gad_source=1&gclsrc=ds. The loss in value by tech companies is contributing to a greater economic slowdown that is hurting Chinese citizens. In Russia, before the war in Ukraine, significant levels of capital flight by oligarchs had decreased the overall well-being of Russian citizens.⁶William H. Cooper and John P. Hardt, Russia Capital Flight, Economic Reforms, and US Interests:  An Analysis, Congressional Research Service Report for Congress, updated March 10, 2000,  https://sgp.fas.org/crs/row/RL30394.pdf. Why did the regime not crack down on capital flight? If wealthy oligarchs invested in Russia, they might have demanded political and economic reforms. The management of elite power in authoritarian regimes greatly distorts economic incentives in ways that negatively impact citizens.

IV. Conclusion

Much has been said about the ongoing contest between democracy and autocracy. Countries do not persist as authoritarian enclaves because the people residing within their borders want less freedom. Autocracies persist because the regimes ruling them benefit from centralized control and nearly nonexistent political freedoms. A small cabal of predatory elites thrives in these countries while the majority of their citizens struggle to get by. Autocracy results in prosperity for a select few and misery for most.

Russia and China have been aggressive in promoting the superiority of their political models to those of liberal democracies. The proof, they claim, is in the output; that their systems deliver on economics, national values, stability, and modernization in ways that democracies do not. In fact, China has gone so far as to claim that the CCP under Xi has reinvented and improved on the Western model of democracy as a “whole-process people’s democracy” that is focused on human development and prosperity for all.⁷G.E., “What China means by ‘democracy,’” Economist, November 25, 2014, https://www.economist.com/the-economist-explains/2014/11/25/what-china-means-by-democracy?ppccampaignID=17210591673&ppcadID=&gad_source=1&gclsrc=aw.ds. In China, this singular attention to development is not disrupted by the political processes that Western democracies observe—elections, changes in administration, etc. In Russia, Putin has defined democracy as a strong state that can deliver for its citizens and protect them from foreign influence and interference, referring to his ability to provide stability to citizens after the turbulent 1990s. His political vision is reactionary and not progressive.

The Atlantic Council’s Freedom and Prosperity Indexes demonstrate the inaccuracy of these claims to democratic progress and prosperity by China and Russia. As the indexes show, China has not delivered prosperity to its citizens, its primary claim to a superior governance model. Putin’s assertion that Russia is a better place than it was in the 1990s, especially relative to other former republics of the Soviet Union that have chosen freedom, is likewise false. An inherent weakness of authoritarian regimes is that they cannot even deliver on the mirage of democracy that they promote.

Joseph Lemoine is a director of the Atlantic Council’s Freedom and Prosperity Center.

Dan Negrea is the senior director of the Atlantic Council’s Freedom and Prosperity Center.

Patrick W. Quirk is the vice president for strategy, innovation, and impact at the International Republican Institute and a nonresident senior fellow with both the Atlantic Council’s Freedom and Prosperity Center and Scowcroft Strategy Initiative at the Scowcroft Center for Strategy and Security. 

Lauren van Metre is a senior advisor for peace, climate, and democratic resilience at the National Democratic Institute and a nonresident senior fellow with the Atlantic Council’s Eurasia Center.

Image: Russian President Vladimir Putin (R) and Chinese President Xi Jinping attend a session of the St. Petersburg International Economic Forum (SPIEF), Russia June 7, 2019. REUTERS/Maxim Shemetov