Edge of Chaos

By Dambisa Moyo

Why democracy is failing to deliver economic growth - and how to fix it

1. Economic growth improves living standards, while political instability and short-term policies harm the economy.

   • China

     • Raising low wages
     • Increasing education spending
     • Affordable housing

   • Argentina

     • 1913 - world's tenth-richest country
     • 1930 - 1970s - six military coups
     • hyperinflation
     • Failed to invest in education
     • Unemployment

2. Some types of government debt, limited resources and population growth threaten economic growth.

   • going into debt can be beneficial for national economies

3. Automation and the decline of the global workforce threaten nations' economies

   • Aging population
   • Automation - driverless vehicles

4. Trends towards protectionism negatively affect the global economy

   • UK voted to leave the EU in the Brexit referendum
   • Smoot-Hawley Tariff Act, which enforced an effective tax rate of 60 percent on over 3,200 products imported into the US, other countries retaliated by imposing tariffs on American products, due to which America's GDP plummeted from $104.6 billion in 1929 to only $57.2 billion in 1933.
   • Enforce effective immigration policies to deal with labor shortages like in Canada, Japan and Australia. Established a points-based system (judge on their academic achievements and work experience)

5. China's state-regulated economy has become a model for growth, but state intervention poses long-term economic risks

   • Authoritarian state capitalism - prioritizing collectivism over individual rights and freedoms

6. Economic stability in this climate requires long-term policy decisions, a limit on campaign donations and higher public-sector wages

7. Longer terms of office and real-world experience lead to better politicians, while compulsory voting breeds better policies

   • Australia, singapore and belgium fines people if they do not show up for voting.