These two questions are inextricably connected. To determine whether political regimes
affect economic performance, we must first ask how political regimes emerge and endure.
Unless this question is posed first, we will be unable to distinguish the effect of the
conditions under which political regimes find themselves from the effect of regimes.
Suppose that you were to observe that in 1985 per capita income of Mali, dictatorship,
grew at the rate of 5.35 percent. Would the rate of growth of Mali in 1985 been different
had it been a democracy? This is what we want to know when we ask about the impact of
political regimes on growth. But we do not observe 1985-Mali as a democracy, only as a
dictatorship. True, we could look for a case that was like 1985-Mali in every aspect other
than its political regime. But what are we to do if we cannot find a democracy like Mali-in-
1985? As you probably already know, and will soon learn again, democracies are very rare
in poor countries, such as Mali, which in 1985 had a per capita income of $532. 1 In turn, we
may observe that 1985 France, which was a democracy and had per capita income of
$12,206, grew at the rate of 1.43 percent. Was its growth slow because it was a democracy?
Again, we may try to find a dictatorship that would look in all respects like France. But the
wealthiest dictatorship we observed between 1951 and 1990, Singapore, had per capita
income of $11,698. Hence, we will not find a single case of a dictatorship as wealthy as
France during the same time span.