The Rise of Germany in the Nineteenth and Twentieth Centuries and Sustaining Democracy

Abstract

This article examines the rise of Germany since the 19th century to explain that it is open access in the economic sphere, as well as institutional building related to the protection of property rights, contract enforcement, financial markets, rule of law, and human resource accumulation that determine economic and human development. The case of Germany is not very consistent with the logic of the open access orders of North et al or the theory of extractive political institutions of Acemoglu and Robinson along the line of contestation and inclusiveness. The case of Germany is, however, able to support the research of Przeworski and Limongi that economic development is more likely to sustain democracy. Germany is certainly not the only case in explaining that stable democracy is not the cause but rather the consequence or outcome of lengthy economic development. The historical evidence from South Korea and Taiwan similarly supports the position that democracy is the outcome of economic and social development. This article, however, does not examine whether western values of human equality and human freedom are essential in economic and human development. They are very likely to be so as human equality is the precondition of open access in the economic sphere and human freedom are closely integrated with the interconnected institutions examined in this article. Future research may investigate the roles of these values in different political systems regardless whether a political system is under the rule of one party, by a dominant party, or through the utilization of a multiparty system.