Read the case/source given and answer the questions that follow by choosing the correct option.

If democracies are expected to produce good governments, then is it not fair to expect that they would also produce development? Evidence shows that in practice many democracies did not fulfil this expectation. If you consider all democracies and all dictatorships for the fifty years between 1950 and 2000, dictatorships have a slightly higher rate of economic growth. The inability of democracy to

achieve higher economic development worries us. But this alone cannot be the reason to reject democracy. As you have already studied economics, economic development depends on several factors: a country’s population size, global situation, cooperation from other countries, economic priorities adopted by the country, etc. However, the difference in the rates of economic development between less developed countries with dictatorships and democracies is negligible. Overall, we cannot say that democracy is a guarantee of economic development. But we can expect democracy not to lag behind dictatorships in this respect. When we find such a significant difference in the rates of economic growth between countries under dictatorship and democracy, it is better to prefer democracy as it has several other positive outcomes.

Why should the benefits of economic growth be distributed equitably?

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An Intiative by Sri Chaitanya

To make an economically even society

To promote the idea of social justice

To reduce inequality in the society

All of the above

answer is D.

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Detailed Solution

The benefits of economic growth are distributed equitably to make an economically even society, promote the idea of social justice and reduce inequality in the society.
The gains of economic advancement should be distributed equally among citizens to achieve an economically equal society. It would also be consistent with one of the foundational foundations of democracy, namely, economic justice. Inclusive growth has been defined as economic growth that is distributed evenly across society and creates opportunities for everybody. Rising inequality transfers money from low-saving households at the bottom and middle of the income distribution to higher-saving households at the top. When all other parameters are held constant, redistribution from low-saving families to high-saving households reduces consumer spending, slowing demand growth. Equitable income distribution promotes social harmony and cohesion.

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