The Paradox of Economic Liberalization: Why Autocracies Double Down on Repression
There’s a paradox that’s been nagging at me for years, and it’s this: why do so many autocracies become more repressive when they open up their economies? It’s a question that defies the neat logic of political economists, who’ve long argued that economic liberalization paves the way for democracy. Personally, I think this disconnect is one of the most fascinating—and underappreciated—trends in global politics today.
Let’s start with the numbers. According to the V-Dem Project, 41% of the world’s population now lives under autocratizing regimes. That’s a staggering figure, and it’s only getting worse. What’s particularly striking is that this backslide into authoritarianism is happening despite—or perhaps because of—global economic integration. Take countries like Mexico, Malaysia, and Senegal. They embraced economic liberalization, only to see human rights abuses spike. What gives?
Here’s where things get interesting. The conventional wisdom, championed by figures like Milton Friedman and Friedrich Hayek, was that economic liberalization would weaken autocrats by reducing their control over resources. The idea was simple: if people aren’t dependent on the state for jobs or credit, they’ll have the autonomy to demand political freedoms. But reality, as it often does, has proven far messier.
What many people don’t realize is that economic liberalization isn’t just an economic shift—it’s a political earthquake. For autocratic elites, it’s a threat. Think about it: when you privatize state-owned enterprises or deregulate markets, you’re empowering a new class of business leaders and opposition figures who could challenge the old guard. From the perspective of a dictator, this isn’t just inconvenient—it’s existential.
This raises a deeper question: how do autocrats respond to this threat? The answer, more often than not, is repression. But it’s not just about silencing dissent. It’s about elite management. Dictators need to signal to their ruling coalition that they’re still in control, that they’re protecting the interests of the insiders. Repression becomes a tool to appease the elites, to show them that their power isn’t being diluted.
Take Mexico, for example. When the country liberalized its economy, the ruling party elites felt threatened. So, the government cracked down on opposition groups—not just to silence them, but to reassure the elites that their political influence was safe. This dynamic isn’t unique to Mexico. It’s a pattern we’ve seen in about half of all autocracies that have liberalized their economies.
What this really suggests is that economic liberalization isn’t a one-way street to democracy. It’s a high-stakes game of political survival. Dictators are caught between two pressures: the need to appease their elites and the need to avoid alienating international actors like the United States, who push for economic reforms. Repression becomes their middle ground—a way to stay in power while keeping both sides relatively satisfied.
Now, let’s talk about Cuba and Venezuela. These are two cases where the dynamics of liberalization and repression are playing out in real time. In Cuba, the party and military have gained more autonomy and economic privileges, which means the elites are stronger than ever. If you take a step back and think about it, this sets the stage for increased repression as the regime liberalizes its economy. We’re already seeing signs of this, with crackdowns on dissidents despite U.S. pressure.
Venezuela is a bit more complicated. With Nicolás Maduro’s removal in 2026, there’s an opportunity for regime insiders to assert more independence. If that happens, economic liberalization could backfire, leading to more repression rather than more freedom. It’s a sobering thought, but one that aligns with the broader pattern we’re seeing.
One thing that immediately stands out is how this dynamic extends beyond economics. Take the rise of artificial intelligence, for instance. In China, Xi Jinping is centralizing control over the AI sector, bringing it closer to his inner circle. This isn’t just about technological advancement—it’s about creating a new base of support, a new elite whose success depends on the leader. This could give Xi more leverage against established elites, but it also raises questions about the future of repression in the country.
If you ask me, the most intriguing part of all this is how it challenges our assumptions about progress. We like to think that economic openness naturally leads to political openness, but the reality is far more complex. Economic liberalization can be a double-edged sword, empowering some while threatening others. And in autocracies, those who feel threatened often fight back—hard.
So, where does this leave us? Personally, I think it’s a call to rethink our approach to promoting democracy. Pushing for economic liberalization without considering the political dynamics at play could do more harm than good. What we need is a more nuanced strategy, one that accounts for the interests of elites and the survival instincts of dictators.
In the end, the paradox of economic liberalization isn’t just a theoretical puzzle—it’s a real-world challenge with profound implications. It forces us to confront the messy, often counterintuitive ways in which power operates. And if there’s one thing I’ve learned from studying this, it’s that the road to democracy is rarely a straight line.
