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The Impact Of Middle Class Consumption On Democratization In Northeast Asia

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Technical Report

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Naval Postgraduate School Monterey United States

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Despite four decades of astonishing economic growth, Chinas authoritarian government remains firmly entrenched in power. This fact challenges modernization theory, which anticipates that as countries become wealthier they will also become more democratic. This thesis proposes that middle-class consumption is a missing variable in the causal chain for democratization in Northeast Asian countries under authoritarian control. The study examines the effects of consumption in a cross-country comparison of South Korea and Taiwan during the years immediately prior to their respective democratizations. South Koreas middle-class consumption patterns evolved after decades of rapid economic growth, and state-induced wage pressure made the aspirational middle-class lifestyle unaffordable to lower middle-class Koreans. This consumption disparity caused the structurally disadvantaged working-class Koreans to join national protests that ultimately ushered in democracy. Examining modern China, the study finds a similar consumption disparity among the middle classes resulting from income inequality and a mobility-restraining household registration system. There exists a key political tension around structurally disadvantaged Chinese migrant workers earning lower wages and lacking welfare mechanisms afforded to urban residents under the hukou system. With the size of Chinas lower middle class expected to sharply expand over the next decade, the tension around consumption could act as a catalyst for middle-class led democratization.

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