"Whatever the reason for the observed positive cross-country correlation between income and democracy, it should not be confused with causality. Being democratic does not seem important in securing economic success...
This does not mean that democracy is unimportant. But the sequence of reforms is critical for successful economic development, with economic reforms coming first. When an open andwell functioning market system is in place, democracy has a much better chance to lead to lasting prosperity.
An important reason for this is that, in order to create a successful market system, the statemust respect basic individual rights: the rule of law, private property, and the enforcement ofjustice. These fundamental rights are part and parcel of democratic government. But when itcomes to economic development, these fundamental rights are more important than otherpurely political aspects of democracy, such as universal suffrage and genuine political competition.."
This is from G. Tabellini, one of the leading experts in the field of political economy, read it here. (The title of the piece is Democracy Comes Second written for Project Syndicate)
Just as Professor Steven Cheung said long ago, Tabellini's point is that democracy may be alright for a country that has achieved a certain level of economic development but not before that. In other words, democracy should come after economic development.