Several comments accuse Becker and me of neglecting the importance of institutions. I don't think this is an accurate accusation. Of course just drafting a constitution or laws creating rights to free speech, etc., is not enough to create a liberal democracy--you need media, courts, police, etc. That goes without saying. My point was only that democracy is not enough; that a nation needs rights as well.
A very interesting question raised by several comments is whether the Palestinians who voted for Hamas were behaving "rationally." On the one hand, Fatah was corrupt and inefficient; on the other hand, Hamas by its extremism and lethal antagonism to Israel could easily bring complete disaster on the Palestinians. I don't think the issue is rationality; it is information. In situations of great uncertainty, the error rate is high. It is easy to point to electoral outcomes, even in nations such as the United States that have a highly educated population and a long history of democratic politics, that in retrospect were clearly mistaken. But I agree with those of you who suggest that redistributive policies, for example those championed by Hamas, have particular appeal to an unsophisticated eelctorate, which doesn't understand the downside of such policies in retarding economic growth.
It was certainly a weakness of my post not to say anything about the religious element in Hamas's victory. I wish I had something to say about the causes and cures of religious zealotry. The one thing that is clear about Islam is that its votaries take religion more seriously than any other body of religious believers. This has profound political implications, but I do not know of any satisfactory analysis of the underlying phenomnenon.
I completely agree with those commenters who say that democracy is not a panacea, that it is compatible with cruel and aggressive policies (with many illustrations from U.S. history). Remember that I'm a Schumpeterian; to me, democracy is simply the system in which the rulers stand for election at frequent intervals. Such a system tends to align policy with public opinion, but there is no reason why public opinion can't be exploitive, discriminatory, etc. What does seem true is that democracy, plus rights, provides a good framework for prosperity, and that a prosperous country is unlikely to initiate a war, because commercial values tend to be antagonistic to martial values. "Unlikely" is an important qualification. A democratic country such as the United States, which has been thrust into an "imperial" position, becoming the "world's policeman," is liikely to be involved in frequent military operations, some of which it will have initiated. But if democratic countries are indeed unlikely to go to war, then two democratic countries are very unlikely to go to war with each other.