Any political system depends on the people in it and around it.
If you get the right dictator a dictatorship is great. Ataturk is probably the best 20th century example. He fast-tracked Turkey out of the Ottoman stagnation and into the modern world. He basically ruled by decree, and the country was better off for it because it allowed him to do a lot more than he ever could have done in a democratic system. As one of my professors once said, he was incredibly difficult to work with because he thought he was always right, but it was okay because he WAS always right.
The problem is that the vast majority of dictators aren't cut from that cloth. They think they're always right, but they're not. The Shah of Iran is a great example - he thought he was Iran's Ataturk, but he wasn't half the man Ataturk was. So instead of bringing Iran into the modern world he provoked a revolution.
The nice thing about a democracy is that it's less dependent on finding that perfect leader, because the checks and balances curb everybody's authority. It also allows you to get rid of an ineffective leader easily. But it requires an educated, engaged, and informed electorate to function properly.
I'd argue that the American democracy is not the most effective in the world right now, mostly due to high levels of apathy. There are several countries around the world that have healthier democracies than the United States.
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