The empirical evidence on the economic impact of democracy is really mixed. While the literature tends to show that democratization is good for the poorest economies, the opposite is true for rich ones. My hunch is that the poorest economies are in such a state because of massive mismanagement, in particular corruption, and a democracy can avoid the brunt of this.
But for a rich country, why insist on democracy? Look for example at the Southern European countries, where reforms are very obviously necessary, their pension systems come first to mind. Yet, governments have a very very hard time wringing these reforms through and may even fail to do so. The public is easily manipulated and governments have to give in for their own sake.
Look also at the United States. Elections there are now determined by who can hammer the most frequently his version of the facts on televisions ads, with the media failing to fact check anything because it needs all this ad revenue. This is populism to the extreme, nobody bothers to explain trade-offs and politicians on both side advocate impossible policies. The realist has no chance.
What is the solution? A benevolent dictator would be ideal, but how to make sure the dictator is and stays benevolent? Or maybe the problem is really with representative democracy, that is politicians depend on popularity contests for their livelihood and those contests are easily rigged. A solution then could be direct democracy, which gives much more responsibility to the electorate, who may they seek to get more educated about issues before voting. But this could also go horribly wrong if it fails to do so.
I am really torn. But I am sure about one thing: democracy is certainly not the panacea civics textbooks seem to teach.