There have been a number of low tax, rule of law city states like Hong Kong and Singapore that did rather well and provided a refuge for many Chinese when China was going a bit nuts under Mao and the like. It's not all bleak.
Singapore specifically is an example people use to illustrate the inherent flaws of the Democracy Index rating system. This is a country with low press freedom, one ruling party that sues the opposition into bankruptcy for "defamation" to prevent any loss of power, and oh, they execute people for carrying drugs.