The Communist Party took over China after the Second World War. At about the same time, India became democratic and independent from the British Empire. In India, every government has to fight periodically for a renewed mandate, which has meant that the government is more constrained in its actions, not just by the power of democratic protest and numerous civil society organisations, but also by institutions like the judiciary and the opposition. Critics like Lee Kuan Yew, the creator of modern Singapore, have argued that poor countries cannot afford democracy. Indeed, in the race between
The Communist Party took over China after the Second World War. At about the same time, India became democratic and independent from the British Empire. In India, every government has to fight periodically for a renewed mandate, which has meant that the government is more constrained in its actions, not just by the power of democratic protest and numerous civil society organisations, but also by institutions like the judiciary and the opposition. Critics like Lee Kuan Yew, the creator of modern Singapore, have argued that poor countries cannot afford democracy. Indeed, in the race between China and India for growth, it would seem that authoritarian China beats democratic India hands down. Simple extrapolation then suggests India should never be spoken of in the same breath as China; China has an economy as well as a per capita income (since the two countries have about the same population) that is nearly five times as large as India’s at market exchange rates. Yet, there are more similarities between the two countries’ growth paths than we allow for. Both China and India were government-dominated systems with weak markets at the beginning of their respective reforms. China’s government, under the centralised control of the Communist Party, was more able to execute, while India’s markets and private sector were a little stronger at the outset. The initial liberalisations, prompted by the end of Maoism in China and a financial crisis in India, greased by corruption since bot...
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China's growth is institutionl vs india's household story
