ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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China and India: Idiosyncratic Paths to High Growth

If the Chinese economy had failed, mainstream economics would have described this as completely predictable, given the extent and nature of involvement of the Chinese state in the functioning of markets and the economy. The fact that China has succeeded therefore should lead us to question our textbook doctrines of development. Much of this paper is presented as a comparative study of India, China and, briefly, other Asian nations. It is shown that the mainsprings of development in these nations are widely different, even though their trajectories of growth are converging. The paper argues that social and political priming plays a major role in determining which economic policies will work. In the case of China, while the liberalisation from 1978 onwards was important, the social preconditioning achieved during the high-noon of the Maoist period, up to 1978, was no less significant. In judging the sustainability of growth in Asia it is essential to keep these social and political factors in mind.

A rst sketch of this paper was developed at the invitation of Gary Becker for presentation at a conference in Tokyo in September 2008. I am grateful to him for this opportunity. I would also like to thank Alaka Basu, Jayant Vivek Ganguli, Tom Lyons, and Henry Wan for reading through subsequent drafts of the paper and providing many useful criticisms and suggestions, to Brian Dillon for research assistance, and to Sherm Cochran for directing me to some relevant references.

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