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China and India Case Study

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China and India: The Pattern of Recent Growth and
Governance in a Comparative Political Economy
Perspective
By
Pranab Bardhan

The two largest countries of the world with ancient agrarian civilizations, with many centuries of dominance in the world economy in the past and recently with impressive economic growth performance, draw obvious comparison. Over the last more than sixty years the two neighboring countries having adopted sharply divergent political and economic systems also provide a point of reference in any study of comparative systems. In this short essay we shall first briefly describe their patterns of economic growth primarily in the last three decades and their implications for the massive poverty and inequality in the two countries, and then move on to discuss the nature of governance both in public and private spheres, which shape those patterns. In 1820 the two countries contributed about half of world income (measured in 1990 prices), in
1950 they contributed less than 10 per cent (the preceding century in the case of China and nearly two centuries in the case of India included rather unpleasant encounters with the international powers), and the very rough projection is that in 2025 the two countries will contribute about one-third of world income (China much more than India). In the 1870’s as well as the 1970’s per capita income in comparable prices was somewhat higher in India, but since then China has shot far ahead. Even accounting for some possible overstatement in the Chinese official rates of growth, per capita income has grown at least twice as fast in China than in India over the last three decades.
In the sectoral pattern of growth China has excelled particularly in manufacture, India more in services. China is widely regarded as the manufacturing center of the world (although this is not yet quite true in...

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