Good Governance in the 21st Century

Good Governance in the 21st Century

Conflict, Institutional Change, and Development in the Era of Globalization

New Thinking in Political Economy series

Edited by Joachim Ahrens, Rolf Caspers and Janina Weingarth

This book explores the interdependences of economic globalisation, political tensions, and national policymaking whilst analysing opportunities for governance reform at both national and international levels. It considers how governance mechanisms can be fashioned in order to both exploit the opportunities of globalization and cope with the numerous potential conflicts and risks.

Chapter 8: Successfully Catching Up: Non-Orthodox Economic and Governance Reforms in India and China

Christian Roland

Subjects: development studies, development economics, economics and finance, development economics, institutional economics, political economy, politics and public policy, international relations, political economy


8. Successfully Catching Up: NonOrthodox Economic and Governance Reforms in India and China Christian Roland* India and China have been two of the fastest-growing countries over the last 25 years with average annual gross domestic product (GDP) growth rates of 5.8 per cent and 9.1 per cent between 1980 and 2004; this resulted in a fourfold increase of GDP in India and a ninefold one in China. During that period, GDP per capita grew by 3.8 per cent in India and 8.3 per cent in China.} This astonishing growth performance is only rivaled by Japan's and Germany's ascendancy after World War II and the rise of the Asian Tigers in the 1970s and 1980s. Nonetheless, India's and China's take-off is more impressive as it involved far larger populations - around 700 million in India and almost a billion in China in 1980. Equally astonishing as the raw figures involved, is how this growth performance came about. For an observer comparing the standard policy recommendations with the actual policies followed, the growth acceleration must come as a surprise: both countries have deviated significantly from the orthodox policy recommendations commonly given to developing countries. The economic take-off in China, for example, occurred despite the absence of private property rights, large-scale privatization and a market-based banking sector. Qian (2003, p. 298) stresses that [t]he Chinese path of refonn and its associated rapid growth is puzzling because it seems to defy ... conventional wisdom. Although China has adopted many of the policies advocated by...

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