Conflict, Institutional Change, and Development in the Era of Globalization
Edited by Joachim Ahrens, Rolf Caspers and Janina Weingarth
Chapter 8: Successfully Catching Up: Non-Orthodox Economic and Governance Reforms in India and China
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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