Awakening Giants, Feet of Clay

Abstract

Both China and India have made remarkable economic progress in the last quarter century—China more than India—but both have severe structural and institutional problems that will hobble them for many years to come. In this article, after a comparative study of the two economies in terms of broad development indicators, we explore some deeper social and historical issues that underlie their differential ability to resolve collective action problems in long-term investment and to manage political conflicts, which go beyond the usual simple aggregative comparisons of an authoritarian and a democratic political regime.

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