I agree with your assumption that probably more Indians know more about China than Chinese know about India.

I was faced with that reality when living in India last January.

Never met a more vocal group of people so well-learned in the Chinese economy, although, admittedly, there was a lot of conspiracy theories thrown in. Like, China was attempting to invade India when they invaded Taiwan.

Hi Doug! Yes, I do find it interesting that Indians often do have opinions on international issues that they are willing to share with others, whereas I find discussions with people I've just met in China generally do not encompass regional geopolitics. I think there is something to the relationship between the political culture (and perhaps more than that) of India and this tendency you speak of.

I too noticed on that business week article that the Indian spoke about both China and India, while the Chinese were speaking only about China.

I agree, Indians do know more about China. Even as far back as 1982, Vikram Seth traveled across China wrote a very interesting book. Indians have written more travel books about China compared to the Chinese about India. There are more Indian tourist arrivals to China than the other way round.

While I do agree with Simon that for most developing country China is a good model but the problem that in most these countries the one party that holds power cannot hold it for long and looses it some coup. Or like in some places like NKorea or Zimb. the leaders never seem to learn.

Oh Sorry, It should be - I agree with HK Dave and not Simon.

Dave, good post!
Isn't democracy incompatible with most of economic theories? I have heard some economists talking about that. Some radicals thought vote should be allowed to sell and buy in a open market, which is believed to help the economy grow, Haha...
By the way, which model is better, India or China? I guess we need at least another 50 years to tell.

I think in India, a country with a long tradition now of democracy and free speech, it is natural that there are more intellectual elites that write books - because the downside to doing so is far lower than in a country like China.

Hi Lin, nice to see you again. I would not say that democracy and economic development are incompatible - especially in the developed world. I do think though, there s something powerful about the notion that before a minimum level of GDP per capita or income per capita is reached, democracy generally fails to take hold in a country.

What most comparative government academics believe this represents is that in wealthier countries where a middle class has formed, there are often demands from that middle class for a greater say in governance. This desire for greater democracy, or more diffused power from within, generally means that democracy will be successfully grafted onto that country.

However, when democracy is introduced into a country from the outside, it generally fails unless there is also a strong middle class and there has been some horrific war or catastrophic event (i.e. Germany and Japan after WW II).

I would also caution people from equating the riots found in many Chinese cities with a call by the middle class for greater political liberalization. Because they really are not the same thing - the rioters are protesting government corruption and mismanagement - they are not asking for a top-down revolution. These riots are signs of widespread social malaise and political mismanagement, but until we see corporate managers in Shanghai take to the streets to demand more political autonomy I think democracy in China is quite far off.

Dave, I think that I agree with you on most of points.
But I don't think the comparison between India and China is fair enough. India had never been one united nation in history until the independence. I couldn’t imagine what will happen to China if we also have as many religions and languages as Indians have. Never mention they used to divide people in term of brahman, kshatriyas, vaisyas, sudras and harijan. Perhaps India never united culturally, while Chinese characters bond Chinese much more closely together than English does for India. Still China’s gotten localized capital flow and protectionism today, which are probably not so good for a market economy. Not to mention that dictatorship also has given China great starving period and culture revolution. Considering all these facts, I admire what India has done so far.
The famous local Hongkonger economist Steven Cheung doesn’t like democracy too much because he considers the transaction fee is too high for a business under the democracy. Of course he got tons of examples from today’s development in China. However if we jump up one level and focus on the big picture we found Steven Cheung’s theory need a very important prerequisite: a smart and benign dictator. Otherwise if count all social costs in the first 30 years of PRC as the transaction fee in his theory, he probably will lose all his pants.
Amartya Sen has an article called “Democracy as a Universal Value”, which has been very popular in China. I guess Sen is right unless Cheung comes up with some other mechanism to generate a smart and benign dictator, which probably is GOD.
Right now looks like China is doing better. However the nature of authoritarian regime decides that the economic development will be fast only if the governing group do things right, but the disaster will be huge in case the governing group do things wrong. That’s why I mentioned that perhaps we need at least another 50 years to tell which model is more successful. There is a possibility that we may never know which model is better. Consider the economic development under authoritarian regime is an upward wave with big fluctuations, (just like what Chicago boys did for Chili) while the economic development under the democratic regime is also upward wave but with only small fluctuations. (Botswana, a good example? I am not sure…) Only by averaging out the fluctuations for a big enough data set, we can get slopes and compare them. Apparently this may never be achieved in reality.

Sorry for not responding earlier, I had an injury this weekend that makes it difficult to type! If you look at many Western countries, their period of greatest industrialization actually occurred when a majority of their populations did not have the vote (USA, Europe, etc). However, once you surpass a certain level of income, not only is it likely that democracy will happen, but that it is actually a positive benefit to the economy.

To generalize massively, entire regions of China are being lifted out of poverty by modernization; in India, though, while there is major wealth generation underway, the poor people of the cities are still incredibly poor. China's authoritarian revolution are producing many great businessmen and innovators - it seems to me though that circuit designers and software programmers flourish much more under democracies, which seems to enhance creative thinking ( a la India).

IMHO there is not neccessarily a correlation between democracy and economics development, as we have observed in the 4 little dragons and now the maga-dragon (also India and Philippines). But this is solely based on observations rather than theory. So we should debate about this argument. But if this is true, democracy is neither a plus nor a minus for India. I am, therefore, skeptical of the arguments that India needs a benign authoritarian. I think they are overlooking more fundamental factors. e.g. see below.

Meanwhile, many people have argued that the foundation for economic development is liberty (sort of 'freedom'). In view of that, China is actually quite a 'free countries', in terms of what you do and say in private. On the contrary, Indians enjoy free speech and election, but it is not free to move between caste. That in certain degree restricts mobility and incentive to work hard.

I tend to think that a fair and level playing field where hard working is rewarded properly is much more important democracy. In fact, one can even argue in Korea and Taiwan in the 1960-80 many bright people frustrated at political opportunites turned their mind to economic activities. (same for China today)

Therefore, one of the biggest obstacle for democracies in the developing world is corruption, which destroys meritocracy. We should note that China is relatively less corrupted compared to all these democracies (from India to Philippine, maybe even Thailand/Malaysia).
Democracy is a whole package. Democracy with highly corrupted bureacrats is hardly the same as clean democracies in Europe and US. I still don't fully understand what went wrong with the 'corrupted democracies'. Until then, I would classify democracy as 2 types.

Note also that US and Europe are clean democracies. Arguably Singapore also started as a democracy (at least during its first 10 years), and Lee KY quickly moved to fight corruption. HK was almost corruption free since ICAC. Taiwan/Korea were not free of corruption, but the situation was not as bad as INA/IND/PHL.

For India, the other obstacle is the caste system. As I have discussed in an earlier post.
http://sun-bin.blogspot.com/2005/08/china-vs-india-and-muslim-world.html

i meant to day "...Note also that US and Europe have been (relatively clean democracies since a couple hundred years ago...", i.e. before a middle class is formed

Hi, Dave, I hope you can recover soon, and here comes the lengthy post by Bin:)
Well, I would agree with you and Bin on most of your points. But in your arguements, the mechanism of firing stupid and brutal dictators and hiring smart and benign dictators is missing. Without this mechanism, the future of China will be dangered.

Bin, thank your for your comments on my blog. I am out for ACS meeting currently. Sorry for the late response.

Lin,

Yes, we do need a mechanism for getting rid of 'stupid and brutal rulers' (see HK 1997-2004). The problem is that I am not sure if democracy is the right answer (or is not). But it does help to find a lesser evil. at least IND/INA today is better than Iraq or Suharto's INA.

My argument was aslo a reaction to those who tried to argue that India should adopt China's model of benign authoritatian. I think they missed the point in that, if you have a benign dictator, you may get him in either political system (see Singapore). Your point supports this view, I think.

Sorry I sound ambivalent on this issue, but i do think many of the current theories are not satisfactory and we do not have a really good answer yet.

I might be in some disagreement with Sun Bin in that I do think that the case of the 'Asian Tigers' actually demonstrate a correlation between economic development and democracy. South Korea and Taiwan both have become democracies in the last quarter century, and I have no doubt that Hong Kong would be a democracy had it not been handed back to China. Singapore is a quasi-democracy in that there are elections. Many democracy theorists believe that you cannot call a country a democracy until the ruling party has been voted out of office, something that has yet to happen in Singapore. But given the small size of places like Singapore and Hong Kong, they are easier places to control. I do agree with Sun Bin and Lin on the ambivalence of democracy in helping or hindering economic growth. The point I was trying to make earlier was that democracy does ultimately help advanced economies in that I would argue it spurs creativity and innovation (something Singapore seems to always have a shortage of, despite its many strengths). But consensus building is extremely difficult if not impossible for leaders to make hard decisions that have long-term benefits but short-term costs.

Ultimately, I think for advanced economies that have hit a mature phase, democracy makes the most sense only because of the easy, bloodless method whereby power can be transferred without violence - it is a standardized system of regime change. That alone is worth something when the benign authoritarian leader you speak of has stayed beyond his time to control.

HK Dave,

I do agree with your conclusion. I think it would make no sense for India to give up democracy in pursuit of a highly uncertain possibility of benign dictatorship.

When I mentioned 'correlation' for the 4 tigers (or dragons), one of the criteria is what you defined: change of regime.
Taiwan: early 1990s (lee tenghui) 1996 (first real election), 2000 (chen sb: first change of regime)
S Korea: 1988 (roh taw-woo, first election), or arguably, 1993 ( youngsam - first change of regime)

HK: whether HK "could" become a democracy is not relevant, imho. the fact is, HK has never been one, so it did not help to demonstrate any correlation of democracy with economic development. In fact, it demonstrated otherwise, that the rule of law and (hence) a clean gov't, and liberty/freedom, together do the job - despite its non-democracy.
(In fact, many believe neither the british nor many ppl in HK have the desire to push for democracy if not for 1997)

All these 3 areas crossed GDP/cap=$10k mark before the earliest sign of democracy (eg 1988). (except for singapore, for which you could argue it was democratic in 1965, though later turned into a 'quasi' one)

Having said that, it does not mean democracy is not good for economic development, as we agreed and you described in your last paragraph. plus we still have the western models as examples.