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Democracy and Late Industrialization in India and China

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The effect of political regimes on economic growth has long been a contentious issue. While earlier studies claimed that democracy unleashes pressures for immediate consumption at the cost of investment and hence of economic growth (Galenson 1959, de Schweinitz 1959, Huntinton 1968, Huntinton and Domiguez 1975), more recent theoretical studies (Barro 1990, Findlay 1990, Olson 1991, Przeworski 1990) argued that dictatorships are sources of inefficiency. In a panel study of countries between 1950 and 1990, Przeworski et al. (2000, pp.178-9) concluded that there is no trade-off between democracy and development. However, given the common deficiency of missing variable bias associated with parsimonious models in large-N studies, it is possible that some individual country’s economic success or failure has occurred due to factors other than the type of political regimes. Hence, I hope that a most-similar systems comparison between India and China would shed more light on this debate. Both being populous late-developers without rich resource endowment, China’s economic performance has far outstripped India’s since early 1980s. This leads one to question whether the authoritarian regime in China has proved to be more effective in late industrialization than the democratic system in India. In this research, I will primarily look at whether electoral constraints and legislative processes have hamstrung the Indian economy by focusing on immediate economic or electoral gains at the expense of long-term development. In addition, I will also explore alternative explanations that are commonly associated with small-N studies, such as different levels of regionalism.
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Name: Southern Political Science Association
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Liu, Zihua. "Democracy and Late Industrialization in India and China" Paper presented at the annual meeting of the Southern Political Science Association, Hotel Intercontinental, New Orleans, LA, Jan 09, 2008 <Not Available>. 2010-01-24 <http://www.allacademic.com/meta/p212201_index.html>

APA Citation:

Liu, Z. , 2008-01-09 "Democracy and Late Industrialization in India and China" Paper presented at the annual meeting of the Southern Political Science Association, Hotel Intercontinental, New Orleans, LA <Not Available>. 2010-01-24 from http://www.allacademic.com/meta/p212201_index.html

Publication Type: Conference Paper/Unpublished Manuscript
Abstract: The effect of political regimes on economic growth has long been a contentious issue. While earlier studies claimed that democracy unleashes pressures for immediate consumption at the cost of investment and hence of economic growth (Galenson 1959, de Schweinitz 1959, Huntinton 1968, Huntinton and Domiguez 1975), more recent theoretical studies (Barro 1990, Findlay 1990, Olson 1991, Przeworski 1990) argued that dictatorships are sources of inefficiency. In a panel study of countries between 1950 and 1990, Przeworski et al. (2000, pp.178-9) concluded that there is no trade-off between democracy and development. However, given the common deficiency of missing variable bias associated with parsimonious models in large-N studies, it is possible that some individual country’s economic success or failure has occurred due to factors other than the type of political regimes. Hence, I hope that a most-similar systems comparison between India and China would shed more light on this debate. Both being populous late-developers without rich resource endowment, China’s economic performance has far outstripped India’s since early 1980s. This leads one to question whether the authoritarian regime in China has proved to be more effective in late industrialization than the democratic system in India. In this research, I will primarily look at whether electoral constraints and legislative processes have hamstrung the Indian economy by focusing on immediate economic or electoral gains at the expense of long-term development. In addition, I will also explore alternative explanations that are commonly associated with small-N studies, such as different levels of regionalism.

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