India vs. China
Property Rights vs. Central Planning
While India notched up average annual GDP growth of 5.9 percent from 1993-2003, China raced ahead at a 9.0 percent clip.
But a more favorable demographic profile, a stronger capacity for technological innovation and Western-style democratic institutions provide the potential for India to raise its game and catch up with its neighbor.
"It will be much easier for China to go from $500 to $1,000 than from $1,000 to $5,000," said Dominique Dwor-Frecaut of Barclays Capital in Singapore.
Tyler Cowen, of Marginal Revolution, has posted quite a bit about India, but he has not made any predictions as strong as these.
I like the concept of having well-established and easily enforced legal entitlements. India has had these for quite some time; they are clearly necessary, but not sufficient, conditions for prolonged growth. The other thing India is acquiring is an appreciation of the benefits of free trade. I cannot imagine these differences will be enough, however, for India's GDP per capita to overtake that of China any time in the near future.
thanks to Jack for the pointer.
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