is democracy bad for growth?

Why did China outperform India?

“Shanghai Theory of Economic Growth”

  • Infrastructures
  • Strong government
  • State capitalism and government ownership
  • Democracy is a hindrance to growth

It is neither infrastructure (Soviet Union vs China before 1989) nor strong government (Pakistan vs India by 2008) nor state capitalism (success of Korea, Singapore vs failures Burma and DPRK).

So why did China so systematically outperform India even during its Cultural Revolution?

China’s greatest advantage over India was basic education (literacy rate – to read/write 1500 Chinese characters vs write your name in any Indian language you happen to speak) whereas India focused heavily on tertiary education instead.

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