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Awakening Giants, Feet of Clay

Awakening Giants, Feet of Clay: Assessing the Economic Rise of China and India

With a new afterword by the author PRANAB BARDHAN
Copyright Date: 2010
Pages: 200
Stable URL: http://www.jstor.org/stable/j.ctt1r2g0q
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    Awakening Giants, Feet of Clay
    Book Description:

    The recent economic rise of China and India has attracted a great deal of attention--and justifiably so. Together, the two countries account for one-fifth of the global economy and are projected to represent a full third of the world's income by 2025. Yet, many of the views regarding China and India's market reforms and high growth have been tendentious, exaggerated, or oversimplified.Awakening Giants, Feet of Clayscrutinizes the phenomenal rise of both nations, and demolishes the myths that have accumulated around the economic achievements of these two giants in the last quarter century. Exploring the challenges that both countries must overcome to become true leaders in the international economy, Pranab Bardhan looks beyond short-run macroeconomic issues to examine and compare China and India's major policy changes, political and economic structures, and current general performance.

    Bardhan investigates the two countries' economic reforms, each nation's pattern and composition of growth, and the problems afflicting their agricultural, industrial, infrastructural, and financial sectors. He considers how these factors affect China and India's poverty, inequality, and environment, how political factors shape each country's pattern of burgeoning capitalism, and how significant poverty reduction in both countries is mainly due to domestic factors--not global integration, as most would believe. He shows how authoritarianism has distorted Chinese development while democratic governance in India has been marred by severe accountability failures.

    Full of valuable insights,Awakening Giants, Feet of Clayprovides a nuanced picture of China and India's complex political economy at a time of startling global reconfiguration and change.

    eISBN: 978-1-4008-4500-2
    Subjects: Business, Political Science, Economics
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Table of Contents

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  1. Front Matter (pp. i-iv)
  2. Table of Contents (pp. v-vi)
  3. PREFACE (pp. vii-x)
    Pranab Bardhan
  4. Chapter 1 Introduction: The Myths Floating around the Giants (pp. 1-18)

    Over the past few years the media, particularly the financial press, have been all agog over the rise of China and India in the international economy (and how they have done relatively well even in the current global downturn). After a long period of relative stagnation, these two countries, containing nearly two-fifths of the world population, have had their incomes growing at remarkably high rates over the past quarter century or so. In 1820 these two countries contributed nearly half of world income; in 1950 their share was less than one-tenth; currently it is about one-fifth, and the projection is...

  5. Chapter 2 Economic Reform and Growth: Differing Patterns and Institutions (pp. 19-41)

    In both China and India economic reform started in the 1980s. In China it largely started in the form of experiments by some local farmers and conniving administrators. In 1978–1979, some farmers in Anhui province started testing the waters of the existing commune control over land use and effectively launched a movement of taking over land use as a private right of farmers. This spread very fast among farmers in neighboring villages and provinces, and within a few years the administration rationalized this evolving system all over China as what came to be called the household responsibility system, essentially...

  6. Chapter 3 Agriculture: Still the Most Crowded Sector (pp. 42-53)

    China and India are two of the ancient agrarian economies of the world, supporting massive numbers of (mostly poor) people. Agro-climatically they are, however, quite different. India is the land of the monsoons, which means torrential rain concentrated in very short periods of the year, whereas in China the average rainfall (at least in the more settled parts of the country) is somewhat more evenly distributed over the year. As Cai and Rosegrant (2007) point out, in China the pattern of rainfall follows more closely the pattern of solar radiation, providing conditions favorable for crop growth; India lacks a similarly...

  7. Chapter 4 Infrastructure: The Dazzling Difference (pp. 54-64)

    To most outside visitors the difference between the two countries in the quantity and quality of physical infrastructure is immediately visible: the glitzy airports, multilane highways, gleaming skyscrapers, urban transportation, ports, high-speed trains, and so on all point to the indubitable fact that China is clearly far ahead of India in this matter. It is, however, important to probe the factors underlying this much too glaring difference, since they indicate some of the structural differences in the political economy and civil society of the two countries. This is particularly the case when one keeps in mind that in mind that...

  8. Chapter 5 High Saving, Low Financial Intermediation (pp. 65-77)

    By official accounts, both China and India are high savers (and investors) for their range of per capita income. As shown in tables 3 and 4, the domestic (gross) saving rate in 2005 was 42 percent in China and 31 percent in India (in 2008 they were even higher, 54 percent in China and 38 percent for India); the Chinese rate is, of course, the highest in the world, but even the Indian rate is higher¹ than that anywhere in the much richer countries of North and South America, for example. It has been suggested—see, for example, Heston (2008)—...

  9. Chapter 6 The Pattern of Burgeoning Capitalism (pp. 78-89)

    In both countries, some form of weak capitalism had developed many decades before Liberation or Independence. After Liberation, China installed a socialist economy both in industry and (beginning in the mid-1950s) agriculture; the private sector was minimal and operated on a minute scale and in the shadows. For the first four decades after Independence, India had a much larger private sector than China did, but many of India’s key and strategic industries were in the public sector, sometimes coexisting with the private sector in the same industry (for example, steel) and in other cases without private-sector competition (for example, power-plant...

  10. Chapter 7 Poverty and Inequality: How Is the Growth Shared? (pp. 90-103)

    In both China and India there is a general sense that much of the benefit of economic growth has been concentrated, that large masses of people are still very poor, and that the process of global integration of these two countries, for all the hype in the financial press, has left many people behind. In this chapter we discuss this issue with the help of the available empirical data and come to conclusions that are somewhat more ambiguous than are suggested in the popular discussion.

    First, take the case of absolute poverty, the scourge of both countries for at least...

  11. Chapter 8 The Social Sector: The Relevance of the Socialist Legacy (pp. 104-116)

    In some basic indicators of the social sector China is clearly more advanced than India, but this is one area where the Chinese differential advance was achieved in the socialist period and, if anything, the period of market reform has eroded some of this advance. We shall focus on two parts of this sector, health and education. Even those who are primarily interested in economic growth will agree that these two basic ingredients of human capital in a population are crucial not just for current well-being but for long-term development and worker productivity as well. In both of these spheres...

  12. Chapter 9 Environment: The Alarming Signs (pp. 117-124)

    The environment includes many different aspects of nature and the ecosystem that envelops human life, even though most public discussion currently tends to concentrate on issues around global warming. In this chapter we shall focus mainly on the local commons that affect the daily lives and livelihoods of many poor people in China and India. Local environmental resources include the quality of air and water as basic necessities of life as well as the conditions of the village commons such as forests, fisheries, agricultural land, and irrigation, which are particularly important for the rural poor. For comparative purposes we need...

  13. Chapter 10 Looking to the Future: Through the Lens of Political Economy (pp. 125-160)

    Winston Churchill once described the qualifications of a politician as “the ability to foretell what is going to happen tomorrow, next week, next month, and next year; and to have the ability afterwards to explain why it didn’t happen.” Being seriously deficient in both of these abilities and yet frequently confronted with the usual question about the future for both the countries, all I can do is to go over the broad contours of what happened and see if these give us any pointers, and also suggest qualifiers to any straightforward projections of the past into the future. In this...

  14. AFTERWORD TO THE PAPERBACK EDITION (pp. 161-166)
    Pranab Bardhan

    This book is about some of the long-run structural and political-economy factors in the two giant Asian economies. In those respects not much has changed in the three years since the original version of this book went to press, although parts of the international economic scene have become a bit murkier, and business confidence in the persistence of high growth in both China and India has receded somewhat. In both countries the mainspring of growth is domestic, even though foreign trade and investment play an important role, and what happens to domestic political governance and how it shapes the dynamics...

  15. REFERENCES (pp. 167-174)
  16. INDEX (pp. 175-178)