Culture and Economic Development in Late Comers: Comparing China and India

China and India are both late comers to industrialization. Both adopted similar economic development strategies after World War II, but the per capita GDP diverged significantly in the last 40 years. While economic growth and development have many components, we explain the difference in economic pe...

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Bibliographic Details
Published inThe Chinese economy Vol. 57; no. 5; pp. 379 - 394
Main Authors Barbiero, Thomas, Zhou, Haiwen
Format Journal Article
LanguageEnglish
Published Abingdon Routledge 02.09.2024
Taylor & Francis Ltd
Subjects
Caste
Culture
Development strategies
Economic development
Economic growth
Economic performance
economy of China
Exports
Industrial development
Industrialization
Infrastructure
Investments
political economy
Religion
Service industries
state capacity
technological capabilities
World War II
China
India
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Summary:China and India are both late comers to industrialization. Both adopted similar economic development strategies after World War II, but the per capita GDP diverged significantly in the last 40 years. While economic growth and development have many components, we explain the difference in economic performance by emphasizing the difference in state capacity in the two economies. A country's state capacity is affected by culture and history. China established a unified language and culture two thousand years ago that enabled it to develop strong state capacity. With a strong state capacity, China made crucial investments in infrastructure and in key heavy industries and developed technological capabilities to help start and sustain growth. India, on the other hand, is a country segmented by religion, caste, and language which has hindered the development of effective state capacity, and thus complementary state investments to spur economic growth. Moreover, India has up to now relied more heavily on expansion of its service sector compared to China, which has hindered its exports, a crucial element that helped China's economy. India's future industrialization crucially depends on national integration and concomitant strengthening of state capacity.
ISSN:1097-1475
1558-0954
DOI:10.1080/10971475.2024.2310328