China and India: The Institutional Roots of Differential Performance

At the start of the so‐called development race sixty years ago, China, showcasing revolutionary socialism, and India, boasting parliamentary democracy, had close similarities in economic structures and levels of development, but striking differences in terms of cultural cohesion, institutional flexibility and political orientation. The outcome of the race is unambiguous: the question is not who won, but why and how? It is argued here that a wide margin had already opened up in China's favour by the time of the systemic or policy‐regime switch‐points, 1978 in China, and shortly thereafter in India. The author seeks explanations for this differential performance in the divergent institutional configurations of the two societies and economies, especially in the rural sector in the pre‐reform period, and highlights the contrast between the power of the Chinese mass mobilization mode of transformation and the persistent institutional rigidities and obstacles in the Indian case. Post‐reforms, processes of ‘pervergence’— an emerging congruence in negative social features — appear to dominate over tendencies towards conventional convergence. The author reflects on the historical significance of the two development paths: did Nehruvian state‐led planned development and Maoist socialism serve essentially as pioneers of capitalism, leveraging the re‐launching of the two once‐powerful Asian giants back into the global capitalist game on dramatically revised terms of engagement?