| Font Size |
China-beats-India is one of the standard product features in the crowded market for global studies. But there’s an exception: a recent one, a remarkable one and one that has counter-intuitive lessons for both free market wallahs and market skeptics as they debate public policy in this country.
India is 45th and China, 75th, in the latest edition of the London-based Legatum Institute’s Prosperity Index. Released last month, the index processes data for 104 countries, covering 90% of the world’s population. This is the third Legatum Prosperity Index. But it has already captured global attention. It attempts to measure prosperity by going beyond GDP but by avoiding the woolliness usually associated with the GDP-is-not-enough crowd.
India being ranked far ahead of China in the 2009 Prosperity Index is even more eye-catching because in the first two editions of this index, in 2008 and 2007, the usual China-beats-India rule applied. In 2008, India was a lowly 70th and China, 54th. In 2007, India’s rank was 46th to China’s 42nd.
What changed in 2009? The basic reason seems to be that as the index covers more and more variables and finetunes the concept of ‘well-being’ — how citizens in a country feel about themselves — the importance of personal freedom, institutional maturity and mutual trust is increasing.
In the 2009 Prosperity Index, India, China and 102 other countries were assessed under 79 variables grouped under 9 sub-indices. The sub-indices are economic fundamentals, entrepreneurship and innovation, education, democratic institutions, governance, health, personal freedom, security and social capital.
Even now, not all the variables under these sub-indices are what economists and statisticians call robust, that is, amenable to solid data-crunching, especially across countries. But still, a lot of data was thoroughly processed and the results are therefore important.
China easily outperforms India in the two economic subindices — an unsurprising result. China also does better than India in health, education, general safety subindices. But in domestic institutional maturity, India is ranked 36th to China’s 100th. Similar wide gaps to India’s advantage exist in governance — India, 41st, China, 93rd — and personal freedom — 47th and 91st. These are somewhat unsurprising, too, except that the wide margins should be noted by all those sceptical about Indian democracy’s ‘real’ advantage.
A really interesting finding is in the social capital subindex: India is ranked 5th and China, 70th. This is the only subindex where India is in the top 10 or even in the top 20. What is social capital? A measure of the extent to which people and communities support each other. The study finds that building trust and personal/community relationships is far easier in India than in China. Considering that China is ethnically and religiously a far more homogenous society than India, this is food for interesting thought.
This is also one of the counter-intuitive implications — for those in the free market corner. They usually discount social capital in their analyses, sometimes equating it with inefficient tradition that should be supplanted by market rules. These findings show India’s ‘traditions’ may be getting something right.
Free market types should also note the Legatum study’s findings that European high tax/social welfare heavy countries beat Anglo-Americans when it comes to a well-rounded measure of prosperity. The first 8 countries in the rankings are European countries and Canada, which has a socio-economic system closer to the European model than the American one. Clearly, the ‘small government means better-off citizens’ orthodoxy needs interrogation by its proponents.
But market sceptics should pause and think, too. The consistent finding is that countries that provide better environment for private capital end up giving a better deal for its citizens. The lowest rank countries all score awfully on this count.
Finally, there’s a counter-intuitive lesson for the subset of free market sceptics who argue China is great because of its communism. The subindices where China beats India are those that measure market friendliness. China gives a better deal to business. India gives a better deal to people.
India beats China because how people feel is hugely important. If India makes private capital feel better — a very doable job — all kinds of global studies, not just Legatum’s, may start showing different results for the India-China binary.
Discuss this story on expressindia forums
|
|
Yes, India is more prosperous and free than China. Free to be poor, illiterate, malnourished, and discriminated by their uppercaste! All that joy and happiness plus 1 vote every 5 years! The Chinese are so envious of India.
In my opinion, most Indians go mad as most Chinese did in 1950s and 1960s. We gave up all unrealistic ambitions in later 1970s but you are ambitiously pursuing your holy 'Spanish castle'. What you should do is to control population explosion, improve your shaky transportation system, send all kids to school, and develop economy (all industry, not only IT which benefits minority of people). We modernize our national defence system because US and its flunkies manage to be hostile to us. We do what we are able to do. We don't try anything beyond our financial capability. We buy what we need, and study and improve them ourselves. Frankly speaking, India is far away from China in all fields except IT which can't save a country alone. If you intend to compete against China, for example, buying weapons with all you earn, you will be caught in a trap just as USSR did by US.
Unless indians are educated enough to limit their family sizes, there is no way for india to compete china, even to its neighbor Pak.
"Tawang belong to China, Dalai Lama is a liar, Our government is criminally insane and Chinese government is saint." There, I said it. Now I can go and sleep peacefully. Editors might not choose to publish it, but no government agent is coming to harass me or my family, no one is going to send me to prison for this one sentence in India. If what I say appear to be a joke, many leftists raise such voices frequently without fear of any retribution. That is the difference between India and China, and good enough for me to be ready to be perpetually inferior to China in all respect. If we can better manage our food resources and feed our children that is good enough for me to be the last one at all counts in all the indices or tables. All measurements are false- part of Maya, proclaimed vedantic saints, and their children fall prey to some petty tables of even 'meta measurements'. It just show nothing is static.
There are good points raised by readers. Why don't our leaders and Govt Officials start addressing these issues and come up with comprehensive plan of action. After all we are democratic country where we can project issues to the Govt to address. Why Chines Govt is so efficient while our is pathetic. Is our democracy is flawed to produce such an outcome???
When I read this article today morning, I could not help speculating what would Indian middle class ( A class suffers from hugh inferiority complex from China, Europe and US) would react to it. The answer was predictable. This class would laugh and damn this article. Previous comments on this article confirm my prediction. All of them have same tone. How can you suggest India has beaten China. We have worst politicians (which the middle class did not elect by not voting), stinking cities, hopeless infrastructure etc.etc... To me the worst thing about India is not its politicians, cities and infrastructure, but the stink that comes from the inferiority complex of its middle class. Remove that stink and everything will be alright.
Fantastic! See what MMS and Sonia Have achieved! Why China, India can beat any country easily and permanently if Corruption, Sychophancy, mafia- politician nexus, selfishness, lack of civic sense, dishonesty, liberty to bare, etc... are included. Only regret is that it has come much later after the elections. MMS and Sonia would have won all the Lok Sabha seats !!!
Ha ha ha what a joke !!!.....We are way behind China dude....They are effecient and well organized not falling prey to unnecessary and worthless chaos and corruption.
When I read this article today morning, I could not help speculating what would Indian middle class ( A class suffers from hugh inferiority complex from China, Europe and US) would react to it. The answer was predictable. This class would laugh and damn this article. Previous comments on this article confirm my prediction. All of them have same tone. How can you suggest India has beaten China. We have worst politicians (which the middle class did not elect by not voting), stinking cities, hopeless infrastructure etc.etc... To me the worst thing about India is not its politicians, cities and infrastructure, but the stink that comes from the inferiority complex of its middle class. Remove that stink and everything will be alright.
I think people missing an important point that highlights the evolution in which market analysis is done. It doesnt really matter that India beats China.. both seem to be ranked pretty low. but its essential to make models like these as general as possible!!
If India is developed and has 'beaten China', then how can you accept the fact that more than 1 crore people repeatedly vote for people like Mulayam, Laloo, Mayawati, Karunanidhi and others. It is relatively easy for someone to win an election in India as most people do not vote on 'issues'. They vote because they like the colour of someones sari or because they have been given food for the day. China is far more developed than India. Her cities are a powerhouse, they are clean, efficient and modern. Indian cities are ugly, ramshackle, inefficient and stink. So stop the comparisons. India will always be known as the world's garbage dump as long as democracy exists in India.
Saubhik has a clear inferiority complex to justify an asinine index that is overwieght on democratic institions. I have been to China and their cities are fully developed and leading global cities while ours are ramshackle and third world. while we can vote, people there have far more economic freedom. what a insult
Indeed - this is the most absurd conclusion I have seen recently. How ludicrous and ill explained. We are miles off when it comes to ANYTHING in China, including desh bhakti. The only thing we have in TOO much of measure is total democracy which essentially means no citizen will follow anything that is good for the country because everybody can simply sit and argue about everything in life. In the next 25 years, at the rate at which we are crawling forward, we will not even rank 175th in any survey.
Yeh you are right, I know we are above china in the prosperity index, I came across several prosperous people shitting in the hole under the flyover, across the railway station and airport.
U shud b ashamed of urself before writing this article, or may be u wrote this while closing your eyes and burying your head in the sand, from the realities. By prosperity index you mean the likes of " kodas" and Co. . Well, by writing such stuff, you just gave the chinese a chance to laugh at us again.
You can write like this and Koda can do at least without getting shot(Already), because you are in India.This is India and This is the most important index.
Shaubhik- Now that you have sucessfully gotten the column to harp on the advantages of 'social capital', you must be feeling real good, isnt it? Without economic prosperity, there is no prosperity. This is a fact. The intangibles are very subjective, and possibly naive. We can have thousands of parameters with different weights to skew the 'findings' whichever way that suits us. These must be taken with a pinch of salt ina country where 50% of the kids are malnourished and polio still kills. We should be ashamed to even think about comparing ourselves to a country where 100% of the population has access to health services.
A piece of balloni. I have travelled to China a few times. From my observation there is absolutely no comaprison between us and them. There are a far ahead of us in every single aspect. Economically they are in some ways almost at par with the west. Socially they are far behind like us from the west and I don't think they will ever be able to match up. They just do not have what the west has, unfortunately.