Growth, Reforms and Inequality: India and China Since the 1980s
43 Pages Posted: 19 Jul 2010 Last revised: 23 Dec 2014
Date Written: 2010
The rapid increase in economic inequality in India and China, in a period of surging aggregate growth and their increasingly critical influence in shaping the global political economy, is a crucial yet unusual example of the ‘Politics in Hard Times’. It demonstrates that national economic prosperity, in a global context of decelerating economic growth, may nevertheless create its own hard times. “Growth, Reforms and Inequality: India and China since the 1980s” is part of an interdisciplinary co-authored project that investigates this important phenomenon.
Since 1980, India and China have been the two fastest growing economies in the world. Both countries have witnessed remarkable transformations in the wake of concerted neo-liberal reforms, especially since the late 1980s, which have unleashed aggregate growth, encouraged structural diversification and shifted the balance of power between and amongst state institutions and social forces in their respective political economies. Yet both India and China have also witnessed rising economic inequalities in this period in terms of income and consumption patterns, not to mention other measures of social welfare. These increasing disparities have caused rising social discontent, political opposition and increasingly violent protest. The phenomenon of growing economic inequality amidst national economic booms has compelled both national governments to introduce a variety of political, institutional and policy measures.
This paper seeks to describe, explain and assess these world significant trends. The first section examines trends in patterns of income and consumption in India and China since the late 1980s on the basis of new statistical data that allows inter-country comparison, something which has been largely neglected in studies of inequality in India and China to date. The second section considers possible rival explanations for these patterns by assessing the relative merit of leading economic, political and sociological theories. The last section (still to be written) examines the range of responses by New Delhi and Beijing to these challenges, assesses the impact of their different political regimes and considers what might be learned from their respective experiences.
Keywords: India, China, growth, reforms, inequality
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