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Yasheng Huang: Does democracy stifle economic growth?

My topic is economic growth in China and India. And the question I want to explore with you is whether or not democracy has helped or has hindered economic growth. You may say this is not fair, because I’m selecting two countries to make a case against democracy. Actually, exactly the opposite is what I’m going to do. I’m going to use these two countries to make an economic argument for democracy, rather than against democracy.

The first question there is why China has grown so much faster than India. Over the last 30 years, in terms of the GDP growth rates, China has grown at twice the rate of India. In the last five years, the two countries have begun to converge somewhat in economic growth. But over the last 30 years, China undoubtedly has done much better than India. One simple answer is China has Shanghai and India has Mumbai. Look at the skyline of Shanghai. This is the Pudong area. The picture on India is the Dharavi slum of Mumbai in India. The idea there behind these two pictures is that the Chinese government can act above rule of law. It can plan for the long-term benefits of the country and in the process, evict millions of people — that’s just a small technical issue. Whereas in India, you cannot do that, because you have to listen to the public. You’re being constrained by the public’s opinion. Even Prime Minister Manmohan Singh agrees with that view. In an interview printed in the financial press of India, He said that he wants to make Mumbai another Shanghai. This is an Oxford-trained economist steeped in humanistic values, and yet he agrees with the high-pressure tactics of Shanghai.

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Professor Yasheng Huang of the MIT Sloane School of Management talks Democracy and Economic Growth at TEDGlobal

"Não enxergo o Brics como bloco econômico ou político viável", diz Yasheng Huang, Professor da Sloan School of Administration, do MIT

“Não enxergo o Brics como bloco econômico ou político viável”, diz Yasheng Huang, Professor da Sloan School of Administration, do MIT

A China é acusada por empresários brasileiros de fazer concorrência predatória, oferecendo artigos baratos e de baixa qualidade. Paralelamente, o Brasil continua sendo um forte exportador de commodities para a China. Aparentemente há um enorme potencial comercial entre os dois países, mas permanecem os conflitos. O que deverá predominar: os interesses comerciais ou os conflitos?

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Action Learning @ Sloan: India Lab

Another favorite class at sloan has been China and India Lab. The accompanying course (15.225 - Economy and Business in China and India) taught by Yasheng Huang is pretty amazing and offers a good contrast between the way China and India have grown. The best part is however the action learning component which allows students to work with companies in these places. One of the projects I really like was done by a group of friends (Birju, Jessica, Nick and Tiago) in India for a company called Akshay Patra. 

-Ankit