Yasheng Huang: Does democracy stifle economic growth?

     Asian countries are striving to economically develop right now. However, huge gap exists between Asian countries. Some countries achieved great economic growth, while others are suffering from economic depression. When we discuss the case of success and failure in Asia, we commonly compare China and India. These countries have similar population and territory, but produced very different result right now. In this Ted lecture, Yasheng Huang , MIT and Fudan University professor, is comparing China and India in a neutral way to question whether democracy hinder or promote economic growth.

 His main points in this lecture can be summarized into four points. First, infrastructure is not a cause of economic growth, but rather the result of it. Second, he refuted the belief that democracy is bad for economic growth. Third, as he directly mentions during the lecture, “The advantage the country (China) had was human capital -- nothing else but human capital”, he asserts that the reason why China achieved dramatic economic success compare to India is mainly human capital.  Finally, he claims that political reforms are pivotal factors to economic growth and extols the possibility of Indian economy. Although I mainly agreed to conclusions he reached, I disagree with some of his major points.

     First, human resources were not the only advantage that China had over India. The Lecturer is belittling other important factors. For instance, implicit causes like average economic level of countries around China and India might have influenced the result. China’s location was close to East Asian countries that had already gained economic development around 1980s.  

     Furthermore, the point that authoritative regime was no benefit at all to the economy is dubious. The lecturer gives example of failure cases like North Korea, Taiwan, Burma and saying that success cases like South Korea, is selecting on a dependent variable, to make an analogy, it’s like asking all the winners of lotteries, "Have you won the lottery?" And they all tell you, "Yes, we have won the lottery." However, when the economic situation of a certain country is seriously poor, an effective government should somehow organize economic activities for the country. I think it can actually ameliorate   The cause of cases like North Korea, Taiwan, and Burma are inadvertent and reprehensible government.

     Although I repudiated some of his points, I was amazed and agreed with the profound conclusions he made. He argues that economic growth comes with democracy. He argued that although China was able to gain economic success under an authoritative regime, economic success was possible because China has moved towards democracy and he believes that the political reforms are a must for China to maintain its growth. He apprehended that China will face some substantial challenges, because they have not moved further and faster on political reforms. Same story can be applied to India. India’s economic achievement was possible because India has been heading towards the direction of democracy.

      After watching this lecture, current situation of Korea popped up into my mind. Although Korea has achieved democracy through many revolutions, there are many remains of the authoritative regime which is deterring political reformations. Korea will face substantial challenges like China with the economic development, if Korean government stops political reformation. Already some symptoms are shown like lower economic growth rate. For Korea to further advance in economy and preclude such challenges, what is need right now are not more factories, or capital but political reforms that can lead the country to the direction of democracy.