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• W2102449080 abstract "Why do China and India, two similarly, endowed high-growth economies, differ so distinctively in their development patterns? China has become world’s workshop, whereas India has become the world’s office. I argue that China’s authoritarian regime gives the government the ability to take bold initiatives in radical economic reform, but it creates a credibility problem for the government. India’s democratic regime provides the policy credibility that is essential for private investors, but it limits the government’s capacity to change the inefficient status quo. Moreover, I argue that, at the micro-institutional level where policy is implemented, specific institutional arrangements in fiscal, land, and labor policies have systematic effects on the static comparative advantages. The resulting distortions create dynamic comparative advantages that induce firms to adopt different investment strategies. China’s institutional arrangements produce more political uncertainty, but also greater regulatory flexibility, which is particularly favorable for labor-intensive firms engaging in large-scale export-oriented manufacturing. India’s institutional arrangements yield more political stability, but greater regulatory rigidity, which induces firms to avoid large-scale labor-intensive manufacturing." @default.
• W2102449080 created "2016-06-24" @default.
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• W2102449080 date "2012-05-01" @default.
• W2102449080 modified "2023-09-27" @default.
• W2102449080 title "When World’s Workshop Meets Its Office" @default.
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