Answer by Balaji Viswanathan:
It is quite a tempting idea – a lot of us harbor romanticism for "benevolent dictators". We often misattribute the successes of strong leaders in democracies – such as Lee Kwan Yew, who rose up in a democratic process, as a dictatorship. Rather it is decisive leadership that can very well work in democracies.
It is part of an official propaganda that misuses India's slow economic growth for the continued legitimacy of the Chinese Communist Party. The underlying notion is that democracy is somehow not suited to developing countries in Asia.
There are many problems with this idea:
- Democracy does work in India. In terms of political and legal indices, India is fairly stable. Democracy is about maintaining stability and keeping the political entity intact. India does quite well in that. What is wrong with India is its economic policies and the resulting economic growth. India's curse was that in its first few decades, it didn't have a lot of leaders who trusted capitalism.
- Ironically, the one leader who really understood capitalism (Sardar Patel) should have been democratically elected as the first Prime Minister of India. Due to Mahatma's "benevolent dictatorship", Patel had to back down and Nehru came up. It helped India in stability and integration, but screwed in economic policies. Thus, when I hear people complain about India's democracy as a cause for its poor growth, I don't know to laugh or cry.
- India did much worse when democracy was suspended under Indira Gandhi. Mid 1970s was among the worst eras with hardly any jobs and economic growth. During her father's (Nehru) period, India was somewhat a weak-democracy as it was a practically an one-party rule. India's growth once again was anemic. In contrast, since 1990s, India has had a more diverse democracy with no single leader dominating. Under tough coalitions & the need to placate multiple regional leaders, Prime Ministers like Narasimha Rao and Vajpayee brought India's best growth.
- In the same way, China did much worse in the least democratic leader it had – Mao. On the other hand, Deng and his successors were relatively less autocratic than Mao and have had better successes. Probably with more democratic reforms, China can escape the middle income trap.
- It is often better to compare nations of similar history and geography. When you compare India with its South Asian peers – Pakistan or Myanmar, with whom it shared a long history and was practically level in 1947, India comes out better. On the other hand, if you compare China against its democratic peers in East Asia, it comes out worse.
In summary, it is not because of democracy, India is poor. Rather, democracy is the one saving grace that keeps India alive and intact. What India missed in the past was good economic policies. We have fixed some of the economic policy stupidities since 1991 and fixing a few more starting this year. Those changes have already started to show positive effects.
Economies live and die by policies. Weak policies create weak economies – regardless of whether it is a democracy or not.