A League of Their Own

Foreign-policy heavyweights on both the left and the right are calling for a new League of Democracies. One day, they say, it could replace the United Nations. But such a plan rests on the false assumption that democracies inherently work well together -- or that anyone besides the United States thinks it's a good idea.

New ideas are rare in international politics. The actions of countries on the world stage often seem like endless replays of ancient laws on power and conflict that are impervious to fresh insights and initiatives. And nowhere is the lack of new thinking more acute than in the realm of international institutions, where a set of multilateral organizations established in the wake of World War II still dominates. Today, however, a big new idea for a new international institution has bubbled to the surface. It is the idea that the next U.S. president should seek to establish a "League of Democracies" (or "Concert of Democracies," as it is sometimes called). The league would be a free-standing organization separate from -- and perhaps one day even replacing -- the United Nations.

The idea is being trumpeted by a bipartisan collection of U.S. foreign-policy experts, which is surprising given the polarization of the political climate in advance of November’s presidential election. Moderate Democrats set out the idea first. In 2006, scholars G. John Ikenberry and Anne-Marie Slaughter featured it in the widely publicized final report of the Princeton Project on National Security. Ivo Daalder and James Lindsay developed it further in an article titled "Democracies of the World, Unite." Then, the Republicans joined the choir. Scholar Robert Kagan called for the establishment of a league in response to what he warns is a growing authoritarian challenge from China and Russia. Neoconservative columnist Charles Krauthammer concurred. And Republican presidential candidate Sen. John McCain has advanced the idea as a linchpin of his foreign-policy platform, giving it prominence in national debates.

Thinking about what the league should actually do keeps broadening. Ikenberry and Slaughter envision a reliable means of gaining international approval for American interventions abroad. McCain and other conservatives have something more expansive in mind. According to McCain, a league would be a "global compact" that would "harness the vast influence of the more than 100 democratic nations around the world to advance our values and defend our shared interests." A league would "revive the democratic solidarity that united the West during the Cold War." In this view, a league would not only take responsibility for global peace and security but it would also bring pressure to bear on autocratic regimes, impose sanctions on Iran, relieve suffering in Darfur, and tackle crises such as HIV/AIDS and global warming.

The calls for the establishment of a League of Democracies are rooted in a useful recognition that the United States in recent years has operated too much on its own in the world. They proceed from a reasonable assertion that rebuilding the legitimacy of U.S. leadership will require a renewed commitment to international cooperation. No doubt much of the world is probably yearning for such a tack in U.S. foreign policy. Sadly, however, though a League of Democracies looks like a new idea, it is not. It embodies the same instincts that lie behind the made-to-order multilateralism that the world has grown so tired of under President George W. Bush. This includes a desire for American control over the group's membership, a lack of interest in the actual views of others, and an insistence on projecting U.S.-centric ideas onto countries that are increasingly less willing to follow America’s lead. A League of Democracies, as its backers envision it, is not what the world has in mind when it dreams of a new era of international cooperation.


The notion of a League of Democracies will likely first fall victim to a familiar American preference: the desire to control an organization's membership to ensure a friendly crowd. The United States would undoubtedly seek to maintain a firm hand over decisions about what countries are invited to join the league. In truth, if most or all democracies were invited to join, and decided to accept, the league would end up with many members not inclined to support U.S. interests. Whereas in the 1990s most new democracies were generally sympathetic to the basic outlines of U.S. foreign policy, in recent years that has changed. In this decade, America's global posture has become more controversial and an increasing number of democratic governments are skeptical of the United States generally. For example, in the past several years, free and fair elections in Argentina, Bolivia, Ecuador, Lebanon, Nepal, Nicaragua, Palestine, and Pakistan have brought to power governments, or empowered important political actors, that are noticeably cool toward the United States. Faced with this reality, the United States would likely seek to limit membership to countries that supported key U.S. political and economic interests, keeping out countries that are democratic but led by politicians who are prone to America-bashing, such as Nicaragua under Daniel Ortega or Ecuador under Rafael Correa. Yet, by accepting some democracies while barring others, Washington would taint the core idea of the league, reducing it from a group defined by a shared political principle to an association of America's favored friends.

Nor do calls for a League of Democracies appear to be born out of any genuine effort to canvass policymakers in other countries to find out if the idea interests them at all. The muted response coming from fellow democracies in reply to U.S. pronouncements about the need for a league is notable. When Kagan wanted to point to the support the league garners in Europe, the most he could muster was one conservative Danish politician. This lack of apparent consultation in the formulation of the idea helps explain its remarkable tone-deafness to the current international mood, particularly with regard to democracy and democracy promotion. Thanks in large part to President Bush's insistent characterization of the war in Iraq as the centerpiece of his "global freedom agenda," people the world over now see democracy promotion as a dishonest, dangerous cover for the projection of U.S. power and influence. Given this, trying to bridge the gap between the United States and the world by proposing yet another U.S-led, democracy-focused global initiative reflects an almost willful obliviousness to how such an idea would be perceived and received outside the United States.

In fact, the entire approach appears to be based on ideas drawn from the U.S. experience and then projected hopefully onto the world. Plans for a league rest on a wishful belief that democracies, by virtue of being democracies, share interests to such a degree that they will be able to act in unison on a wide range of global challenges. It is an attractive idea that is at least partially true. The common bond of democracy can contribute to countries getting along better and working more closely together. The effort to create a Common Foreign and Security Policy in Europe, for example, rests in part on the common democratic bond among European Union states. NATO's democratic standard for membership is an integral part of the alliance’s shared international security outlook.

Yet the idea that democracies naturally align is only half right and risks being a dangerous oversimplification. The foreign policies of democracies, like those of all states, are not primarily determined by a country’s domestic political orientation. Other factors are often more influential, including regional identity, religious orientation, ethnic makeup, economic profile, and historical legacies. Even in Europe, enough differences exist to make acting in unison on foreign-policy questions an elusive task. The same is true within NATO, where the United States has recently found itself opposed by some of the largest members on a core issue, whether to seek NATO membership for Georgia and Ukraine.

And when it comes to including such diverse democracies as Brazil, India, Indonesia, Mexico, Mongolia, and South Africa, the prospect that the United States would find in such a league a forum ready to toe the U.S. line on a host of security, economic, and political issues is dim. As former British ambassador to the United Nations David Hannay recently pointed out, the U.N. voting records of Brazil, India, and South Africa -- among the most successful democracies in the developing world -- reveal that "they are among the most anti-interventionist of all U.N. members and the most hesitant about authorizing the use of force." To take just one example, McCain believes strongly in the past, present, and future validity of U.S. military operations in Iraq. Would he be willing, as he says, to "respect the will" of the league concerning the future of that intervention, when many of the members would almost certainly dispute the validity of a continued U.S. presence in Iraq?

The idea that a country's foreign policy is primarily determined by its domestic political orientation is a projection of an idea about the United States that some Americans favor -- that the U.S. role in the world is defined by the effort to spread democracy. This idea is itself in good part myth, a fact that further undercuts the rationale for a league. Promoting democracy is one goal of U.S. foreign policy dating back at least 100 years. But it has always been one objective among many, often outweighed and negated by other competing interests. Even under President Bush, who appeared ready to push democracy in the world as never before, the United States has continued to follow a largely realist framework in which economic and security interests cause Washington to de-emphasize democracy in its relations with most other governments.


Perhaps the most dangerous thing about the concept of a League of Democracies is that it threatens to circumvent and even undermine real efforts at international cooperation. Implicit in the idea of a league is the notion that such an institution could fulfill some of the key functions of the United Nations, possibly even replacing it over time. In fact, the idea of a league was conceived in part out of frustration with the inability of the United States to obtain U.N. approval for the Iraq intervention, as well as concern that further interventions would bring the United States into deeper clashes at the international body. Attempting to push for meaningful U.N. reform, such as an expansion of the Security Council and a change in its decision-making rules, is apparently too time-consuming and uncertain an endeavor for many in the United States. Similarly, tailoring U.S. policy to fit existing international norms rather than tailoring international institutions to fit U.S. needs apparently just does not appeal.

The desire to use a league to get around the United Nations takes both gentle and less gentle forms. Ikenberry and Slaughter argue for a somewhat limited-use league that would focus on global peace and security, leaving the United Nations to continue its work in other areas such as education, development, and health. They envisage a harmonious coexistence between the league and the United Nations. Other proponents, such as McCain, seem to hope that the league could eventually sink the United Nations, taking over all its tasks -- economic, security, political, and humanitarian. Krauthammer did not put too fine a point on it in a recent interview: "What I like about it, it's got a hidden agenda. It looks as if it's all about listening and joining with allies, all the kind of stuff you'd hear a John Kerry say, except that the idea here, which McCain can’t say, but I can, is to essentially kill the U.N."

People in many countries share American frustration with the United Nations' weak performance. They too are pessimistic about the prospects for meaningful U.N. reform. But few are likely to embrace an initiative whose implicit purpose is to weaken and eventually upend the United Nations, only to replace it with a less universal body. For a great many countries, the United Nations' resistance to the U.S. intervention in Iraq was a high-water mark in the institution's history, especially in view of the disastrous consequences of the intervention. It is precisely the United Nations' universality -- which the league would undo -- that is so highly valued in many countries, unwieldy though it may be.

A League of Democracies is unlikely to come to pass, even if the next U.S. president is a strong proponent of the concept. The United States can go a certain distance by pushing others toward the idea, but the foot-dragging by fellow democracies is likely to be considerable. A massive effort was extended to get the little-known Community of Democracies started in 2000, and that was at a time when America’s global reputation was strong. It was also in pursuit of a much less ambitious institution, one that only concerns itself with democracy promotion. Yet even it has failed to gain much momentum, producing eye-rolling and halfhearted commitments from allies in Europe and elsewhere.

New ideas are certainly needed in U.S. foreign policy. Not only is the U.S. position in the world badly hurting, but global challenges—whether climate change, food prices, energy, or global health—are only multiplying. A global yearning for fresh thinking from Washington is palpable. The calls for a League of Democracies are undoubtedly well intentioned, but they remain tethered to American preferences and habits that few want, or even appreciate.


The Next Asian Miracle

Democracies are peaceful, representative -- and terrible at boosting an economy. Or at least that’s the conventional wisdom in Asia, where for years growth in India's sprawling democracy has been humbled by China's efficient, state-led boom. But India’s newfound economic success flips that notion on its head. Could it be that democracy is good for growth after all? If so, China better watch its back.

Consider the experiences of the following two Asian countries. In 1990, Country A had a per capita GDP of $317; Country B's stood at $461. By 2006, Country A, though 31 percent poorer than Country B only 16 years earlier, had caught up: It enjoyed a per capita GDP of $634, compared with Country B's $635. So, if you had to guess, which of these two Asian countries would you assume is a democracy?

You might be tempted to conclude that the better-performing country is authoritarian China and the laggard is democratic India. In reality, the faster-growing country is India, and the laggard is the occasionally autocratic Pakistan. This fact certainly belies the commonly held notion that -- especially among Asian countries -- authoritarian states have an advantage in growing an economy compared with their democratic counterparts, who are forced to reckon with such pesky trappings as labor standards and political compromises.

But surely, the familiar China-India comparison would support an authoritarian edge, right? The conclusion seems so obvious: China is authoritarian, and it has grown faster; India is democratic, and it has grown more slowly. For years, Indians have defended their democracy with a sheepish apology -- "Yes, our growth rate is terrible, but low growth rates are an acceptable price to pay to govern a democracy as large and as diverse as India."

There is no need to apologize now. India has ended the infamous 2 to 3 percent annual "Hindu rate" of growth and begun its own economic takeoff. Recent Indian success is not only impressive in terms of its speed -- growing at the "East Asian rate" of 8 to 9 percent a year -- but also in terms of its depth and breadth. The Indian miracle is no longer confined to the much vaunted information-technology sector; its manufacturing is taking off. Even the historically lackluster agricultural sector is beginning to grow.

So where does this leave the "authoritarian edge" that China’s economy has supposedly enjoyed for years? The emerging Indian miracle should debunk -- hopefully permanently -- the entirely specious notion that democracy is bad for growth. And the emerging Indian miracle holds substantial implications for China's political future. As Chinese political elites mark the 30th anniversary of economic reforms this year, they should reflect on the Indian experience deeply and absorb the real reason behind their own miracle.

The idea that there is a trade-off between economics and politics is ingrained in the minds of many policymakers and business executives in Asia, as well as the West. But that idea has never been systematically proven. If India, with its noisy, chaotic, and lumbering political arrangements, can grow, then no other poor country must face a Faustian choice between growth and democracy. A deeper look at the two countries shows that they have succeeded and failed at different times for remarkably similar reasons. Their economies performed when their politics turned liberal; their performances faltered when their politics slid backward. Now, as many poor countries grapple with similar political and economic choices, we must understand this dynamic. It is high time to get the China-India story right.


That story doesn't begin in 2008. It's a horse race that goes back decades, and one that tells us much about the relationship between democracy and growth, governance and prosperity. From an economic perspective, it is not the static state of a political system that matters, but how it has evolved. The growth India enjoys today sped up in the 1990s as the country privatized TV stations, introduced political decentralization, and improved governance. And contrary to the conventional wisdom, India stagnated historically not because it was a democracy, but because, in the 1970s and 1980s, it was less democratic than it appeared. To understand just what is happening in India's economy today -- and how it relates to the country’s political system -- we must travel as far back as the 1950s.

Many scholars blame India’s first prime minister, Jawaharlal Nehru, for adopting a development strategy that caused India to stagnate from 1950 to 1990. But this view is unfair to Nehru, and it shifts the blame from the real culprit -- Indira Gandhi, Nehru's daughter and prime minister during much of the period from 1966 to 1984. Nehru's commanding-heights approach was the reigning ideology in many developing countries, some of which, like South Korea, were quite successful. The issue is not how harmful Nehru's economic policies were, but why India intensified and persisted in this model when it was clearly not working. To answer this question we have to understand the lasting damage that Indira Gandhi inflicted on Indian democracy.

Patronage became her electoral strategy as she undermined a vital institution in a functioning democracy -- the party system. Gandhi weakened the Congress Party, once a proud catalyst of the independence movement, by sidestepping many of its well-established procedures, reducing its grass-roots reach in the states, and appointing party officials rather than allowing rank-and-file members to elect them. The shriveling of the Congress Party meant that Gandhi had to use other means to get reelected: crushing political opposition, pandering to special interests, or offering political handouts.

Or cancellations of elections altogether. Indira Gandhi imposed emergency rule in June 1975 and cancelled the general election scheduled for the following year. It was no isolated event. As early as 1970, she postponed or cancelled Congress Party elections. In addition, she moved very far to replace federalism with her own centralized rule. One telling statistic, as shown by political scientists Amal Ray and John Kincaid, is that between 1966 and 1976 the Gandhi government invoked Article 356 of the constitution -- which empowers the federal government to take over the functions of state governments in emergency situations -- 36 times. The government of Nehru and his successor (1950–65) resorted to this measure only nine times. From 1980 to 1984, she invoked this power an additional 13 times. The misuse of the extraordinary power vested in the executive damaged an important institution of Indian democracy.

The cumulative effect of Gandhi's actions is that the Indian political system, though still retaining some essential features of a democracy, became unaccountable, corrupt, and unhinged from the normal bench marks voters use to assess their leaders. In a functioning democracy, voters punish those politicians who fail to deliver at the ballot box. Not in India. Both the 1967 and 1971 reelections of the Congress Party followed a decline of per capita GDP the year before. It was not democracy that failed India; it was India that failed democracy.

The economic consequences of this period of illiberalism were long lasting. Because Gandhi's political fortunes depended on patronage, she felt no compulsion to invest in real drivers of economic growth -- education and health. The ratio of teachers to primary-school students throughout the long Gandhi years stubbornly hovered around 2 percent. After her rule, in 1985, only 18 percent of Indian children were immunized against diphtheria, pertussis, and tetanus (DPT), and only 1 percent were immunized against measles. Even today, India is still paying for her neglect. The low level of human capital remains the single largest obstacle to that country's developmental prospects.

The good news is that India is shedding this harmful legacy. As Indian politics became more open and accountable, the post-Gandhi governments began to put welfare of the people at the top of the policy agenda. For example, the adult literacy rate increased from 49 percent in 1990 to 61 percent in 2006. In due time, these social investments will translate into real dividends.


The story of China's rise seems, on the surface, quite different. A communist and closed regime undertakes an efficient, massive, and rapid embrace of the global economy -- and sends its country into overdrive. It appears to be a far cry from the common understanding that democracy promotes growth because it imposes constraints on rulers and reassures private entrepreneurs of the safety of their assets and fruits of their labor. The idea that China grew because of its one-party rule stems from a mistaken focus on a single snapshot in time at the expense of an understanding of shifting trends. China did not take off because it was authoritarian. Rather, it took off because the liberal political reforms of the 1980s made the country less authoritarian. Like India, when China reversed its political reforms and saw governance worsen in the 1990s, citizens' well-being declined. Household income growth slowed, especially in the rural areas; inequality rose to an alarming level; and the gains of economic growth accruing to ordinary people fell sharply. China even underperformed in its traditional areas of strength: education and health. Adult illiteracy rose. Immunizations fell. The country's GDP might have been booming, but it was also hazardous to your health.

The real Chinese miracle began back in the 1980s -- when Chinese politics was most liberal. Personal income growth outpaced GDP growth; the labor share of GDP was rising; and income distribution initially improved. China accomplished far more in poverty reduction in the 1980s without any of the factors (such as foreign direct investment) now viewed as essential elements of the China model. In four short years (1980–84), China lifted more of its rural population out of poverty than in the 15 years from 1990 to 2005 combined. If India became less democratic under Indira Gandhi, China became less authoritarian under the troika rule of Deng Xiaoping, Hu Yaobang, and Zhao Ziyang in the 1980s. Therein lies the key insight into China’s economic takeoff.

One of the first acts by the reformist leaders was to signal an improving environment for private property. In marked contrast to today’s massive land grabs, the Chinese government in 1979 returned confiscated bank deposits, bonds, gold, and private homes to those former "capitalists" the regime had persecuted. The number of people affected by this policy was not large, around 700,000. But symbolism mattered for a country still reeling from the Cultural Revolution. There were also other symbolic acts designed to elicit the confidence of private entrepreneurs in the new political environment of a post-Mao era. In 1979, two vice premiers visited and personally congratulated an entrepreneur who was granted the first license to operate a private restaurant in Beijing. As early as 1981, a Communist Party document signaled a willingness to recruit its members from the private sector, a well-publicized gesture. The widely held view that the party only began to recruit capitalists late in the Jiang Zemin era is simply incorrect.

The reformist leaders also began to embark on meaningful political changes. As scholar Minxin Pei has noted, every single important political reform—such as the mandatory retirement of government officials, the strengthening of the National People's Congress, legal reforms, experiments in rural self-government, and loosening control of civil society groups—was instituted in the 1980s. The Chinese media became freer in the early reform era. The timing here is critical. This "directional liberalism" of China's politics either preceded or accompanied China’s economic growth. It was not a result of economic success.

This liberalism mattered the most for growth in rural China, where the majority of Chinese citizens live. Private access to capital eased in the 1980s. Private entrepreneurship and even some privatization became widespread, especially in poorer parts of the country that needed them most. Of 12 million rural businesses classified as township and village enterprises, 10 million were completely private. The change in direction of China's politics was sufficiently credible to encourage millions of entrepreneurs to go into business for themselves.

But in the 1990s, the Chinese state completely reversed the gradualist political reforms that the leadership began in the 1980s. This assessment comes from a well-placed insider, Wu Min, a professor at the Party School under the Shanxi Provincial Party Committee. In a 2007 article, Wu revealed that the political reform program adopted at the 13th Party Congress in 1987 implemented some substantial changes. The congress abolished the party committees in many government agencies and explicitly delineated the functions of the party and the state. After 1989, there was no progress on the political reform front, especially in reducing and streamlining the power of the Communist Party.

The political reforms of the 1980s were designed to enhance the accountability of the government by creating some checks and balances over the power of the party and by fostering intraparty democracy. Wu cites one specific measure in the 1990s to derail the reforms of the 1980s. According to Wu, in the 1990s China instituted explicit provisions prohibiting the National People's Congress (NPC) from conducting evaluations of officials in the executive branch and the courts. Wu comments, "This is obviously a step backward."

Just how far did this step set back China? How about nearly 30 years? Consider China's track record when it comes to industrial fatalities. In 1979, in the aftermath of the capsizing of an oil rig that resulted in 72 deaths, the NPC held hearings at which officials in the Ministry of Petroleum Industry were called to testify. The minister was determined to have been negligent and was sacked. But since the mid-1990s, there have been hundreds of explosions and industrial accidents in China's coal mines. Thousands of people have lost their lives. No hearings have been held, and not a single official at the rank of minister or provincial governor has ever been held explicitly responsible.

Like Indira Gandhi in the 1970s and 1980s, the Chinese state greatly centralized its economic management in the 1990s. It was another reversal from the promising reforms of a decade earlier, the gist of which was delegating decision-making to those best informed about local situations. In 1994, the central government increased substantially the shares of tax revenues going to the central coffers and abolished one of the most innovative Chinese reforms -- fiscal federalism. A less well-known development in the 1990s was that the Chinese state centralized the budgetary and other functions of villages. So, even though people were voting in village elections, the officials elected exercised very little power.

The economic consequences of these reversals were substantial. The 1990s saw depressed growth in household incomes relative to GDP, which means that the average Chinese person was losing ground. The employee share of GDP -- the income going to the general population -- peaked in 1990, at 53.5 percent. By 2002, it had declined to 45 percent of GDP. At 45 percent, the Chinese economy in 2002 was benefiting its people less than it was in 1978, when its employee share of GDP stood at 48 percent. Similarly threatening for the poorest Chinese is a development that has garnered almost no attention: The country is backsliding on literacy. On April 2, 2007, the state-run China Daily published an article with an unusually frank title, "The ghost of illiteracy returns to haunt the country." It reported that the number of illiterate Chinese adults increased by 30 million between 2000 and 2005. In 2005, there were 115.7 million illiterate Chinese adults, compared with 85 million in 2000. The roots of the problem began in the 1990s. Consider how literacy is defined -- the ability to identify 1,500 Chinese characters by the age of 7 to 9. An adult reaching into the illiterate group by 2005 received all his or her primary education in the mid-1990s. In addition, immunization rates against DPT and measles -- rising throughout the 1980s -- began to decline in the 1990s. In time, China will pay dearly for these colossal failures.

In the 1990s, the nature of China’s growth was fundamentally altered. In the 1980s, growth was broad-based and positive for the poor; since then, the percentage of people benefiting from growth has narrowed, and social performance has deteriorated. The impact of this great reversal is strongest in the silent and less visible rural areas of China.


Of course, understanding the origins of India's and China's separate paths to development is just half the story. What's more telling is how these two countries enacted and reacted to reforms -- and what that says about the relationship between political liberalization and economic growth.

After the Soviet collapse, Chinese political elites converged on the view that China avoided the same fate because China had not reformed its politics. The truth is precisely the opposite. The single most important reason why China survived the 1989 Tiananmen crisis is because its rural population was content. In the 1980s, rural China experienced the most radical economic and political reforms. It was reform that saved the Chinese Communist Party.

Political reforms contributed to Indian growth as well. Take the media. During the long Gandhi era, though the print media were free, the government controlled the TV stations -- a more important source of information for a country with high illiteracy. The privatization of the stations in the 1990s not only enriched the quality of entertainment for the average Indian but also added transparency to Indian politics. Many corruption and bribery scandals were first exposed on TV, the effects of the exposures being magnified by the vivid images of politicians receiving cash in shady hotel rooms. That is the right way to fight corruption.

As China tightened its political grip on rural affairs in the wake of the Soviet collapse, India moved in the opposite direction. In 1992, India amended its constitution to strengthen a reform with long and deep implications -- village self-government. This panchayati raj phenomenon promises to transform an urban-centered, elitist system to one that is Tocquevillian in character and is empowering women along the way. The auxiliary institutions of Indian democracy, so atrophied under Indira Gandhi, have been renewed. World Bank indicators show a notable improvement in key areas of Indian governance during the period of high growth since the mid-1990s.

In fact, India leads China in a number of important areas of reform. Throughout the 1990s, India reduced state controls on the banking sector, allowed the entry of private domestic and foreign banks, and abolished government interference in setting the equity pricing of initial public offerings on the stock exchange. China is nowhere near India in terms of pace and depth of financial reforms.

Would democracy galvanize opposition to reforms? Many progressive reformers in China hold this view, but this is a hypothesis long on fear and short on facts. Consider the following fact about Indian politics: All the reforms have been carried out by a coalition of multiple parties rather than by a single-majority ruling party. This is true of the Congress Party in the early 1990s, the Bharatiya Janata Party between 1998 and 2004, and the Congress Party today.

What about building infrastructure? Even liberals in India sometimes wish for a dose of authoritarianism here. A powerful government in China is able to sidestep all the political and legal complications and build world-class railroads, highways, water systems, and other networks overnight. Surely, authoritarianism has an edge when it comes to public works projects. But no. Building infrastructure has followed -- not preceded -- Chinese growth. In 1988, China had roughly 91 miles of expressway. That did not begin to change until the late 1990s, when the country poured massive resources into infrastructure. Only in the past eight to 10 years could the country claim to have infrastructure rivaling that of developed countries.

Many foreign investors think that infrastructure explains the different pace of growth between China and India. No such evidence exists. In the 1980s, India started with some infrastructural advantages over China. It had a longer system of railways, for example. Although we can debate today which country is performing better, there is no doubt that China outperformed India in the 1980s. It was reforms and social investments that propelled Chinese growth, not fancy airports and skyscrapers.

One justification for building those massive infrastructure networks is to attract FDI. For years, Western economists and business analysts have chided India for not following China's lead in this area. But that criticism puts the cart before the horse. Like infrastructure, FDI follows GDP growth rather than precedes it. In the 1980s, China received very little FDI, and yet the country grew faster and more virtuously than its later growth. FDI is a result of growth, and the first order of the policy business is how to grow the economy -- not how to attract FDI. As long as India can grow in the 8 to 9 percent range, even without superior infrastructure, it can easily triple or even quadruple its FDI inflows from its current level of $7 billion a year. Growth can self-finance the infrastructure truly needed for business and economic development.

China has built critical networks, such as power stations and transportation links, but since the mid-1990s, unconstrained by public voice, media scrutiny, and private land rights, Chinese leaders have wasted massive resources on urban skyscrapers that have no economic benefits. Many of them are government buildings and are extraordinarily expensive, costing more than $100 million in some cases. And the financial costs of these projects do not even begin to approach their opportunity costs -- those investments in education and health China has failed to make. That a country constructed nearly 3,000 skyscrapers in Shanghai and added 30 million illiterate Chinese during the same decade is truly remarkable.

The economic dividends of political reform don't appear overnight, which skews the timeline and confuses the cause. But by using nearly every metric, political liberalization has spurred rather than stunted growth in both China and India.

After a long hiatus, China's leadership has rhetorically returned to a vision of the 1980s -- that political reforms should be a priority. Rural China has begun to recover from the neglect of the 1990s, and rural income has grown the fastest since 1989. All this is good news. But consolidating these achievements will require a more substantial undoing of the illiberal policies of the 1990s. How India managed to emerge from its own long shadow of illiberalism offers some valuable lessons. In the past, China taught India the importance of social investments and economic opening. It is time for today's China to take a page from India -- and from the China of the 1980s -- that political reforms are not antithetical to growth. They are the keys to a healthier and more sustainable foundation for the future.