Local Leaders Transforming Chinese Provinces and Indian States

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In an essay published by the Brookings Institution, William J. Antholis highlights the role of local leadership in China and India in transforming the economic development of the two countries. Antholis and his family traveled through China and India for five months, interviewing local and national political leaders and ordinary citizens, from corporate executives to slum dwellers, asking them about how their Chinese provinces and Indian states function, how local leaders balance national priorities and value systems, and how citizens and leaders view global issues. Antholis explains that local leaders increasingly run much of China and India, and understanding their importance and the way the local units work is key for outsiders to engage effectively with both countries.

China is a country that has emphasized unity above all, with the central government having a tight grip on political and ideological control. The Standing Committee of the Communist Party Politburo sets the political message and strategic national priorities using a top-down approach. However, since the early 1980s China has moved towards decentralizing economic decision-making, with an edict from the central government to produce economic growth and make the country more competitive on a global scale. Coastal states were encouraged to develop first and were given free reign to promote development. By the early 1990s, an estimated 170 million peasants were lifted out of extreme poverty through the economic reforms, and by 2004 more than 400 million were lifted out of poverty. Although the central government has always been concerned with ideological unity, Antholis explains that providing local leaders the power to make their own economic decisions has allowed China’s rapid growth in the past three decades. In other words, decentralization has been the driver of China’s economic success story.

In India, Antholis posits that empowered local leaders have also turned around economic performances of states. India is increasingly being governed from the bottom up, with varying degrees of success. At the country’s inception, the central government used its authority to protect minorities and promote a sense of national identity – a bloody Partition rife with inter-communal violence had just reshaped the subcontinent and over 14 million Hindus and Muslims were forced to relocate between India and Pakistan. The central government instated policies to protect ethnic and religious minorities and improve the status of the lower castes and the rural poor. However, central control proved inefficient for economic growth and resulted in widespread corruption. In the early 1990s, India pursued its own strategy of economic liberalization that brought forth decentralization and the empowering of state and local leaders.

India’s states have each pursued different economic initiatives and have achieved varying levels of economic growth. India’s states are categorized into backward states, forward states and swing states. “Backward” states refer to those with low urbanization, modernity and development. The Indian state of Bihar, with one of the lowest levels of education, grinding poverty, poor infrastructure, ineffective government and a prevalent caste system, has been regarded as one of the most backward states. However, Bihar has had a celebrated leader in Nitish Kumar who has prevented Bihar from becoming a failed state and has defied some of the expectations of a backward state. As chief minister, Nitish Kumar cracked down on lawlessness, improved infrastructure and invested in schools. As a result, Bihar went from being one of the most corrupt states to one of the better governed. Female illiteracy has been reduced by 50 percent and the average Bihari income has doubled. Challenges still remain for Bihar, and for other backward and swing states of India; for example, lack of electricity, infrastructure, banking services and skilled labor drives away investment. In contrast to states like Bihar, stand the forward states of Gujarat, Maharashtra and Tamil Nadu that enjoy higher income per capita, urbanization, commerce and foreign trade. They also have higher literacy rates, better infrastructure and access to healthcare. Their success can be attributed to their coastal locations, making way for increased trade and commerce, but they have also had leaders that have invested in infrastructure and education. Tamil Nadu has one of the highest literacy rates in India and is a hub for the information technology sector. These forward states are a reminder to states such as Bihar what continued effective governance could eventually lead to.

Both China and India have enjoyed economic growth by introducing reforms to decentralize economic decision-making. Empowered local leaders have helped attract foreign investment and improved infrastructure to fuel growth. The continued strengthening of local leaders can help turn around more states like Bihar to achieve their full potential and make the local units and leaders bigger players on the world stage.

You can read the full article here.

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