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India’s Missing Software

March 21st, 2004 · No Comments

Thomas Friedman writes in his continuing series on India:

While India has the hardware of democracy free elections it still lacks a lot of the software decent, responsive, transparent local government. While China has none of the hardware of democracy, in the form of free elections, its institutions have been better at building infrastructure and services for China’s people and foreign investors.

Few people in India with energy and smarts would think of going into politics. People don’t expect or demand much from their representatives and therefore they are not interested in paying them much in taxes, so most local governments are starved of both revenues and talent.

America’s greatest competitive advantages are the flexibility of its economy and the quality of its infrastructure, rule of law and regulatory institutions. Knowledge workers are mobile and they like to live in nice, stable places. My hope is that the knowledge workers now spearheading India’s economic revolution will feel compelled to spearhead a political revolution.

It has taken a person like Friedman to help us understand ourselves better. The point he makes is very true. And perhaps, there may be a change happening in Indian politics – as the focus starts shifting to developmental issues. If Indians can start electing the right people to power, and they can focus on building the right physicial infrastructure, Indian entrepreneurship can take care of the rest.

Tags: Emerging Markets

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