“Rule of law” is the foundation of economic growth – tells from two authors

Tags

,


It has been a long time since I wrote my last blog. I won’t give excuse that I was busy or nothing interesting was happening. I started this year 2014 with a resolution of reading minimum one good book every month. I already have a long reading list of interesting topics to cover. Hopefully back to the reading will bring back to the blogging world.

I finished two very interesting books in first couple of months “India Grows At Night..” by Gurucharan Das and “The Birth of Plenty” by William Bernstein. Both of the books described a framework that contribute to a nation’s economic success and what makes a successful nation with a struggling nation.Gurucharan covered in hi book about the India’s current environment and what is blocking India to achieve rapid growth. He also shared number of his own stories and experiences from his long career in India. Bernstein is an economist author, I also love his beautiful style of describing the four factor model with centuries old human history. This book describes how evolution of  four factors (Property rights, scientific rationalism, capital, transport and communication) transitioned nations and today differentiate between developed and developing nations in the world.

Interestingly one key message resonate in both books is that the basic ingredient for nation’s success is strong institutional structure and rule of law. Without fixing the strong institution and rule of law all other infrastructure or technological improvements cannot make real impact. Nation cannot create an environment where citizens can work freely and motivated to achieve big goals. Without this key ingredient resources will be wasted and capitalism will have the risk of becoming a crony capitalism.  I am convinced with Gurudas’s argument that India has a strong society and going forward it will build the strong governance with nice distribution of power. Transformations are already visible in the society, only question that is not yet clear is the pace of change, only time will tell how fast these changes can happen and transform the country like India.

Follow

Get every new post delivered to your Inbox.

Join 489 other followers