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Even Nobel laureates stumble. Daron Acemoglu, Simon Johnson and James A. Robinson, winners of the 2024 Nobel Prize in economics, argue that nations with extractive and non-inclusive institutions – where elites monopolise power – are doomed to stagnation. Democracies, by contrast, are cast as economically superior. It is a tidy theory, elegant in design. But it falters in the face of China.
To square the circle, the trio invoke “critical junctures”. China’s post-Mao reforms under Deng Xiaoping, they argue, unleashed growth despite extractive institutions. Poor countries can grow quickly for a while, they add, until the contradictions of authoritarian rule catch up.
And if China’s rise seems exceptional? Perhaps it may be attributed to historical luck. But “luck” is not analysis. It is an evasion.
Whether framed as unsustainable or dismissed as a historical accident, such arguments sidestep the deeper question: why has China’s authoritarian system sustained growth for four decades while others have failed?
Why do poor nations with equally extractive systems fail to replicate China’s trajectory? What explains four decades of sustained expansion, global integration and technological ascent? A lottery ticket cannot suffice as explanation.
The deeper lesson is this: the dichotomy between “inclusive” and “extractive” institutions obscures more than it reveals. China’s story is not about defying economics but about expanding its vocabulary. What matters is not institutional purity but adaptive state capacity – the ability of a system to selectively liberalise without ceding control, to embrace global markets while maintaining domestic authority, to bend rules when necessary while preserving political order.
This pragmatic hybridity defies conventional categories. China is neither the cautionary failure predicted by institutional theory nor the liberal democratic triumph it prescribes. It is something else entirely: an evolving political economy where authoritarian discipline coexists with market dynamism, where state power does not merely suppress but also enables transformation.
For economists, this is uncomfortable. It suggests growth does not arise from universal formulas but from context-specific strategies. For policymakers, it is a warning: do not mistake institutional labels for destiny. For the rest of us, it is a reminder that theories, however elegant, should serve reality – not the other way around.
Economics, like history, is messy. And China’s rise is not an anomaly to be dismissed, but a blind spot that forces us to rethink what we thought we knew about power, prosperity and progress.
Budi Kristanto, Yogyakarta, Indonesia
China, India and Russia need a ‘corridor of comrades’
A comprehensive transit corridor through China for all goods and services between Russia and India would forge a new economic axis, potentially generating trillions of US dollars over 50 years. This “corridor of comrades” would create a deeply integrated economic bloc, fundamentally altering the Eurasian geopolitical and economic landscape. However, this scenario hinges on unprecedented trilateral cooperation, especially between historical rivals India and China.
For China, the benefits would be immense. Evolving into the central hub of this new trade network, China could gain vast revenues from transit fees and logistics services by leveraging its Belt and Road Initiative infrastructure. The corridor is also likely to stimulate development in China’s inland provinces and solidify its geopolitical dominance in Asia by making it indispensable to India-Russia trade.
For Russia, the corridor would deepen its “pivot to Asia”, gaining secure and efficient access to the Indian market for goods beyond energy, such as agricultural products, metals and machinery. A land route through China would be significantly faster than current sea routes, boosting the competitiveness of Russian goods. With bilateral trade targets already rising, the cumulative the value of this enhanced trade could provide provide a massive boost to the Russian economy.
India would secure a vital supply of Russian energy and raw materials while opening a vast new market for its own exports, including pharmaceuticals, machinery and textiles. This would help balance its trade deficit with Russia and stimulate its “Make in India” initiative through reduced logistics costs. The total economic benefit for India, from import savings and increased exports, could be massive.
This vision requires overcoming significant geopolitical obstacles, notably the deep-seated mistrust between India and China. It would also challenge Western-led global trade routes. Still, the sheer scale of the economic incentives provides a powerful driver for these nations to create a new centre of global economic gravity.
Dilip Saha, Tokyo, Japan