In this book, Pranab Bardhan assesses the economic rise of China and India over the past quarter century, all in 170 pages. He makes his job more manageable by wisely leaving out of the story the two countries' impact on the global economy. Awakening Giants does not break new ground, but instead relies on existing literature to offer a broad-brush interpretation of the comparative political economy of the two countries in a style accessible to a general readership. In addition, the author, a leading figure in the development field, promises to demolish popular myths about the economic achievements of the two countries.

Chapter 1, “The Myths Floating around the Giants,” starts by setting out the simple generalizations that, according to the author, have become conventional wisdom but are in fact myths. These include (pp. 4, 5): 1) “Many decades of socialist controls and regulations stifled enterprise in both countries and led them to a dead end;” 2) “Their recent market reforms and global integration have finally unleashed their entrepreneurial energies … and brought about high economic growth in both countries, which in turn led to large decline in their massive poverty;” 3) “China's better performance than India's suggests that authoritarianism may be more conducive to development at early stages;” and 4) “The prospering middle classes will, slowly but surely, demand more democratic rights and usher in democratic progress in China, as they have in South Korea and Taiwan.”

It is not obvious that (4) is conventional wisdom so much as an abiding hope on the part of hundreds of millions of people inside and outside of China. It is also questionable whether (3) is conventional wisdom, since there is still much debate about the relative merits of authoritarianism versus democracy for development. Generalizations (1) and (2) do, however, fairly reflect conventional wisdom. There is, of course, a reason why conventional wisdom is conventional, and so demolishing it is no mean feat. Bardhan, in my opinion, does not come close.

Consider first the proposition that socialist controls and regulations led China and India to a dead end. It is not enough that there may have been some redeeming aspect to the socialist era; to make this proposition a myth, it is necessary that the positive consequences of socialism as practiced in the prereform period outweighed the negative. Bardhan argues that the early socialist period in China provided a good launching pad for subsequent (post-1978) growth by providing broad-based education and health care for workers, facilitating growth of agro processing and rural industrialization, providing a minimum rural safety net, and creating production brigades that evolved into highly successful township and village enterprises (TVEs) when the reforms began. Even if this were true, and even if one were willing to ignore, as Bardhan is, the devastating human toll of the Great Leap Forward and the Great Proletarian Cultural Revolution, it would come nowhere close to outweighing the fact that in 1978, per capita income in China was about $500 (2005 PPP dollars), 40% lower than in India at the time and as low or lower than the poorest developing country in the world today. China's rapid growth since 1978 is, in one sense, a legacy of the Mao era—if Mao Zedong had not left the economy in complete ruin, with about 90% of the population in abject poverty, the country would never have been able to grow as fast as it did when Deng Xiaoping subsequently began to introduce market-oriented reforms in 1978.

Is it a myth that recent market reforms and global integration have brought about high economic growth in both countries? If it were, there would have to be some explanation given as to why, according to a vast literature, market reforms and global integration have been instrumental in other successful developing countries, but not in India and China. Bardhan does not dispute that global integration has been important in China or India, but he diminishes their role by arguing that “contrary to the popular notion, China's growth has not been primarily export driven” (p. 5). Of course it has not been export driven! Long-run growth is not demand driven (domestic or external) anywhere; it is driven by capital accumulation and technological change, the latter largely disguised as the former, and in developing countries acquired from advanced countries through imports of capital goods, foreign direct investment, and other channels through which knowledge flows across boarders. This is not to deny that internal factors (institutional changes and public investment in health, education, and infrastructure) also played an important role, but one does not negate the importance of the other.

While the book fails, in my view, to demolish conventional wisdom, it succeeds in other areas. It presents interesting and perceptive insights on a wide array of issues that often do not get the attention they deserve. Chapter 2 (on reform and growth) offers an explanation as to why export-oriented industrialization did not play the role in India that it did in China and other developing countries in Asia. Chapter 3 (on agriculture) explains why land distribution in China is more egalitarian than in India and how this allowed China to achieve increases in productivity that eluded India. Chapter 4 (on infrastructure) discusses the glaring differences in quantity and quality of infrastructure in China and India, which the author attributes not just to greater spending in China but also to differences in the institutional-political environment in the two countries. Chapter 5 (on the financial system) identifies the one sector in which India is more advanced than China. Chapter 6 (on the nature of capitalism) attempts to define the role of the private and public sectors in the two countries, but does not entirely succeed because in both countries the dividing line between the two sectors is blurry. Chapter 7 (on poverty and inequality) argues that poverty reduction in China was greater than in India not only because China has grown faster over a longer period but also because the “growth elasticity of poverty reduction” in India is lower due to higher inequality. Chapter 8 (on the social sector) argues (unconvincingly, in my view) that social indicators in China are higher than in India because of China's successful social policy during the Mao era. Chapter 9 (on the environment) notes that growth aspirations in both countries are being tempered by increasing concerns about the environment, but in India the environmental movement is more active. The last chapter (10) looks “through the lens of political economy” at the future. In this chapter, Bardhan presents his interesting perspective on the authoritarianism versus democracy debate.

Awakening Giants presents the author's perspective on the rise of India and China. It does it succinctly and in lively and engaging style. Bardhan's perspective is not one that everyone will share, but that is itself a compelling reason for recommending the book.