Towards a Worldwide Index of Human Freedom

Liberty in Comparative Perspective: China, India, and the West • 215
In 1990, 49 percent of central government positions were set aside for
these groups (van Praagh, 2003: 201). According to Peerenboom “violations
of physical integrity rights in India appear to be more severe” (2007:
166) than in China—quite in contrast to what one might expect concerning
the differential human rights performance of democracies and autocracies.
Unfortunately, the application of the law in India leaves much to
be desired. Relations between some politicians and criminals are simply
too good (Cohen, 2001: 115). Even in big cities, property conflicts may
still be “settled” by gangs of bullies rather than by courts of law (Kakar,
1996). In 2006, 27 million legal cases waited for a judgment, murder cases
included. About US$75 billion was tied up in these legal disputes (Luce,
2006: 94-95). Problems of law enforcement also reduce the impact of
this presumed Indian advantage. Bardhan bemoans that “India’s overpoliticized
administration and decision-making process, its clogged courts
and corrupt police and patronage politics frequently make mockery of
the rule of law for common people” (2010: 159).
Since Indian states are on the way to becoming more assertive, enterprising,
and powerful, it is conceivable that they may also become engaged
in a “race to the top,” where they will compete with each other in providing
a good business environment. “Federalism, Indian-style” may provide
some hope for the future. As Bihar, one of the bigger and poorer states
of India, has recently demonstrated, catch-up growth of poorer regions
is possible (Economist, 2010, January 30). So far, however, India benefits
little from its putative advantage in the rule of law, but it still suffers from
the legacy of ‘license-permit raj’ (FICCI, 1999: 165). According to the
Economist, “Indian bureaucracy continues to slow things down... it takes
89 days to receive all the permits needed to start a business in India, compared
with 41 in China. Insolvency procedures take ten years, compared
with 2.4 in China” (2005, March 5: 14). Tardiness of administration and
endemic corruption undermine the advantages of the rule of law (Quah,
2008). As Palmer reminds us: “There is also a strong connection between
the scourge of governmental corruption and the extent of governmental
intervention into the market. The more obstacles the state places in the
way of willing buyers and sellers, for example, the more opportunities for
bureaucrats to exact a toll”27 (2009: 213). On the legal system and property
rights part of the economic freedom scale, China received a somewhat
better rating than India (for 2008) (Gwartney, Hall, and Lawson, 2010: 9).
Both Asian giants face severe problems and vulnerabilities, albeit not
exactly the same ones. Chinese savings and investment ratios are very
high. Whereas Chinese profits are rising, wages and private consumption
27 For econometric evidence on economic freedom, corruption, and economic performance,
see Graeff and Mehlkop (2003) and Blasius and Graeff (2009).
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