What has been most responsible for the difference in economic performance over the last 30 years...

What has been most responsible for the difference in economic performance over the last 30 years among China, India, and Russia/Soviet Union? Did foreign investors favor one BRIC over another, and if so, why do you believe they did so?

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Expert Solution

India , china and Russia owe the difference in economic performance to the type of economic planing each country implement. In India we have decentralized and mixed economy in which private sector and public sector works together. In china we have centralized planing under which state has complete control over factor of production . Similarly Russia a communist country have centralized planing under which state owns all factor of production.

Economic performance depends upon institutions in country, technological know how, stock of capital , savings and investment etc. In India institutions which overlooks the functioning of various goverment agencies are not functioning properly and thus they are marked by what is known as Hindu rate of growth ( i.e 5 -7?) growth rate . In china and Running these institutions are well defined and thus level of corruption doesn't impede economic growth.

Technological know how of china and Russia is very high in comparison to India and thus china and Russia have higher growth rate.

Savings and investment of Russia and china is very high due to huge exports over imports and thus they have higher investment rate which reflect in their growth rate.

BRICS nation are emerging economies where aggregate demand has been high and is rising in comparison to the developed countries. Also BRICS countries have cheap labour which gives industries an cost advantage and thus gain in competitiveness.

Rahul Sunny answered 1 year ago

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