Democracy with Economic Stagnation, and Democracy with Rapid Growth:Understanding the Indian Enigma

India is a relatively poor country, and for the first 30 years after independence, saw a weak and deteriorating growth performance. Yet India’s democracy remained robust through almost all of this period. Economic growth in developing democracies is ordinarily mediocre. Yet India’s has been much more uneven - for long weak, and then for long strong. What explains these unusual outcomes?We argue that India’s structural diversity - her demographic size and poverty, combined with her complex caste, religious, linguistic, and economic cleavages - allowed the Congress Party to consolidate a dominant ideological and institutional position. This dominant position has only gradually eroded over recent decades. As a result, Congress Party leaders have played a decisive role in creating, preserving, and more briefly, threatening India’s democracy; as well as in taking India down two sharply contrasting economic policy paths.