India versus China

Which nation will eventually come out ahead: India or China?

From a Fortune analysis that sees an argument for India:

India's capital markets work the way they should; China's are a rigged casino. India has more engineers and scientists; its domestic entrepreneurs have made a bigger mark.

And while no one in his right mind wants to go near the creaky, backlogged Indian civil courts, India is a country that does try to govern by the rule of law. China, ultimately, is a country that will break the rule of law whenever the party feels like it or deems its power to be threatened even if that "threat" is a few thousand poor peasants and their lawyer.

It is also worth noting that China's one-child policy means that it will face the costs of a rapidly aging population much sooner than India.

Since 1992, when Deng Xiaoping decided to gun for growth, China's economy has been running flat out. Over the same period, India's has accelerated from a crawl to a brisk jog; in a good year, it can deliver 8 percent growth. But with the example of positive change behind it, plus a reasonable monsoon and the willingness to learn from China's successes, it is not hard to imagine India growing at China-like speed.

It is at that point that its institutional strengths (a much richer civil society and a government that can be held accountable) give it a decided advantage.