The question

How hard you work, how much you know, and your skills have less bearing on your lifetime earnings compared to one arbitrary factor that is completely outside your control: the country where you were born.

In 1800, someone in the world’s richest country earned at most 4 times more than someone in the poorest. Today, that gap has exploded to more than 50 times. While developed nations like United States, England, and Sweden advanced steadily, many did not. The lottery of birth, always unfair, has become unforgiving.

This persistent and widening inequality defies conventional economic wisdom. In theory, such vast wealth gaps should have triggered capital flows to poorer nations, transfer of technology, and rapid catch-up growth. But this promise of convergence remains largely unfulfilled.

Yet we know rapid transformation is possible. A handful of countries, like Japan and South Korea, have compressed centuries of progress into decades. So why is such rapid growth so rare? What prevents poor countries from following these successful paths to prosperity?

India’s case is particularly perplexing. At independence, the country boasted a competent modern administrative apparatus, a political leadership genuinely committed to launching an industrial transformation, and a fairly broad and advanced industrial base. What prevented India from fully realizing its industrial potential? What are the structural factors holding it back today?

What you’ll learn

Designed for those seeking deep understanding rather than quick answers, this course combines theoretical frameworks with historical evidence to build robust analytical judgment about economic development.

You will learn about:

The forces of development: We’ll begin with the fundamental questions: Why were societies poor for thousands of years, and what caused the dramatic growth in prosperity?

The constraints on public policy: When some countries have figured out how to generate sustained economic growth, why are most countries still poor? The payoff from adopting growth-oriented policies is huge. Why do developing countries fail to implement them?

Understand India’s growth story: We’ll dive deep into India’s development strategy to explain why India failed to live up to expectations and how the past continues to cast a shadow on the present.

The contrast with Taiwan: We’ll contrast India’s development strategy with the early developmental policies of Taiwan; a small country off the coast of China that was colonized by Japan during the first half of the 20th century. Instead of abstract prescriptions for policy reform, the contrast with Taiwan is a concrete example of an alternative development strategy.

What else should you know

The course has an ambitious goal to provide a framework for thinking about India’s economic development. Perhaps you may not want to spend many hours, over many weeks, studying this topic. So that we can move fast, a number of design decisions have been made that are worth noting.

The framework is grounded in theory, but supported by ample historical evidence. The theory lends coherence and structure to the history, while the history provides the context to appreciate the otherwise abstract ideas.

The course consists of four lectures and assigned texts that have been written especially for this course. Most of the historical context is condensed in the assigned text, which you’ll read before the meetings. The coverage is wide rather than deep, and some topics may not immediately seem relevant. You might ask, “Why should I read about the balance of payments crisis in 1958?” An important lesson of the course is the importance of ideas and history in shaping the present.

During the meetings, we will build the framework, connect it with history and reflect on the relationship between ideas.

In summary, this course will deepen your understanding of economic development. By the end, you’ll have a strong analytical framework to interpret India’s development history, and understand why developing countries fail to adopt institutions that generate economic growth.