Some Consequences of Giantism: The Case of India

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Abstract
Economists tend to discount national size in their explanations of development, on the mistaken assumption that all aspects of big and little economies are proportionate. Taking population as the measure of “size,” and focusing on the second of the four demographic giants (China, India, USSR, U.S.), the present analysis dwells on the proposition that giantism adds the awkwardness of more layers to official hierarchies. There are two escapes: acceptable decentralization, that is, downward delegation, and “sideways delegation” to such servomechanisms as self-adjusting markets. India not only needs the market for coping with giantism; its size makes its market substantially different—and on balance better—if government can avoid balkanizing its internal economic space. Giantism has, as well, some human-resource dimensions (it may lend the advantage of critical mass to training of skilled elites) and certainly some international aspects (the trade-to-GNP ratios of giant countries, their aid receipts per capita, and their votes per capita in multilateral institutions are all low).

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