Federalism for development

Federalism in development planning is necessary for maintaining more vigorous growth and a higher degree of political harmony

In every large and diverse country, federalism matters not just for political stability but also for economic development. The decentralisation of authority to provincial and sub-provincial levels for designing development policies and programmes can take local conditions into account and may be more effective than centrally-designed and enforced development goals and methods in a country as diverse as India.

The rapid growth of China over the past three decades provides an example. Ronald Coase, a Nobel Prize-winning economist, and his collaborator Ning Wang, have argued in a paper written a decade ago that the explanation for this growth acceleration can