In his review of Writing on the Wall by Will Hutton (a former economics editor at the Guardian) Bhagwati agrees with the book's author that "China faces a number of critical economic difficulties that are directly traceable to its lack of democracy. ":
Indeed, it’s true, as Hutton shows in great detail, that China faces a number of critical economic difficulties that are directly traceable to its lack of democracy. He mentions the Sinologist Elizabeth Economy, for example, who has documented how indiscriminate environmental destruction is turning the Chinese landscape into a wasteland. Should this damage be factored into the statistics on the Chinese economy, the result could well be to reduce China’s estimated growth rate below its current levels. More important, the Chinese experience shows dramatically, as the Russian experience did, that environmental damage is likely to become ever more crippling in the future because there are no democratic institutions like public opposition and a free press to countervail and contain it.
Similarly, because China has an authoritarian regime, it cannot fully profit from the information revolution, thus inhibiting the technology that is at the heart of growth today. The PC (personal computer) is incompatible with the C.P. (Communist Party). So India, with its robust and chaotic democracy — what V. S. Naipaul has called a “million mutinies” — has moved dramatically ahead of China in computer technology. Hutton points out that from 1981 to 1995 China had 537 scientists and engineers doing research and development per one million people while India had only 151, and that China had three times as many personal computers as India and a 4-to-1 lead in Internet usage. Yet by 2001, India was producing one-fourth more software, and exporting most of it. “So despite massive investment,” Hutton writes, China “trailed far behind India.” He points out, too, that China damages itself by seeking to control and stifle what its citizens can learn and disseminate. “Yahoo, Microsoft and Google are part of the cultural yeast of globalization,” he says, “yet each has been at the receiving end of China’s Internet firewall of censorship.”