The same friend who suggested that business dispute resolution in China is very different from that practiced in Europe, America, and related countries tells me that she thinks the mechanism understood by business people from various different groups in India fits the `tort law' model better.
As I said earlier, this issue has nothing to do with criminal law or with the way one should treat a parent. It is about the way one business settles a dispute with another, when the other is distant and its people strangers.
I know nothing about India, so I am simply passing on a judgement. (In the language of certainty factors, I would say the evidence is `weakly suggestive' or `suggestive'.) Sociologists and people with a wide range of Indian experience will know more. Because businessmen are more active in more ethic groups in India than Chine, it is harder to devise stereotypes of Indian than Chinese businessmen's behavior.
Incidentally, sociology is about creating stereotypes that are more or less truthful and understanding just how truthful they are. The word `stereotype' is not an insult to sociologists. Many decisions are based on stereotypes. Thus, the old Christian belief that `Man is Fallen' depends on a stereotype of human behavior. This is the stereotype on which the United States constitution is based.
Presuming that my friend is right, then we should expect Indian businesses to succeed over the long term better than Chinese businesses. The restraining factors are other costs, such as those of labor, capital, land, energy, and government action. These may well be lower in China. The relative costs of settling disputes may simply be unimportant. Moreover, China is larger economically than India and catching up will be difficult and time consuming.
However, the thesis is dramatic: that because of lower transaction costs from economists' point of view, transaction costs are what disputes setting methods are about India, over the long term, may outgrow China.
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