The Mumbai Consensus is a term used to suggest the potential for the spread in global influence of India

India

India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

, with a unique and people-centric approach to managing its economy which may be taken up continually by other developing nations in time. The term is used to suggest that India has a unique model of economic growth

Economic growth

In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...

, where domestic consumer demand plays an intricate role with a continued trend of exporting, with a balance between internal demand and exports as the driving force of economic development

Economic development

Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...

. This model of economic development remains destinct from the Beijing Consensus

Beijing Consensus

Beijing Consensus is a term that represents an alternative economic development model to the Washington Consensus of market-friendly policies promoted by the IMF, World Bank and U.S. Treasury, often for guiding reform in developing countries...

 with an export-led growth

Export-led growth

Export-led growth is an economic strategy used by some developing countries. This strategy seeks to find a niche in the world economy for a certain type of export. Industries producing this export may receive governmental subsidies and better access to the local markets...

 economy, and the Washington Consensus

Washington Consensus

The term Washington Consensus was coined in 1989 by the economist John Williamson to describe a set of ten relatively specific economic policy prescriptions that he considered constituted the "standard" reform package promoted for crisis-wracked developing countries...

 focused instead on encouraging the spread of democracy

Democracy

Democracy is generally defined as a form of government in which all adult citizens have an equal say in the decisions that affect their lives. Ideally, this includes equal participation in the proposal, development and passage of legislation into law...

 and free trade

Free trade

Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...

 throughout the world.

Larry Summers

The term is not an official one but was coined by Larry Summers, an American economist

Economist

An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...

 and a key advisor and decision-maker for the White House in the Obama Administration, speaking at the U.S-India Business in mid-2010. Summers pointed out that India has a model that should be increasingly watched and could potentially be used as an example for other developing nations, suggesting that as time goes on the "majority of the world’s people (will be) following a Mumbai Consensus". Summers also suggested that India's model may become increasingly viable for other nations because it does not fail the middle class

Middle class

The middle class is any class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class....

 but instead allows this group to prosper, whilst not deviating from the traditional capitalist approach to running the economy

Economy

An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...

.
Summers also points out that such a Mumbai Consensus is imagined for a time far in the future like 2040, saying that: “Perhaps in 2040, discussions will be less about the Washington consensus or the Beijing consensus than about the Mumbai consensus”. However, Summers doesn't ignore the fact that even with India's current state of economic prosperity, there still are a number of challenges that would hurt the viability of a Mumbai Consensus, with a need of continued assurance of efficiency of government

Government

Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...

 whilst also having continued faith in the public sector

Public sector

The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...

 and action which means that continued economic prosperity does not just lead to the success of a select few.
Summers also does not see a Mumbai Consensus like he describes as confrontational with the United States and its own global interests, saying that: "The world that the United States wants to see, the world that India wants to see, is a world of increasing integration, is a world of increasing prosperity, is a world of tolerance, is a world at peace, is a world where prosperity comes from the bottom up, is a world where respect for individuals is the paramount value".

See also

• Washington Consensus
  Washington Consensus
  The term Washington Consensus was coined in 1989 by the economist John Williamson to describe a set of ten relatively specific economic policy prescriptions that he considered constituted the "standard" reform package promoted for crisis-wracked developing countries...
  
  
• Developmental economics
• Globalism
  Globalism
  Globalism can have at least two different and opposing meanings. One meaning is the attitude or policy of placing the interests of the entire world above those of individual nations...
  
  
• Potential Superpowers
  Potential superpowers
  A potential superpower is a state or a political and economic entity that is speculated to be, or to be in the process of becoming, a superpower at some point in the 21st century. Previously, it was considered by many sources that only the United States fulfilled the criteria to be considered a...
  
  
• Asian Century
  Asian Century
  The Asian Century is a term used to describe the belief that, if certain demographic and economic trends persist, the 21st century will be dominated by Asian politics and culture, as the 20th century is sometimes referred to as the American Century, and the 19th century the British...
  
  
• Beijing Consensus
  Beijing Consensus
  Beijing Consensus is a term that represents an alternative economic development model to the Washington Consensus of market-friendly policies promoted by the IMF, World Bank and U.S. Treasury, often for guiding reform in developing countries...
  
  

External links

• India and the Global Economy by Lawrence H. Summers. Remarks at The Asia Society, Mumbai, India. 15 October 2010.
• The Mumbai Consensus by Chrystia Freeland. 22 October 2010.