Governance of economic and political activities both by private and public institutions is an important source of economic development apart from the conventional sources such as technological progress, capital accumulation and endowment of resources of a nation. China and India are the two largest emerging economies with different governance mechanisms of political communism, democracy and capitalism. China has been able to achieve extraordinary economic growth rates since 1980 under communism while India’s growth has been under complex democratic institutions. This paper develops a simple theoretical framework of comparative governance and applies it qualitatively to China briefly and India in detail.