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From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition

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  • Rodrik, Dani

    (Harvard U)

  • Subramanian, Arvind

    (International Monetary Fund)

Abstract

Most conventional accounts of India's recent economic performance associate the pick-up in economic growth with the liberalization of 1991. This paper demonstrates that the transition to high growth occured around 1980, a full decade before economic liberalization. We investigate a number of hypotheses about the causes of this growth (favorable external environment, fiscal stimulus, trade liberalization, internal liberalization, the green revolution, public investment) and find them wanting. We argue that growth was triggered by an attitudinal shift on the part of the national government towards a pro-business (as opposed to pro-liberalization) approach. We provide some evidence that is consistent with this argument. We also find that registered manufacturing built up in previous decades played an important role in influencing the pattern of growth across the Indian states.

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Bibliographic Info

Paper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp04-013.

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Date of creation: Mar 2004
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Handle: RePEc:ecl:harjfk:rwp04-013

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  1. Jeffrey D. Sachs & Wing Thye Woo, . "Understanding China'S Economic Performance," Department of Economics, California Davis - Department of Economics 97-04, California Davis - Department of Economics.
  2. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(1), pages 91-134, February.
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  14. Petia Topalova, 2004. "Trade Liberalization and Firm Productivity," IMF Working Papers 04/28, International Monetary Fund.
  15. Charles R. Hulten & Sylaja Srinivasan, 1999. "Indian Manufacturing Industry: Elephant or Tiger? New Evidence on the Asian Miracle," NBER Working Papers 7441, National Bureau of Economic Research, Inc.
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  17. Arvind Subramanian & Shang-Jin Wei, 2003. "The WTO Promotes Trade, Strongly But Unevenly," NBER Working Papers 10024, National Bureau of Economic Research, Inc.
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  1. Meet Arvind Subramanian, the Man Who Could Be India’s Next Chief Economic Adviser
    by Raymond Zhong in Real Time Economics on 2014-08-22 13:02:39
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