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Long-Run Growth Trends and Convergence Across Indian States

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  • Rayaprolu Nagaraj
  • Aristomène Varoudakis
  • Marie-Ange Véganzonès
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    Abstract

    This paper examines the growth performance of Indian States during 1970-94. We, first, propose a grouping of States according to differences in the availability of physical, social, and economic infrastructure, using principal components analysis. Then, combining principal components analysis and panel data estimation techniques, we assess the contribution of various infrastructure indicators to growth performance. The analysis tackles endogeneity issues in the provision of infrastructure by way of instrumental variables estimation for many of the infrastructure indicators. We do find evidence of conditional convergence across States. This does not rule out persistent income inequalities due to the dispersion of steady-state income levels. Such disparities are accounted for by differences, first, in the structure of production, second, in infrastructure endowments, and, third, in Statespecific fixed effects in the growth regression. Consequently, economic policy measures aiming at ... Ce document examine les performances de croissance des États Indiens sur la période 1970-94. Nous procédons tout d’abord à un regroupement des États en fonction de leurs dotations en infrastructures physiques, économiques et sociales, sur la base d’une analyse en composantes principales. Nous combinons ensuite cette technique et l’économétrie des données de panel, dans le but d’évaluer la contribution des divers types d’infrastructures à la croissance. L’analyse tient compte de l’endogénéité de certains types d’infrastructures par l’utilisation de variables instrumentales. Nos résultats permettent de mettre en évidence la convergence conditionnelle des États Indiens. Ce constat n’exclut pas la persistance des inégalités de revenu par tête entre les États, du fait de l’existence de différences dans le niveau d’équilibre de ces revenus. Ces différences s’expliquent par celles premièrement des structures de production, deuxièmement des dotations en infrastructures ...

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    File URL: http://dx.doi.org/10.1787/138016038733
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Development Centre Working Papers with number 131.

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    Date of creation: Jan 1998
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    Handle: RePEc:oec:devaaa:131-en

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    Cited by:
    1. Purohit, Brijesh C., 2008. "Health and human development at sub-state level in India," The Journal of Socio-Economics, Elsevier, vol. 37(6), pages 2248-2260, December.
    2. Sabyasachi Kar & Debajit Jha & Alpana Kateja, 2011. "Club-convergence and polarization of states: A nonparametric analysis of post-reform India," Indian Growth and Development Review, Emerald Group Publishing, vol. 4(1), pages 53-72, April.
    3. Alessandrini, Michele & Buccellato, Tullio & Scaramozzino, Pasquale, 2008. "Whither the Indian Federation? Regional Disparities and Economic Reforms," MPRA Paper 23416, University Library of Munich, Germany.
    4. Chetan Ghate & Stephen Wright, 2008. "V-Factor: Distribution, timing and correlates of the the great Indian growth turnaround," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-03, Indian Statistical Institute, New Delhi, India.
    5. Nirvikar Singh & Laveesh Bhandari & Aoyu Chen & Aarti Khare, 2004. "Regional Inequality in India: A Fresh Look," Development and Comp Systems 0412006, EconWPA.
    6. Kamakshya Trivedi, . "Regional Convergence and Catch-up in India between 1960 and 1992," Economics Papers 2003-W01, Economics Group, Nuffield College, University of Oxford.

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