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

  • Rodrik, Dani
  • Subramanian, Arvind

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 occurred around 1980, a full decade before economic liberalization. We investigate a number of hypotheses about the causes of this growth – favourable 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.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4371.

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Date of creation: Apr 2004
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Handle: RePEc:cpr:ceprdp:4371
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  1. Dani Rodrick, 2003. "Growth Strategies," Economics working papers 2003-17, Department of Economics, Johannes Kepler University Linz, Austria.
  2. Angus Deaton & Jean Dreze, 2002. "Poverty and Inequality in India: A Re-Examination," Working Papers 184, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  3. Subramanian, Arvind & Wei, Shang-Jin, 2007. "The WTO promotes trade, strongly but unevenly," Journal of International Economics, Elsevier, vol. 72(1), pages 151-175, May.
  4. Kohli, Atul, 1989. "Politics of economic liberalization in India," World Development, Elsevier, vol. 17(3), pages 305-328, March.
  5. T. N. Srinivasan & Suresh D. Tendulkar, 2003. "Reintegrating India with the World Economy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 98, May.
  6. Ricardo Hausmann & Dani Rodrik, 2002. "Economic Development as Self-Discovery," NBER Working Papers 8952, National Bureau of Economic Research, Inc.
  7. Jeffrey D. Sachs & Wing Thye Woo, . "Understanding China'S Economic Performance," Department of Economics 97-04, California Davis - Department of Economics.
  8. BAI, Jushan & PERRON, Pierre, 1998. "Computation and Analysis of Multiple Structural-Change Models," Cahiers de recherche 9807, Universite de Montreal, Departement de sciences economiques.
  9. Arvind Subramanian & Francesco Trebbi & Dani Rodrik, 2002. "Institutions Rule: The Primacy of Institutions Over Integration and Geography in Economic Development," IMF Working Papers 02/189, International Monetary Fund.
  10. Timothy Besley & Robin Burgess, 2002. "Can Labour Regulation Hinder Economic Performance? Evidence from India," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 33, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
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  12. Perron, P. & Bai, J., 1995. "Estimating and Testing Linear Models with Multiple Structural Changes," Cahiers de recherche 9552, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  13. 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.
  14. Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
  15. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  16. Bulent Unel, 2003. "Productivity Trends in India's Manufacturing Sectors in the Last Two Decades," IMF Working Papers 03/22, International Monetary Fund.
  17. Petia Topalova & Amit Khandelwal, 2011. "Trade Liberalization and Firm Productivity: The Case of India," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 995-1009, August.
  18. Shang-Jin Wei & Arvind Subramanian, 2003. "The WTO Promotes Trade, Strongly But Unevenly," IMF Working Papers 03/185, International Monetary Fund.
  19. Burgess, Robin & Venables, Anthony J., 2004. "Toward a microeconomics of growth," Policy Research Working Paper Series 3257, The World Bank.
  20. Pritchett, Lant, 1995. "Divergence, big time," Policy Research Working Paper Series 1522, The World Bank.
  21. Richard Hemming & Woosik Chu & Charles Collyns & Karen Elizabeth Parker & Ajai Chopra & Oliver Fratzscher, 1995. "India: Economic Reform and Growth," IMF Occasional Papers 134, International Monetary Fund.
  22. Deb Kusum Das, 2003. "Quantifing trade barriers: Has protection declined substantially in Indian manufacturing?," Indian Council for Research on International Economic Relations, New Delhi Working Papers 105, Indian Council for Research on International Economic Relations, New Delhi, India.
  23. Montek S. Ahluwalia, 2002. "Economic Reforms in India Since 1991: Has Gradualism Worked?," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 67-88, Summer.
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