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Economic Growth, Well-Being and Governance under Economic Reforms: Evidence from Indian States


  • Sudip Ranjan Basu

    (Graduate Institute of International Studies HEI , Geneva)


This paper provides empirical evidence, from the study of sixteen major Indian states for the period 1980-2001, that under the economic reform process, the better institutional mechanism could actually help economies to grow faster with higher level of economic well-being. We estimate economic well-being index (by aggregating fifteen socio- economic variables, viz, education, infrastructure, technological progress, income, etc.) and also index of good governance (by aggregating thirteen variables indicating rule of law, government functioning, public services, press freedom, etc) by multivariate statistical measures. Panel regression showed that governance measures, and economic policy variables are crucial to explain differential level of development performance across states in India during the last two decades.

Suggested Citation

  • Sudip Ranjan Basu, 2005. "Economic Growth, Well-Being and Governance under Economic Reforms: Evidence from Indian States," Development and Comp Systems 0509007, EconWPA.
  • Handle: RePEc:wpa:wuwpdc:0509007
    Note: Type of Document - pdf; pages: 48. pdf document

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    References listed on IDEAS

    1. Datt, Gaurav & Ravallion, Martin, 1997. "Macroeconomic Crises and Poverty Monitoring: A Case Study for India," Review of Development Economics, Wiley Blackwell, vol. 1(2), pages 135-152, June.
    2. Richard E. Baldwin & Philippe Martin, 1999. "Two Waves of Globalisation: Superficial Similarities, Fundamental Differences," NBER Working Papers 6904, National Bureau of Economic Research, Inc.
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    4. Dasgupta, Partha & Weale, Martin, 1992. "On measuring the quality of life," World Development, Elsevier, vol. 20(1), pages 119-131, January.
    5. Bardhan, Pranab & Mookherjee, Dilip, 1998. "Expenditure Decentralization and the Delivery of Public Services in Developing Countries," Center for International and Development Economics Research (CIDER) Working Papers 233623, University of California-Berkeley, Department of Economics.
    6. Bruno, Michael, 1989. "Econometrics and the Design of Economic Reform," Econometrica, Econometric Society, vol. 57(2), pages 275-306, March.
    7. David Dollar & Aart Kraay, 2004. "Trade, Growth, and Poverty," Economic Journal, Royal Economic Society, vol. 114(493), pages 22-49, February.
    8. Keefer, Philip & Knack, Stephen, 1997. "Why Don't Poor Countries Catch Up? A Cross-National Test of Institutional Explanation," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 590-602, July.
    9. Andrea Bassanini & Stefano Scarpetta & Philip Hemmings, 2001. "Economic Growth: The Role of Policies and Institutions: Panel Data. Evidence from OECD Countries," OECD Economics Department Working Papers 283, OECD Publishing.
    10. Sudip Ranjan Basu, 2005. "Does Governance Matter?Some Evidence from Indian States," Development and Comp Systems 0509008, EconWPA.
    11. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
    12. Dan Ben-David, 1993. "Equalizing Exchange: Trade Liberalization and Income Convergence," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 653-679.
    13. Sudip Ranjan Basu & Jaya Krishnakumar & Gabriela Flores, 2004. "Spatial Distribution of Welfare Across States and Different Socio-Economic Groups in Rural and Urban India," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 2004.14, Institut d'Economie et Econométrie, Université de Genève.
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    Cited by:

    1. Alshahry Abdullah saeed A & Wang Aimin, 2015. "Market Orientation Impact on Radical and Incremental Marketing Innovation: A Study of Saudi Arabia Hospital Marketing Efforts," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 1(6), pages 101-117, May.
    2. Gaurav Nayyar, 2017. "Economic Growth and the Incom There is a fairly vast literature, which attempts to explain cross-regional (between countries or between states within countries) differences in per capita income growth," Economics Bulletin, AccessEcon, pages 264-281.
    3. Sudip Ranjan Basu, 2007. "Comparing China and India: Is dividend of economic reforms polarized?," IHEID Working Papers 01-2007, Economics Section, The Graduate Institute of International Studies.

    More about this item


    Growth; Well-being; Governance; Economic Reforms; Panel data; India;

    JEL classification:

    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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