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

 
Author/Editor: Rodrik, Dani ; Subramanian, Arvind
 
Publication Date: May 01, 2004
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: This paper explores the causes of India's productivity surge around 1980, more than a decade before serious economic reforms were initiated. Trade liberalization, expansionary demand, a favorable external environment, and improved agricultural performance did not play a role. We find evidence that the trigger may have been an attitudinal shift by the government in the early 1980s that unlike the reforms of the 1990s, was probusiness rather than promarket in character, favoring the interests of existing businesses rather than new entrants or consumers. A relatively small shift elicited a large productivity response, because India was far away from its income-possibility frontier. Registered manufacturing, which had been built up in previous decades, played an important role in determining which states took advantage of the changed environment.
 
Series: Working Paper No. 04/77
Subject(s): Productivity | India | Economic growth | Trade liberalization | Demand | Public investment | Agricultural production | Manufacturing

Author's Keyword(s): Productivity growth | India | liberalization | manufacturing | probusiness
 
English
Publication Date: May 01, 2004
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA0772004 Pages: 42
Price:
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