The Political Economy of Economic Growth in India, 1993-2013

ESID Working Paper No. 44

44 Pages Posted: 18 Dec 2014 Last revised: 4 Mar 2015

See all articles by Kunal Sen

Kunal Sen

University of Manchester

Sabyasachi Kar

University of Delhi - Institute of Economic Growth (IEG)

Jagadish Prasad Sahu

Centre for Economic Studies and Planning, Jawaharlal Nehru University

Date Written: December 16, 2014

Abstract

We examine the political economy causes of India’s growth acceleration in the early 1990s, the periods of high growth in the 1990s and early 2000s, and the subsequent slowdown since 2011, drawing from the ESID conceptual framework (Pritchett and Werker 2013) and periodisation of growth episodes (Kar et al. 2013a). We argue that India’s post-reform growth experience can be separated into three distinct growth episodes. The first growth episode, from 1993 to 2002, was characterised by a set of predictable informal (and relatively open) relationships (which we call ‘ordered deals’) between political and economic elites. The second episode was from 2002 to 2010; deals in this period became increasingly closed, leading to negative feedback effects from accountability institutions, the middle class and non-elites, along with structural retrogression of the economy. The third episode, beginning in 2011, was one of an incipient growth deceleration, and was characterised by increasingly disordered deals. Our analysis of the Indian growth experience provides support for the conceptual framework we have used here and our other ESID growth studies. The wider implication of our analysis is that economic growth in most developing country contexts remains episodic and prone to collapse, as institutions do not evolve over the growth process, and in many instances, deteriorate.

Keywords: economic growth, boom and bust, India, deals, institutions

Suggested Citation

Sen, Kunal and Kar, Sabyasachi and Sahu, Jagadish Prasad, The Political Economy of Economic Growth in India, 1993-2013 (December 16, 2014). ESID Working Paper No. 44, Available at SSRN: https://ssrn.com/abstract=2539174 or http://dx.doi.org/10.2139/ssrn.2539174

Kunal Sen (Contact Author)

University of Manchester ( email )

Oxford Road
Manchester, N/A M13 9PL
United Kingdom

Sabyasachi Kar

University of Delhi - Institute of Economic Growth (IEG) ( email )

Delhi, 110007
India

Jagadish Prasad Sahu

Centre for Economic Studies and Planning, Jawaharlal Nehru University ( email )

New Delhi, 110067
India

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