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

47 Pages Posted: 13 Apr 2004

See all articles by Dani Rodrik

Dani Rodrik

Harvard University - Harvard Kennedy School (HKS); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Arvind Subramanian

International Monetary Fund (IMF); Center for Global Development

Multiple version iconThere are 2 versions of this paper

Date Written: March 9, 2004

Abstract

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 (favorable 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. We also find that registered manufacturing built up in previous decades played an important role in influencing the pattern of growth across the Indian states.

Keywords: Economics - International Economics, International Development

Suggested Citation

Rodrik, Dani and Subramanian, Arvind, From 'Hindu Growth' to Productivity Surge: The Mystery of the Indian Growth Transition (March 9, 2004). KSG Working Paper No. RWP04-13. Available at SSRN: https://ssrn.com/abstract=529064 or http://dx.doi.org/10.2139/ssrn.529064

Dani Rodrik (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

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Centre for Economic Policy Research (CEPR)

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National Bureau of Economic Research (NBER)

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Arvind Subramanian

International Monetary Fund (IMF) ( email )

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Center for Global Development

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