DP4371 From 'Hindu Growth' to Productivity Surge: The Mystery of the Indian Growth Transition
|Author(s):||Dani Rodrik, Arvind Subramanian|
|Publication Date:||April 2004|
|Keyword(s):||economic growth, india, liberalization|
|Programme Areas:||International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=4371|
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.