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

By Dani Rodrik, Arvind Subramanian. Social Science Research Network, 2004

766 citations recorded by the source corpus.

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 incomepossibility 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.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/465b00d23a84898dab16af33eb240be0f7d6ee28

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Citations in the corpus

Industrial development and economic growth Implications for poverty reduction and income inequality (2002, background): “Acceleration of economic growth, however, started already in the 1980s, and Rodrik and Subramanian (2004) and DeLong (2001) consider the reforms and attitudinal changes of the 1980s as important reasons for India’s current success.”
How Business Is Done in the Developing World: Deals versus Rules (2015, background): “Many argue that something like this happened in China in 1978 after Deng’s announcements, or in India either with a shift to “pro-business” attitudes in the 1980s (Rodrik and Subramanian 2004) or in the 1990s with decisively announced but gradualist implementation.”
Firm growth and barriers to growth among small firms in India (2012, background): “state-controlled license regime to a liberalized regime is widely documented in the literature (we refer the reader to Aghion et al. 2005; Kochhar et al. 2006; Rodrik and Subramanian 2005 ).”
The Prospects for Sustained Growth in Africa (2007, unknown): “While, Rajan and Subramanian (2005) provide evidence that aid and the consequent exchange rate overvaluation have a significant negative effect on exports of manufactures, it is possible that countries can mitigate the adverse effects through policy changes, such as improvements aimed at enhancing p”
The Pattern and Causes of Economic Growth in India (2007, background): “More formal evidence that the GDP growth series exhibits a structural break at the end of the seventies – beginning of the 1980s can be found in Virmani (1997, 2004a), Rodrik and Subramanian (2004b), Wallack (2003), and Balakrishnan and Parameswaran (2006).”