The Political Economy of India's Growth Episodes (Building a Sustainable Political Economy: SPERI Research & Policy)

‘This book is different from most other attempts to understand the politics of Indian economic development. Breaking down the last 65 years of Indian development into several episodes of growth, it provides a rich set of insights into the political economy of the Indian development process and is a valuable addition to the literature.’ –Pranab Bardham, University of California, Berkeley, USA ‘Sustained economic growth in the world's largest democracy is critically important to human well-being, but the ups and downs of growth in India are not well-understood. This book provides a fresh and insightful approach to understanding what drives the starts of booms and the onset of slowdowns.’ –Lant Pritchett, Harvard University, USA ‘This is a little book with big arguments. The authors' explanation of the changing character of the deals done between political and business elites makes for the most original contribution to studies of the political economy of Indian development since Pranab Bardhan's seminal work of the early 1980s’ –John Harriss, Simon Fraser University, Vancouver, Canada This book moves beyond the usual economic analysis of the Indian growth story and provides a fresh perspective on the determinants of growth episodes in post-independence India, based on its political economy. Using a robust and novel technique, the authors identify four such episodes during this period. The first, running from the 1950s to 1992, was mostly characterized by economic stagnation, with a nascent recovery in the eighties. The second, covering the period 1993 to 2001, witnessed the first growth acceleration in the economy. A second acceleration ran from 2002 to 2010. The fourth and final episode started with the slowdown in 2010 and continues to this day. The book provides a theoretical framework that focuses on rent-structures, institutions and the polity, and demonstrates how changes in these can explain the four growth episodes. Kar and Sen argue that the transitions from one growth episode to another can be explained by the bi-directional relationship between growth outcomes and institutional arrangements, and by the manner in which institutional arrangements and their transitions are determined by the political bargains struck between the elite groups in Indian society. 'This book is different from most other attempts to understand the politics of Indian economic development. Breaking down the last 65+ years of Indian development into several episodes of growth, it provides a rich set of insights into the political economy of the Indian development process and is a valuable addition to the literature.' -Pranab Bardham, University of California, Berkeley, USA 'Sustained economic growth in the world's largest democracy is critically important to human well-being but the ups and downs of growth in India are not well-understood. This book provides a fresh and insightful approach to understanding what drives the starts of booms and the onset of slowdowns.' -Lant Pritchett, Harvard University, USA 'This is a little book with big arguments. The authors' explanation of the changing character of the deals done between political and business elites makes for the most original contribution to studies of the political economy of Indian development since Pranab Bardhan's seminal work of the early 1980s' -John Harriss, Simon Fraser University, Vancouver, Canada This book moves beyond the usual economic analysis of the Indian growth story and provides a fresh perspective on the determinants of growth episodes in post-independence India, based on its political economy. Using a robust and novel technique, the authors identify four such episodes during this period. The first, running from the fifties to 1992, was mostly characterized by economic stagnation, with a nascent recovery in the eighties. The second, covering the period 1993 to 2001, witnessed the first growth acceleration in the economy. A second acceleration ran from 2002 to 2010. The fourth and final episode started with the slowdown in 2010 and continues to this day. The book provides a theoretical framework that focuses on rent-structures, institutions and the polity, and demonstrates how changes in these can explain the four growth episodes. Kar and Sen argue that the transitions from one growth episode to another can be explained by the bi-directional relationship between growth outcomes and institutional arrangements, and by the manner in which institutional arrangements and their transitions are determined by the political bargains struck between the elite groups in Indian society. Sabyasachi Kar is Associate Professor at the Institute of Economic Growth, India, and Honorary Research Fellow at the University of Manchester, UK. He has published a number of books and academic articles on macroeconomics, growth and development economics. He is Associate Editor for the Indian Growth and Development Review. Kunal Sen is Professor of Development Economics at the Global Development Institute, University of Manchester, UK, and Joint Research Director at the Effective States and Inclusive Development (ESID) Research Centre. He won the Sanjaya Lall Prize in 2006, and the Dudley Seers Prize in 2003 Acknowledgements 6 Contents 7 List of Abbreviations 8 List of Figures 10 Chapter 1: A Political Economy Reading of India’s Growth Experience 12 Introduction 12 A Brief Description of Post-Independence Growth in India 14 Indian Growth Episodes 17 Politics, Institutions and Growth in India: Views from the Past 19 Trends in India’s Political Economy from a Growth Perspective 23 The Political Economy of India’s Growth Episodes 26 Chapter 2: A Political Economy Theory of Growth Episodes 27 Introduction 27 The Deals Space 29 The Rent Space 30 The Political Space 32 Towards a Political Economy Theory of Growth Episodes 33 Note 38 Chapter 3: Stagnation and a Nascent Recovery: The Growth Episode of 1950–1992 39 Introduction 39 The Evolution of the Economy, 1950–1992 40 The Evolution of Political Institutions, 1950–1992 44 Why Did the Indian Economy Observe a Protracted Stagnation Till the 1980s and Then a Recovery? 46 The Evolution of Deals, 1950–1992 49 Summary 52 Note 52 Chapter 4: Onset of High Growth: The Growth Episode of 1993–2001 54 Introduction 54 Evolution of the Economy, 1993–2001 55 Evolution of Political Institutions, 1993–2001 60 Evolution of Deals, 1993–2001 62 Summary 65 Notes 65 Chapter 5: Rapid Growth and Limited Structural Transformation: The Growth Episode of 2002–2010 66 Introduction 66 The Evolution of the Economy, 2002–2010 67 The Rentier, Magician, Powebroker and Workhorse Sectors 70 Structural Transformation 71 The Evolution of Political Institutions, 2002–2010 74 The Evolution of Deals, 2002–2010 74 Summary 84 Notes 85 Chapter 6: The Post-2010 Growth Slowdown and a Debatable Partial Recovery 86 Introduction 86 Institutional Arrangements and the Political Economy, 2011–2016 94 Summary 98 Chapter 7: Politics, Institutions, Episodes: Concluding Observations 99 Medium-Term Growth Rates Are Volatile and Episodic 100 The Deals Environment Is a Critical Institutional Arrangement That Plays a Major Role in Growth Episodes 100 Politics Plays a Significant Role in Determining the Deals Environment 101 Politics, Institutions, Episodes: Lessons from Some Other Countries 102 References 104 Index 110 This book presents an ethical framework which evaluates the legitimacy of the practice of ghostwriting. It explores the connection between personal authenticity and the use of ghostwriters in corporate, political, legal, higher education, and scientific contexts. It then examines the history of ghostwriting as a professional practice and introduces a model for ethical analysis. In this book, the authors shrewdly address crucial ethical questions such as: When is it acceptable for a leader to claim the words of a ghostwriter as their own? When may this be inappropriate or even dangerously misleading? What are the consequences when public awareness of this practice leads to cynicism about the authenticity of leaders and their communications? And when, if ever, is the use of a ghostwriter ethical? This book will be welcomed by scholars and practitioners alike as an original and timely contribution to the literature of business, politics, and communications Front Matter....Pages i-xii A Political Economy Reading of India’s Growth Experience....Pages 1-15 A Political Economy Theory of Growth Episodes....Pages 17-28 Stagnation and a Nascent Recovery: The Growth Episode of 1950–1992....Pages 29-43 Onset of High Growth: The Growth Episode of 1993–2001....Pages 45-56 Rapid Growth and Limited Structural Transformation: The Growth Episode of 2002–2010....Pages 57-76 The Post-2010 Growth Slowdown and a Debatable Partial Recovery....Pages 77-89 Politics, Institutions, Episodes: Concluding Observations....Pages 91-95 Back Matter....Pages 97-105