Friday, July 05, 2013

Why Growth Matters: How Economic Growth in India Reduced Poverty and the Lessons for Other Developing Countries


Why Growth Matters: How Economic Growth in India Reduced Poverty and the Lessons for Other Developing Countries
Jagdish Bhagwati, Arvind Panagariya


Reforms led to growth in India in exactly the same way as in Brazil after President Hernando Cardoso, who as an academic sociologist had opposed globalization as leading to dependency (this is the famous dependencia thesis), took Brazil toward globalization. The same happened in China, starting in the late 1970s and early 1980s.

Some economists, such as Dani Rodrik, have argued that economies have grown despite embracing anti-trade policies and disregarding markets, so it is wrong to attribute success on growth to these liberal and pro-trade reforms. But this claim is hollow because there is no compelling case where such policies led to significant growth over a sustained period. This was particularly true of the Soviet Union, where growth rates were high for nearly two decades but then declined steadily as the autarky and the absence of market-based incentives steadily undermined the economy.

See full Article: http://yaleglobal.yale.edu/content/why-growth-matters-how-economic-growth-india-reduced-poverty-and-lessons-other-developing-co