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

by Jagdish Bhagwati, Arvind Panagariya

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Overview

In its history since Independence, India has seen widely different economic experiments: from Jawharlal Nehru's pragmatism to the rigid state socialism of Indira Gandhi to the brisk liberalization of the 1990s. So which strategy best addresses India's, and by extension the world's, greatest moral challenge: lifting a great number of extremely poor people out of poverty?

Bhagwati and Panagariya argue forcefully that only one strategy will help the poor to any significant effect: economic growth, led by markets overseen and encouraged by liberal state policies. Their radical message has huge consequences for economists, development NGOs and anti-poverty campaigners worldwide. There are vital lessons here not only for Southeast Asia, but for Africa, Eastern Europe, and anyone who cares that the effort to eradicate poverty is more than just good intentions. If you want it to work, you need growth. With all that implies.

Product Details

ISBN-13: 9781610393737
Publisher: PublicAffairs
Publication date: 04/08/2014
Edition description: First Trade Paper Edition
Pages: 304
Product dimensions: 5.70(w) x 8.90(h) x 0.90(d)

About the Author

Jagdish Bhagwati is university professor of economics at Columbia, and a long time fellow at the Council on Foreign Relations. A native of India, Professor Bhagwati studied at Cambridge University, MIT, and Oxford before returning to India in 1961 as professor of economics at the Indian Statistical Institute. He is the author of many books, among them In Defense of Globalization.

Arvind Panagariya is Professor of Indian Economics at Columbia. He is a non-resident senior fellow at the Brookings Institution. He has been the chief economist of the Asian Development Bank and a professor of economics and co-director, Center for International Economics, University of Maryland at College Park. He is the author of, among other books, India: The Emerging Giant.

Table of Contents

Preface vii

Introduction The Tryst: The Vision and the Reality 1

Part I Debunking the Myths

1 Indian Socialism and the Myths of Growth and Poverty 7

2 Myths About the Early Development Strategy 11

3 Reforms and Their Impact on Growth and Poverty 27

4 Reforms and Inequality 45

5 Reforms and Their Impact on Health and Education 57

6 Yet Other Myths 81

Part II The New Challenges: Track I Reforms for Faster and Broader Growth

7 Track I and Track II Reforms 95

8 A Multitude of Labor Laws and Their Reform 101

9 Land Acquisition 125

10 Infrastructure 129

11 Higher Education 135

12 Other Track I Reforms 143

Part III More Effective and Inclusive Redistribution: Track II

13 Track II Reforms 149

14 Attacking Poverty by Guaranteeing Employment 157

15 Adult Nutrition and Food Security 165

16 Reforming Health Care 177

17 Elementary Education 189

India: Past and Future 201

Acknowledgments 209

Appendix 1 Socialism Under Nehru 211

Appendix 2 Measuring Inequality: The Gini Coefficient 215

Appendix 3 Key Provisions of the Right to Education Act, 2009 219

Appendix 4 Prime Ministers of India 223

Notes 225

References 255

Index 267

What People are Saying About This

From the Publisher

George A. Akerlof, Nobel Laureate in Economics, 2001“Jagdish Bhagwati and Arvind Panagariya are two of the great intellectual lights behind one of the greatest miracles of economic history: the economic reform of India, and its subsequent takeoff.  It is not just the well-to-do who have benefited, but, especially, the poor.  The lessons from the spirit of 1991 are not just relevant for India today; they are also of prime importance for the billions of citizens of low income countries around the globe.”
Martin Feldstein, George F. Baker Professor of Economics at Harvard University and president emeritus of the National Bureau of Economic Research“In this important book the two leading experts on India’s economy refute the claims of those who reject pro-growth policies in favor of redistribution schemes. India’s experience in the past two decades shows how a nation’s economic growth reduces poverty and improves the well-being of disadvantaged groups. Bhagwati and Panagariya explain what India needs to do now and how other countries can learn from India’s experience.”
Hernando de Soto, economist and author of The Mystery of Capital“Assembling reams of evidence from India’s astonishing economic success story, Bhagwati & Panagariya make an unbeatable case for why market reforms are essential to economic growth—and improving the lives of the poor. Serious reformers throughout the developing world cannot ignore this book or Bhagwati’s work throughout the years.”
Ernesto Zedillo, director of the Yale Center for the Study of Globalization and former president of Mexico“Every important developing country should be the subject of a masterful book like this. Bhagwati and Panagariya have paid a great service to India—and actually other emerging countries—by writing it. If it’s a must read for scholars and practitioners of economic development, it should be absolutely mandatory for the Indian political leaders."

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