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The economy of Punjab state in India offers an interesting case study. Punjab has been for decades – and remains – one of India’s better-off states, and so it tends not be included in the primary focus of national programs meant to reduce poverty or spur economic development. But, Punjab’s relative economic position within India has declined rapidly in recent years. This decline has been accompanied by environmental problems and symptoms of deep social malaise. As will be argued in this paper, Punjab is facing a multidimensional crisis that requires urgent attention. This paper provides an overview of Punjab’s crisis, through an analysis of the dynamics of Punjab’s economic development as shaped by its political economy, its social dynamics and exogenous events since independence. It argues that one can understand both Punjab’s success in certain areas of agriculture and its subsequent relative decline in terms of the interaction of these factors. It uses this historical analysis to provide an assessment of Punjab’s future economic development, in terms of the structural changes that are needed, and how these can be encouraged or implemented by policy makers within the constraints of its current political-economic equilibrium.

Fifty years ago, Punjab embarked on its famous Green Revolution, leading the rest of India in that innovation, and becoming the country's breadbasket. Now its economy and society are struggling by relative, and sometimes even absolute, measures. Using the original Green Revolution as a benchmark, this paper discusses five areas of challenge and promise for a new round of agricultural innovation in Punjab. These are: complexity of the agricultural economy, complementary inputs such as infrastructure, switching costs (including risks), balancing frontier innovation and adaptation, and the relative roles of the public and private sectors.

This paper analyzes detailed differences in patterns of financial development across the major Asian economies, including three of the region’s largest economies (China, Japan and South Korea), to understand how these differences might affect possibilities for greater regional financial integration. In particular, the paper argues that heterogeneous patterns of financial development, and not just differences in levels of financial development, may present an economic challenge to regional financial integration efforts, aside from possible political challenges. The paper provides background on the case for financial openness, Asian experiences with financial integration, and regional economic responses to external shocks. It also discusses policy options, including regulatory reform and coordination, and possible risk management policies and institutions, in the context of heterogeneous patterns of financial development.

This is a collection of essays written for the Financial Express, an Indian financial daily. The common theme of these essays, which cover a period of almost four years, from June 2010 to March 2014, is the India’s struggles with economic policy reform. The essays are organized into several broad topical groupings, and chronologically within each section. The first section considers overall development goals, followed by a group of essays on foreign investment in retailing, financial inclusion and tax reform. This is followed by a section on macroeconomics and international finance, including several discussions of inflation policy and exchange rate policy. Two short sections discuss aspects of the corporate sector and job creation. The last section covers several topics: water, food, intergovernmental transfers and rural road construction.

This is a collection of essays written for the Financial Express, an Indian financial daily. The common themes of these essays, which cover a period of almost four years, from August 2010 to June 2014, are issues of growth and innovation in India, considered in two sequential parts, each part ordered chronologically. Topics considered in the first part include the quality and limits of economic growth, rights and other aspects of well-being, spatial dimensions, and drivers of growth. The second part examines innovation in the context of manufacturing, education, information technology, management and tax incentives.

This is a collection of essays written for the Financial Express, an Indian financial daily. The common theme of these essays, which cover a period of almost four years, from September 2010 to June 2014, is the issue of governance in India, and how politics combines with societal and institutional structures to shape the quality of governance. The essays discuss corruption, citizenship, effective delivery of public goods and services, taxation and the evolution of democracy at different levels of the Indian polity. The collection begins with the corruption surrounding the Commonwealth Games, and ends with the implications of India’s recent, potentially path-breaking general election.

This is a collection of essays written for the Financial Express, an Indian financial daily. The common theme of these essays, which cover a period of almost four years, from October 2010 to May 2014, is the issue of how India is finding its place in the world, after a history of colonization and post-colonial suspicions. The essays discuss rebalancing the world economy, the G20 and India’s place in that newish grouping, foreign policy and comparisons to the US, China and Russia, cultural and financial impacts of globalization, and the role of India’s diaspora. The concluding essay considers some global positioning options, good and bad, for India’s new government.

This study provides new evidence on the relationship between finance and economic growth using an innovative dynamic panel threshold technique. The sample consists of 87 developed and developing countries. The empirical results indicate that there is a threshold effect in the finance-growth relationship. In particular, we find that the level of financial development is beneficial to growth only up to a certain threshold; beyond the threshold level further development of finance tends to adversely affect growth. These findings reveal that more finance is not necessarily good for economic growth and highlight that an "optimal" level of financial development is more crucial in facilitating growth. © 2014 Elsevier B.V.

This article analyzes differences in patterns of financial development across the major East Asian economies, particularly for the three largest economies of the region (China, Japan and South Korea), in the context of the possibilities for greater regional financial integration. It argues that these differences in patterns of financial development present an economic challenge to regional financial integration efforts, in addition to differences in levels of financial development and possible political barriers. The article reviews arguments for and against financial openness, the East Asian experience with financial integration, how economies in the region have responded to shocks and what they may do to continue to thrive in the future. It also discusses policy options for the future, including regulatory reform and coordination, and various possible risk management policies and institutions.

This paper examines short‐run dynamics and changing sources of wealth among the Forbes 400 annual list of wealthiest individuals in the United States, before and after the 2008–2009 financial crisis. We analyze the interaction of growth of wealth with education, age, and being self‐made versus inheriting wealth. We find evidence of conditional convergence of wealth within the group. The wealth of the self‐made grew faster than their counterparts, though less so after the crisis. Those with advanced degrees had higher pre‐crisis growth of wealth than those without such degrees. Controlling for these characteristics, age was not a factor in wealth accumulation. Mobility in and out of the group was higher pre‐crisis. [ABSTRACT FROM AUTHOR]

This article examines the apparent paradox of India's combination of durable democracy and electoral accountability with a capable bureaucracy, coinciding with a deficient development trajectory. It outlines the nature of the conceptual problem, where India is an outlier in global patterns. Then it compares different conceptual approaches to drawing connections from governance institutions to development outcomes. Next, it reviews some of the contributions to understanding India's political economy in recent decades. Finally, it draws lessons from India's experience for the appropriateness of different theories of governance and development. One conclusion is that the paradox recedes when attention is paid to the subnational level, where India's states encompass considerable variation in initial societal and economic conditions and in development outcomes, and a sufficiently rich theoretical framework, that of limited access orders, is used to situate and encompass the different subnational experiences. [ABSTRACT FROM AUTHOR]

This paper examines changes in regional inequality in India in the 1990s, using data for 59 of India’s 78 agro-climatic regions from the National Sample Survey. It extends the work of Singh et al. (2003) in two ways. First, it allows for differences in baseline growth performance across individual states. It confirms the relatively poor performance of eastern states in the 1990s. Second, it also analyzes economic performance using NSS consumption expenditure data. In this case, it finds that there was conditional convergence for urban households, but not for rural households in that period.

The past two decades have witnessed a worldwide move by emerging markets to adopt explicit or implicit inflation targeting regimes. A notable and often discussed exception to this trend, of course, is China which follows a pegged exchange rate regime supported by capital controls. Another major exception is India. It is not clear how to characterize the monetary regime or identify the nominal monetary anchor in India. Is central bank policy in India following a predictable rule that is heavily influenced by a quasi inflation target? And how has the monetary regime been affected by the gradual process of financial liberalization in India? To address these points, we investigate monetary policy regime change in India using a Markov switching model to estimate a time-varying Taylor-type rule for the Reserve Bank of India. We find that the conduct of monetary policy over the last two decades can be characterized by two regimes, which we term 'Hawk' and 'Dove.' In the first of these two regimes, the central bank reveals a greater relative (though not absolute) weight on controlling inflation vis-à-vis narrowing the output gap. The central bank however was found to be in the "Dove" regime about half of our sample period, focusing more on the output gap and exchange rate targets to stimulate exports, rather than moderating inflation. India thus seems to be following its own direction in the conduct of monetary policy, seemingly not overly influenced by the emphasis on quasi-inflation targeting seen in many emerging markets. © 2013 Elsevier B.V.

This paper examines the experience of 10 Asian countries with respect to growth, trade and FDI. It explores relationships between the nature of exports and imports and growth, as well as the relevance of FDI as a channel for these relationships. We find that FDI is often positively correlated with higher productivity levels in exports and imports. The effect for imports is particularly apparent for imported intermediate goods, reflecting the emergence of greater trade fragmentation. In turn, both imported intermediates and exports that are associated with higher productivity levels are positively correlated with per capita GDP. This paper therefore brings together empirical evidence that integrates discussions of FDI, trade fragmentation and improvements in the productivity of traded goods.

We examine the composition of bilateral trade between the United States and eight Asian Pacific economies from 1962 to 1992. Two complementary time series analyses of individual commodities at the SITC four-digit level indicate that significant changes occurred in trade composition during this period. We use a measure of normalized trade balances, developed by Gagnon and Rose (1995). For the eight bilateral trade relationships, commodities representing from fifty to seventy percent of 1992 dollar trade have shown statistically significant changes in the magnitude and, in some cases, in the direction of normalized trade balances, over the thirty-year period. Results support the conclusion that changes in trade patterns in both low-tech industries, such as textiles and clothing, and more high-tech industries, such as electronic parts and electronic goods, were important in the development of the East Asian economies.

This paper examines the link between structural change and growth in India. It constructs indices of structural change, and performs a time series analysis of the data. It finds that 1988 marks a break in the time series of growth and structural change. There is one-way causality from structural change to growth in the period 1988-2007, whereas there is no evidence for this linkage before 1988.

In this study, we describe the challenges of managing Himalayan rivers as a result of climate change and the industrialization and economic growth of India and China. We discuss a range of conceptual issues relevant for negotiations over the management of Himalayan rivers. We introduce the concept of multi-track diplomacy, and apply it to the case of international river management, in the context of innovations incorporated in five international treaties signed in 1996 and 1997. We examine past problems with bilateralism in international river diplomacy, in particular as an obstacle to successful agreement and the potential of more multilateral approaches. We describe the wave of Himalayan water projects being designed and constructed at the beginning of the twenty-first century, based on earlier agreements as well as new initiatives. We note the subsequent implementation problems that have arisen, and the substantial issues that need to be addressed by an expanded group of countries depending on Himalayan rivers. Finally, we consider directions in which current innovations might be extended as bases of regional cooperation, using the multi-track diplomacy framework. We suggest that an independent regulatory agency could facilitate rational development, assist in the management of substantial uncertainties about future flows, and reduce the potential for conflict. We describe the possible structure and functioning of such a new institution.

We have certainly been living in interesting times. While avoiding the worst connotations of that concept (no global war or other catastrophe), we have seen the fall of communism, the rise of information technology, and the beginnings of a shift in the global economic balance, back toward the days before the industrial revolution, when Asia carried as much economic and political weight as the West. All three trends – the ostensible triumph of capitalism, the innovations wrought by digital technologies, and the growth of China and (to some extent) India – in some ways came to a head in the current financial crisis. The crisis was sudden, and at one stage seemed that it would engulf the world economy in depression and even chaos. It prompted some fevered writing, by journalists in particular. For my part, writing fortnightly columns for Indian financial dailies (first the Financial Express, then The Mint), I have seen my role as bringing analytical economic thought to bear on understanding current events. A column gives one some freedom to opine, but also imposes disciplines of concision and clarity, beyond the usual requirements of academia. The following dozen pieces were written between September 2007 and April 2009. They comment on the reasons for the crisis, and possible solutions, using economic theory to understand the issues wherever possible, but in relatively non-technical language. What keeps markets working well? What do financial markets accomplish, at a fundamental level? Why do markets fail? Why do scandals arise? What can regulators do to improve matters? I have tried to shed light on these basic questions in the context of current events. Along the way, I have had the temerity to take issue with Alan Greenspan, George Soros and Martin Wolf, all bigger names than I, but less well versed in the core principles of economic analysis. My sympathies lie with other professional economists: George Akerlof, Nouriel Roubini and Larry Summers come out well in these pieces, though I take issue with Summers’ implicit politics with respect to globalization. Several essays look at aspects of globalization, and view with optimism the potential of emerging economies. Another underlying theme is that the crisis was not about the collapse of capitalism, but rather arose from some specific failures of institutional design in so-called advanced economies. Getting this lesson right is critical for economies that want to go beyond being just “emerging.” Readers must judge if I have made my points clearly and convincingly enough.

This is a collection of essays written for the Financial Express, an Indian financial daily. There are several themes that I explore in these pieces. The most basic is that of the overall process of, and environment for economic growth in the Indian context. Another strand examines different sectors and their past or potential growth contributions. A third issue is one that often has dominated recent policy discussions in India, namely, how to make growth more inclusive or broad-based. This is related to a fourth theme of these essays, that of governance and policy making in India. A fifth theme of the essays is money and finance in India, again in the context of development and development policy. Finally, I comment on management and management education as a potential contributor to India’s growth. The essays sometimes cut across themes, but I have organized them loosely into these six categories. The two dozen or so pieces were written between May 2006 and January 2008, but I think they still have relevance, as the issues they explore are long-run questions about India’s economic growth and its sustainability. I have attempted to draw on economic analysis in assessing current issues, but the presentation is relatively non-technical.

This paper analyzes the process of reform of India’s federal system, with a focus on fiscal federalism. We first summarize the basic features of, and recent reforms in intergovernmental relations, including the role of political institutions, assignments of expenditure responsibility and revenue authority, the system of intergovernmental transfers, and institutions and mechanisms for government borrowing. We then discuss the institutional specifics of the reform process, to understand the dynamics of India’s federal system.

This paper provides a comparative assessment of fiscal decentralization in China and India, including the standard components of expenditure and revenue assignments and institutions for intergovernmental transfers, as well as the nature of subnational authorities over general economic activity. In particular, the case of China, where town and village enterprises have been very active, is contrasted with that of India, where local governments remain circumscribed in their authority, despite decentralizing reforms. The implications of differences in decentralization for fiscal outcomes and economic growth are discussed. The characterization of each country in terms of concepts of federalism, i.e., competitive, cooperative and market preserving federalism, is discussed, in attempting to abstract from the two cases to more general lessons for fiscal decentralization.

In this paper we investigate an example of a very widely applied model for the delivery of IT services to rural and poor populations. The model is one where limited intervention to support infrastructure and coordinate resources is combined with market-based delivery of IT services to the end user (what we call here the “sustainable franchise model”). Though this model has been deployed world-wide by governments, NGOs, and development institutions in the past few years, there has been little research into the determinants of success in such a model. In this paper we examine the example of n-Logue, a franchise of over 1000 locally-owned, Internet kiosks in rural villages in India. We seek to assess how this new sustainable franchise model has worked in practice by analyzing data from 74 of n-Logue’s kiosks. Among other things, we find that gender and education do not affect success, while location and other measures of social standing (age and caste) do. We also find that the uses that villagers have for IT services are not so different from those which first world users have. The lessons we draw from this example are that while local customs and practices must be taken into account (e.g. the caste system), it is not a foregone conclusion that social biases (e.g. against women) cannot be mitigated by good program design.