State, Business, and Economic Growth in India

For the past 25 years, India’s economy has grown at an average rate of nearly 6% annually. The widely embraced argument that this growth acceleration results from the Indian state’s adoption of a pro-market strategy is inadequate for two reasons: the higher growth rate began a full decade before the liberalizing 2reforms in 1991; and post-1991 industrial growth has not accelerated. Instead, India’s economy has grown briskly because the Indian state has prioritized growth since about 1980, and slowly embraced Indian capital as its main ruling ally. This pro-business growth strategy is likely to have adverse distributional and political consequences.     

Is there a long‐run relationship between population growth and living standards? The case of India

This note examines the existence of a long‐run, cointegrating relationship between population and per capita GDP in India for 1950–93. Unit root tests show that per capita GDP is integrated of order one while population is integrated of order zero; further, estimation of the bi‐variate relationship using the cointegration procedure of Johansen shows that no long‐run relationship exists. Thus, population growth neither causes per capita income growth nor is caused by it. A corollary is that population growth neither stimulates per capita income growth nor detracts from it.     

Sanitation and Religion in South Asia: What Accounts for Differences across Countries?

Exposure to open defecation has serious consequences for child mortality, health, and human capital development. South Asia has the highest rates of open defecation worldwide, and although the incidence declines as household income rises, differences across South Asian countries are not explained by differences in per capita income. The rate of open defecation in sub-national regions of Bangladesh, India and Nepal is highly correlated with the fraction of the population that identifies as Hindu, in part because certain rituals of purity and pollution discourage having latrines in close proximity to one’s home. Almost all open defecation occurs in rural areas, and this paper estimates how much the rate could be reduced if rural households in regions that have a higher fraction of Hindus, where open defecation is still common, altered their behaviour to reflect that of non-Hindu households in regions that are predominantly non-Hindu, where the rate of open defecation is much lower. Using nonparametric reweighting methods, this paper projects that rural open defecation in Bangladesh, India, and Nepal could be reduced to rates of between 6 and 8 per cent, compared to the prevailing level of 65 per cent.     

Economic growth and the population explosion: Simulation experiments using a growth model with population endogenous

The purpose of this analysis is to shed some light on the issue of how much economic growth, unaided by population control policies, can bring down fertility and defuse the population explosion in the less developed countries. The paper explores the demographic evolution of an ideal less developed country over a 100 years time span under alternative assumptions concerning capital accumulation, rate of technological progress, and returns to scale. The model used incorporates (a) a population projection matrix with coefficients which are a function of time and of endogenously generated levels of income per capita, and (b) a gross reproduction rate‐GNP per capita function with parameters estimated from a time series of cross sections spanning the period 1860 to 1959. This function was designed to reflect dominant traits of the historical experience concerning the effects of economic growth on fertility in a context characterised by the absence of population control policies.     

A test of the escape from the persistence of backwardness

A model was constructed and estimated for the Japanese economy from 1872 to 1937. Although the model is limited in scope due to limited data availability, it is capable of testing the escape from the trap hypothesis of which Japan is a popular candidate. An examination of the basic difference equation in all periods indicated that Japan did escape the trap during the period 1873–74. Care should be taken in evaluating the evidence. Clearly, the trap is not verified within the range of the data. Consequently, what appears to be evidence of an escape from the trap is suspicious. An economy could tend to move away from an unstable equilibrium level of per capita income without moving toward a low level stable equilibrium level of per capita income when the rate of change in per capita income is negative. But the evidence does support a turning point in Japan's efforts to develop. After 1873–74 Japan was able to achieve a sustained rise in per capita income. The results of this study identify an escape from a persistence of backwardness in terms of per capita income regardless of whether or not that escape was one from a low level equilibrium trap.     

Determinants of Personal Income Taxes for Barbados

The purpose of this study was to identify determinants of personal income taxes in Barbados and, using the Engle-Granger two-step procedures with annual data from 1976 to 2008, ascertain how these variables would impact on the dependent variable in the long and short run. The study showed that in the long run, the variables that would impact upon personal income tax receipts were marginal tax rate, real per capita income, and the rate of unemployment, while in the short run, personal income taxes were affected by current real per capita income in addition to lagged values of real per capita income, the marginal tax rate, and the rate of unemployment, respectively.     

Population and income: Is there a puzzle?

Abstract

This note presents wide evidence on the relationship between population and income for 125 countries for which data was available for the period 1950–2000. The main result is that there is a weak but negative relationship between population growth and per capita GDP, as income increases population expands at a slower rate. This relationship appears to be stronger for African countries and for Asian countries before 1970.     

Level of living and fertility among a rural population of the Philippines

This study examines the issue of whether the relationship of fertility to measures of economic resources is different at lower income levels than at higher levels. Testing was done in a rural Philippine setting in 1978-79. 3 measures of economic resources were utilized -- income, quality of housing, and provision of schooling for children. The data were drawn from a survey of rural families residing in 5 muncipalities of Iloilo province, on Panay Island in the central Philippines. In the study design, villages (or barangays) were selected from the 5 municipalities to obtain equal numbers of 3 agricultural types -- upland, rainfed lowland, and irrigated lowland farms. Interviews were conducted during a 4-month period in late 1978 and early 1979. Completed interviews of 1077 married women were obtained from 1066 households in 46 villages. These women were under age 50. The number of children ever born was used as the measure of fertility. To derive household income for the families in the survey both farm production and nonfarm income were converted into Philippine pesos. For a measure of housing quality, an index was formed based on 7 household items which could be considered amenities for the family and on the reported construction materials for 5 parts of the dwelling. This sample of households in the rural villages of Iloilo Province exhibited evidence of a threshold in the relationship between housing quality and fertility and between per capita income and fertility. For those families with per capita income less than 200 pesos per year, there was a strong positive relationship between 2 of the economic resource measures and fertility. This threshold for families of very low income showed support for the presence of limiting factors other than contraception. When the contracepting women of low income were removed from the analysis, the slope below the threshold became steeper. The poor nutrition and poor health that are associated with very low income can result in lower fecundity, thus biologically or nonvolitionally limiting fertility from what it could be with conditions of good health and nutrition. Among the families with higher per capita income, there was a negative relationship between per capita income and fertility. Housing quality yielded the strongest evidence of the threshold effect. Education of the children was not related to fertility in this model. Study findings indicate that for about 1/3 of this rural population initial increases in their economic level or living standard could result in increasing fertility up to a threshold level.     

Infant and child mortality in developing countries: Analysing the data for Robust determinants

Is development best achieved by going for growth, or does specific attention need to be paid to directly improving human welfare? In contrast to the Human Development Reports of the UNDP, the World Bank has stressed the growth approach. Recent work has reinforced this position by arguing that health spending is extremely ineffective in reducing infant or child mortality, which is mainly explained by a country's income per capita. This article contests this position through testing the robustness of determinants of infant and child mortality. We have estimated over 420,000 equations which show that, while income per capita is a robust determinant of infant and child mortality, so are indicators of health, education and gender inequality. Some health spending, such as immunisation, is thus shown to be cost effective way of saving lives. Our results are consistent with the view that much health spending in developing countries may be poorly targeted or otherwise ineffective, but do not support the position that public health strategies should not be given too great a role in pursuing improvements in human welfare.     

An Exploratory Analysis of Fertility Differentials in India

The association between improving economic conditions and declining growth of population has led economists and demographers to hypothesise a direct relationship between indicators of economic development and fertility rates. Using recent National Family Health Survey data and the 1991 Census to explore factors contributing to fertility rates in India, we found that economic variables explain 70 per cent of the interstate variations in India's fertility rates. However, several non-economic variables explain an even greater proportion, for example, indicators of female autonomy explain 84 per cent of the variations. Our analysis demonstrates that to successfully explain Indian fertility rates, models must rely heavily on non-economic variables.     

The Impact of War on Calorie Food Demand in Bangladesh

Daily per capita calorie intake in Bangladesh averaged almost 2,100 (kilo)calories in the 1960s but fell to 1,840 in 1972 following the war of independence in 1971, and only by 1987 did it reach 2,000 again. This article examines the long-run relationship between per capita income, food prices and per capita calorie intake using aggregate data for Bangladesh for 1962–97 and the recent cointegration procedure of Johansen et al., which permits structural breaks. Results show that a long-run relationship exists and that the war reduced average calorie intake permanently by 10 per cent. Impulse responses show that income Granger-causes calorie intake but not vice versa.     

Setting weights for aggregate indices: An application to the commitment to development index and human development index

Abstract

Aggregate indices like UNDP's Human Development Index (HDI) or the Centre for Global Development and Foreign Policy's Commitment to Development Index (CDI) are subject to multiple criticisms. This paper addresses concerns linked to the equal weights used in the HDI and the CDI and evaluates alternative weighting schemes. It relies on an opinion survey conducted electronically among researchers from 60 countries to assess whether or not professional judgment affects the use of equal weights. Results of the opinion survey point to a surprising result for the HDI: despite widespread criticism of equal weights, a simple scheme based on equal weights is not only convenient but also consistent with the views of experts. For some components of the CDI, however, weights derived from the survey do differ from equal weights. Nevertheless, the weights emerging from the survey are not sufficiently different from equal weights to significantly alter country rankings.     

What Has Driven the Great Fertility Decline in Developing Countries since 1960?

Several developing countries are currently experiencing a significant fertility decline, however, academic economists have paid little attention to this transition. This paper seeks to explain the fertility transition by infant mortality, urbanisation, income, culture and educational attainment of females and males using annual data for 92 developing countries over the period 1960–2014. External instruments are used to deal with endogeneity. The results suggest that increasing per capita income, improved female education and increasing secularisation have been important determinants for declining fertility in the developing world.     

Suicide,gender, and age variations in India. Are women in indian society protected from suicide?

A new set of data concerning the pattern of suicide in India between 1991-1997 are presented. Suicide rates rose over this period despite a small decline in the Indian suicide rate in 1995 and 1996. It was found that between 1995 and 1997 there was a modest fall in the suicide rates among under 29-year-olds of both sexes, and an increase among those 30 years and older. The pattern of suicides in India is bimodal: the incidence of suicides is highest for those in the 30-44-year-old category of both sexes and tends to decline in higher age categories. Suicide rates were nearly equal for young women and men, a contrast with the pattern of suicide sex ratios in eight developed countries.     

Computer Usage and Labour Regulation in India's Retail Sector

Abstract

A recent survey of 1,948 retail stores in India conducted by the World Bank's Enterprise surveys shows that 19 per cent of all stores use computers. In the state of Kerala, the figure is as high as 40 per cent. Using this survey, we estimate the effect of computer usage on labour employment. Our findings show that this effect depends on the stringency of the underlying labour laws. Stricter labour laws magnify the labour displacing effect of computers significantly.     

Population and development: fact,fancy and politics

Massive population growth is an accepted fact in developing countries at a time when developed, Western countries, i.e., the U.S., have become increasingly disenchanted with foreign aid. The gap between the very rich and very poor becomes wider and sharper. Most people live either in countries where the per capita income is below $320 or above $1,280. Lowering fertility rates would be favorable to economic conditions in the long run but with little short-run effect, population control is not a high priority government activity. The theme of the 1974 Bucharest Conference was that if development were encouraged, fertility would take care of itself. Programs which directly influence fertility rates are needed to improve development. Family planning programs are low cost compared to other development policies, and they improve maternal and child health. Women cannot be educated or employed unless they have the freedom of choice not to have children or when to have children. Western enthusiasm for fertility control has been met with suspicion in many devleoping areas. Western attitudes should be balanced by restructuring world trade and constructing relationships which would hasten economic development.     

Social discounting and the distribution of project benefits

The justification of discounting in project appraisal is often given as the diminishing marginal utility of increasing per capita GNP. However, rates of individual income growth vary greatly between project beneficiaries, implying different group discount rates. Use of average rates of income growth can seriously distort calculated present values of projects, particularly those of long duration.     

Estimating the Effects of Climate Shocks on Collective Violence: ARDL Evidence from India

This paper examines the causal relationship between climate shocks and collective violence in India using annual data over the period 1954–2006. We use the ARDL bounds testing approach to deal with problems of autocorrelation and non-stationarity of key variables. Rather than rainfall, we find that it is maximum temperature that has long and short run effects on collective violence, with unidirectional causality from temperature shocks to riots. A one standard deviation increase in maximum temperature over the long run average increases the number of riots by 55 per cent. Return to long run equilibrium after a temperature shock takes approximately 15 years. The insignificance of rainfall holds whether we consider rainfall levels or rainfall growth. Given the absence of long run relationships between income levels /growth and riots, it is unlikely that the income channel is the one through which climate affects riots in India. Instead, the evidence suggests a psychological channel through which temperature affects riots in India, with hotter temperatures being associated with increased levels of aggression.     

Poverty and Survival

A recent literature highlights the uncertainty concerning whether economic growth has any causal protective effect on health and survival. But equal rates of growth often deliver unequal rates of poverty reduction and absolute deprivation is more clearly relevant. Using state-level panel data for India, we contribute the first estimates of the impact of changes in poverty on infant survival. We identify a significant within-state relationship which persists conditional upon state income, indicating the size of survival gains from redistribution in favour of households below the poverty line. The poverty elasticity declines over time after 1981. It is invariant to controlling for income inequality but diminished upon controlling for education, fertility and state health expenditure, and eliminated once we introduce controls for omitted trends.     

Identities and the Indian state: An overview

The importance that IR theorists have traditionally given to sovereign statehood has decreased their ability to explain new issues of global heterogeneity and diversity. The need to explain the end of the cold war, the disintegration of the former Soviet Union and the revival of old identities as well as the eruption of ethnic conflict in various parts of the world has, therefore, led to the return of culture and identity in IR theory. The concept of nation-state in international relations is based on the assumption that humanity is divided into nations and each nation is entitled to a state of its own. Although a state can exist without a nation it does not have the same legitimacy as a nation-state. Thus post colonial states like India, which are often considered to have artificial boundaries and are made up of many ethnic groups, feel obliged to embark on nation-building and prove that they are a nation-state even though homogeneous nation-states are a dwindling minority. The rise of the BJP in India emphasises the importance of religious and cultural identities but still does not prove that India is a nation. There has always been a tension between national and subnational identities in India. Not everyone who lives within the territorial borders of India considers him/herself to be an Indian nationalist-for example, Kashmiris seeking independence. The central government has always been aware of this and has always given priority to the preservation of the unity and integrity of the country. Indeed the constitution of India, while giving recognition to the fact that India is a multi-ethnic state, does not given anyone the right to secede from the Union. However, it is difficult to say how far India has progressed in the past 50 years beyond mere political integration and towards the creation of a nation-state through the transfer of loyalties from regional or ethnic groups to the nation, whose legal expression is the Indian Union. In the long run this is the only thing that will preserve the Indian state as it exists today.