Arvind vs. Arvind on India's Growth Surge

The Economist recently published a lively review of India's Turn: Understanding the Economic Transformation, by Arvind Subramanian, a senior fellow at CGD and the Peterson Institute. The clever headline of the review, Arvind vs. Arvind, refers to the slightly different take on India's recent success of Arvind Panagariya, well-known trade theorist and proponent of what used to be called conventional economic wisdom on trade (i.e. maximally liberal and multilateral), and Arvind Subramanian, who "relishes anomaliies and idiosyncracies that test the conventional wisdom of his discipline and his Washington confreres."In a nutshell, Arvind P says India took off when it liberalized its trade, invited in foreign investors, and liberated its industrial sector from onerous licensing and regulation. Arvind S says India's take-off was seeded earlier in the 1980s, when Indira Gandhi's government signaled a new business-friendly environment for existing industries, generating some investor interest and sparking a take-off that was then sustained by the market-friendly reforms of 1991. (For more on this, see Subramanian’s paper with Dani Rodrik, From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition.This argument amounts to a more subtle and intriguing re-run of the battle over the Washington Consensus. Arvind P says it worked in India. Arvind S may not be so sure. Read the Arvind S book (the Economist says his "…contrarian bent is refreshing and sometimes rewarding") and see what you think. It's a great way to keep on top of the ongoing (subtle) controversy about the role of conventional market reforms in explaining why some poor countries have grown lots, and some less.