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What lessons does India offer for other countries? What is the appropriate role for outsiders in addressing continued poverty and widening inequality in a country that has regularly clocked about 7 percent annual per capita GDP growth with foreign reserves close to $300 billion? And what can the world reasonably expect such a nation, with ample financial resources but a huge poor population of its own, to contribute to solving global problems? The Center for Global Development’s research explores these issues and more.
The authors conduct a rigorous econometric
analysis of a civil conflict that the Indian Prime Minister has called the single biggest internal
security challenge ever faced by his country, the Maoist conflict.
In developing countries where elections are costly and accountability mechanisms weak, politicians often turn to illicit means of financing campaigns. This paper examines one such channel of illicit campaign finance: India’s real estate sector. Politicians and builders allegedly engage in a quid proquo, whereby the former park their illicit assets with the latter, and the latter rely on the former for favorable dispensation. At election time, however, builders need to re-route funds to politicians as a form of indirect election finance. One observable implication is that the demand for cement, the
indispensible raw material used in the sector, should contract during elections since builders need to inject funds into campaigns. Using a novel monthly-level data set, we demonstrate that cement
consumption does exhibit a political business cycle consistent with our hypothesis. Additional tests provide confidence in the robustness and interpretation of our findings.
Human capital flows from poor countries to rich countries are large and growing. A leading cause is the increasing skill-focus of immigration policy in a number of leading industrialized countries—a trend that is likely to intensify as rich countries age and competitive pressures build in knowledge-intensive sectors. The implications for development are complex and poorly understood.
In our research (a draft of which is available here: Khanna and Morales 2017) we show that the H-1B visa programme had a powerful impact on the US IT sector, and played a prominent role in spreading the boom to India.
There are two dominant narratives about taxation. In one, taxes are the “price we pay for a civilized society” (Oliver Wendell Holmes Jr.). In this view taxes are not a necessary evil (as in the pairing of “death and taxes” as inevitable) but a positive good: more taxes buy more “civilization.” The other view is that taxes are “tribute to Leviathan”—a pure involuntary extraction from those engaged in economic production to those who control coercive power producing no reciprocal benefit. In this view taxes are a bane of the civilized. We consider the question of taxes as price versus tribute for contemporary India.