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.
Manufacturing has historically offered the fastest path out of poverty, but there is mounting evidence that this path may be all but closed to developing countries today. Some have suggested that services might provide a new path forward, while others have expressed skepticism about this claim and consequent pessimism over the future growth trajectories of developing countries. We contribute to debate this by using a multi-sector growth framework to establish five important criteria that any sector must exhibit in order to lead an economy to rapid, sustained, and inclusive development.
Value Subtraction in Public Sector Production: Accounting Versus Economic Cost of Primary Schooling in India - Working Paper 391
We combine newly created data on per student government expenditure on children in government elementary schools across India, data on per student expenditure by households on students attending private elementary schools, and the ASER measure of learning achievement of students in rural areas.
India’s Trade, Investment, and Industrial Policies: A Macro Assessment Testimony before the United States International Trade Commission
Arvind Subramanian testified before the United States International Trade Commission on February 12, 2014. Subramanian shared his thoughts on India’s trade, investment, and industrial policies and offered policy recommendations from both an economic and strategic perspective.
Arvind Subramanian testified before the Senate Banking Subcommittee on National Security and International Trade and Finance at a hearing on the investment climate and improving market access in financial services in India on September 25, 2013.
Arvind Subramanian testified before the Ways and Means Committee of the United States Congres hearing on US-India trade relations on March 13, 2013.
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.
Less Smoke, More Mirrors: Where India Really Stands on Solar Power and Other Renewables - Working Paper 204
After rejecting emissions caps, India seems poised to curb greenhouse gases on its own. Senior fellow David Wheeler calculates that a proposed new renewable energy standard would cause a massive shift of new power capacity within a decade.
This controversial book argues that irresistible demographic forces for greater international labor mobility are being checked by immovable anti-immigration ideas of rich-country citizens. Pritchett proposes breaking the gridlock through policies that support development while also being politically acceptable in rich countries. These include greater use of temporary worker permits, permit rationing, reliance on bilateral rather than multilateral agreements, and protection of migrants' fundamental human rights.
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.