Revisiting Development Disparities across the Indian States: In Quest of Evidence of Resource Curse

Main Article Content

Mofidul Hassan
MP Bezbaruah

Abstract

Despite a large number of studies going into the issue of income and developmental disparities across states in India, the possibility of resource curse being at the root of some states persistently lagging in development has rarely been probed. The present paper is aimed at filling this void in the literature. Economic common sense and writing of some eminent development economists suggest that regions endowed with resources should be in the advantaged position to grow fast and develop quickly. In reality, however, regions endowed richly with natural resources have often tended to lag– a phenomenon that has given rise to the resource curse hypothesis. Countries/regions rich in natural resources can be cursed if the easy and abundant resource revenue breeds moral hazards causing institutional weaknesses that allow rent-seeking and other anti-developmental processes to flourish. In the Indian context, persistent lagging behind of the resource-rich states of Odisha, Madhya Pradesh, Chhattisgarh, Assam, Jharkhand, and Bihar hints at resource curse casting a spell over these states. Using panel data on 17 major Indian states at decennial intervals from 1981 to 2011, evidence for probable resource curse has been explored while controlling for some common determinants of development. Results confirm evidence in support of resource curse dragging overall development attainment in most of the resource-rich states. On a positive note, however, it has been found that development attainment across India has advanced progressively, especially in the post-reform decades.


 

Downloads

Download data is not yet available.

Article Details

How to Cite
Hassan, M., & Bezbaruah, M. (2019). Revisiting Development Disparities across the Indian States: In Quest of Evidence of Resource Curse. Space and Culture, India, 7(1), 92-103. https://doi.org/10.20896/saci.v7i1.429
Section
Research

References

Acemoglu, D., Johnson, S., & Robinson, J.A. (2002). Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution. Quarterly Journal of Economics, 117, 1231-1294.
Ahluwalia, M. S., (2000). Economic Performance of states in Post-reforms Period. Economic and Political Weekly, 35(19), 1637-1648.
Auty, R.M., (1993). Sustaining development in resource economies: the resource curse thesis. London: Rutledge.
Auty, R.M., (2001). The political economy of resource-driven growth. European Economic Review, 45(4), 839-846.
Beck, T., (2011). Finance and Oil: Is there a resource curse in financial development? Discussion Paper, (2011-017). Tilburg University: Center for Economic Research.
Bhattacharya, B. B., & Sakthivel, S. (2004). Regional Growth and Disparity in India: Comparison of Pre- and Post-Reform Decades. Economic and Political Weekly, 39(10), 1071-1077.
Boschini, A. D., Pettersson, J., & Roine, J., (2007). Resource Curse or Not: A Question of Appropriability. Scandinavian Journal of Economics, 109(3), 593-617.
Brunnschweiler, C. N., & Bulte, E. H. (2008). The Resource Curse Revisited and Revised: A Tale of Paradoxes and Red Herrings. Journal of Environmental Economics and Management, 55(3), 248-264.
Das, S., Ghate, C., & Robertson, E. P. (2013). Remoteness and Unbalanced Growth: Understanding Divergence across Indian Districts (Working Paper No. 268). New Delhi: Indian Council for Research on International Economic Relations.
Dhar, P.N., & Sastry, D.U. (1969). Interstate variations in Industry, 1951-61. Economic and Political Weekly, 4(31), 535-38.
Dholakia, R., (1994). Spatial Dimension of Acceleration of Economic Growth in India. Economic and Political Weekly, 29(35), 2303-2309.
Gelb, A. H. (1988). Oil Windfalls: Blessing or curse? New York: Oxford University Press.
Ghosh, M. (2008). Economic Growth and Regional Convergence. In Economic Reforms and Indian Economic Development: Selected Essays. New Delhi: Bookwell Publications.
Gujarati, D. N., & Sangeetha. (2007). Basic Econometrics (Fourth ed.). New Delhi: Tata McGraw Hill Eduaction Private Limited, 656.
Iyengar, N. S., & Sudarshan, P. (1982). A Method of Classifying Regions from Multivariate Data. Economic and Political Weekly, 17(51), 2047-2052.
KMPG. (2015, September). Assessment of State Implementation of Business Reforms. Retrieved from https://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/State-Assessment-Report.pdf
Krugman, P. (1991), Geography and Trade. Cambridge, MA: MIT Press.
Kundu, A., & Varghese, K., (2010). Regional Inequality and Inclusive Growth in India under Globalisation, New Delhi: Oxfam India working paper series, September 2010.
Kurian, N.J. (2000).Widening Regional Disparities in India – Some Indicators. Economic and Political Weekly,35(7), 736-743.
Mehlum, H., Moene, K. & Torvik, R. (2006). Institutions and the Resource Curse. The Economic Journal, 116(508), 1-20.
Mundle, S., Chakraborty, P., Choudhury, S., & Sikdar, S. (2012). The Quality of Governance: How Have Indian States Performed?(Working paper No. 2012-104). New Delhi: National Institute of Public Finance and Policy. http://www.nipfp.org.in
Mundle, S., Chakraborty, P., Choudhury, S., & Sikdar, S. (2016). Governance Performance of Indian States: Changes between 2001–02 and 2011–12. Economic & Political Weekly, 51(36).
Myrdal, G. (1957). Economic Theory and Underdeveloped Regions. London: Duckworth.
Nair, K.R.G., (1983). Inter-state Income Differentials in India: 1970-71 to 1979-80. Man and Development, 5 (2).
Nayyar, G (2008). Economic Growth and Regional Inequality in India. Economic and Political Weekly, 43(6).
Ross, M. L., (1999). The political economy of the resource curse. World Politics,51(2), 297-322.
Shetty, S.L., (2003). Growth of SDP and Structural Changes in State Economies, Interstate Comparison. Economic and Political Weekly, 38(49), 5189-5200.
United Nations Development Programme, (2010). Human Development Report 2010, New York: Palgrave Macmillan, 216.
Williamson, J. G. (1965). Regional Inequality and Process of National Development: A Description of the Patterns. Economic Development and Cultural Change, 13(4), 2-84.