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Growth, trade, development, institutions, aid, oil, India, Africa, the WTO, intellectual property
Arvind Subramanian is a senior fellow (on leave) at the Center for Global Development. He is the chief economic advisor to the government of India.
Greenprint: A New Approach to Cooperation on Climate Change, written with Aaditya Mattoo, was published by CGD in 2012; Eclipse: Living in the Shadow of China's Economic Dominance was published in September 2011. Foreign Policy named him one of the world's top 100 global thinkers in 2011. India Today magazine named him one of India’s top 35 “Masters of the Mind” over the last 35 years.
He has written on growth, trade, development, institutions, aid, oil, India, China, Africa, and the World Trade Organization. He has published widely in academic and other journals, including the American Economic Review (Papers and Proceedings), Review of Economics and Statistics, Journal of International Economics, Journal of Monetary Economics, Journal of Public Economics, Journal of Economic Growth, Journal of Development Economics, Brookings Papers on Economic Activity, Oxford Review of Economic Policy, International Monetary Fund Staff Papers, Foreign Affairs, World Economy, and Economic and Political Weekly. He is currently ranked among the top 2 percent of the world’s academic economists in terms of citations of academic research, according to the widely used REPEC rankings.
He has also published or been cited in leading magazines and newspapers, including the Economist, Financial Times, Washington Post, New York Times, Wall Street Journal, Newsweek, and New York Review of Books. He contributes frequently to the Financial Times and is a columnist for India's leading financial daily, Business Standard.
He advises the Indian government in different capacities, including as a member of the Finance Minister's Expert Group on the G-20. Subramanian was assistant director in the Research Department of the International Monetary Fund. He served at the GATT (1988–92) during the Uruguay Round of trade negotiations and taught at Harvard University's Kennedy School of Government (1999–2000) and at Johns Hopkins' School for Advanced International Studies (2008–10).
He obtained his undergraduate degree from St. Stephens College, Delhi; his MBA from the Indian Institute of Management at Ahmedabad, India; and his M.Phil. and D.Phil. from the University of Oxford, UK.
“Does Aid Affect Governance?” American Economic Review Papers and Proceedings, (with Raghuram Rajan), May 2007.
“Africa’s Growth Prospects: Benchmarking the Constraints,” NBER Working Paper, 13120 (with Simon Johnson and Jonathan Ostry).
“Foreign Capital and Economic Development,” Brookings Papers on Economic Activity, March 2007, (with Eswar Prasad and Raghuram Rajan).
“How to Help Poor Countries,” Foreign Affairs, (with Nancy Birdsall and Dani Rodrik), 2005.
“Aid and Growth: What Does the Cross-Section Evidence Really Show?” National Bureau of Economic Research (NBER) Working Paper, No. 11513, (with Raghuram Rajan), 2005; forthcoming Review of Economics and Statistics.
“What Undermines Aid’s Impact on Growth,” NBER Working Paper, No. 11657, (with Raghuram Rajan), 2005.
“Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development,” Journal of Economic Growth, (with Dani Rodrik and Francesco Trebbi), 2004.
“Saving Iraq from its Oil,” Foreign Affairs, (with Nancy Birdsall), 2004.
“What Determines Long-Run Macroeconomic Stability? Democratic Institutions,” IMF Working Staff Papers, (with Shanker Satyanath), 2007.
“The Natural Resource Curse: An Illustration from Nigeria,” NBER Working Paper, with Xavier Sala-i-Martin), 2003.
“The Primacy of Institutions and What it does or does not Mean,” Finance and Development, (with Dani Rodrik), June 2003.
“Who can Explain the Mauritian Miracle: Meade, Romer, Sachs or Rodrik,” In Search of Prosperity, edited by Dani Rodrik, Princeton University Press, (with Devesh Roy), 2002.
“Policies, Enforcement, and Customs Evasion: Evidence from India,” IMF Working Paper, (with Prachi Mishra and Petia Topalova), forthcoming.
“The Intriguing Relationship between Growth and Institutions in India,” Oxford Review of Economic Policy, forthcoming.
“India’s Pattern of Development: What Happened, What Follows,” Journal of Monetary Economics, (with K. Kochhar, U. Kumar, R. Rajan, and I. Tokatlidis), 2006.
“From ‘Hindu Growth’ to Productivity Surge: The Mystery of the Indian Growth Transition,” IMF Staff Papers, (with Dani Rodrik), 2004.
“Why India can grow at 7 Percent a year or More?” Economic and Political Weekly, (with Dani Rodrik), 2004.
Trade and Intellectual Property
“The WTO promotes trade strongly, but unevenly,” Journal of International Economics, (with Shang-Jin Wei), 2007.
“Why Prospects for Doha Trade Talks are not Bright?” Finance and Development, (with Aaditya Mattoo), March 2005.
“Medicines, Patents and TRIPs,” Finance and Development, March 2004.
“The Africa Growth and Opportunity Act and Its Rules of Origin: Generosity Undermined?” The World Economy, Vol. 26, No. 6, (with Aaditya Mattoo and Devesh Roy), 2003.
“The WTO and Poorest Countries: The Stark Reality,” World Trade Review, (with Aaditya Mattoo), 2003.
“Measuring Services Trade Liberalization and Its Impact on Economic Growth: An Illustration,” Journal of Economic Integration, (with Aaditya Mattoo and Randeep Rathindran), 2002.
“Dynamic Gains from Trade – Evidence from South Africa,” IMF Staff Papers Vol. 48 No. 1, (with Gunnar Jonsson), 2001.
“Can TRIPS Serve as An Enforcement Device in the WTO?” Journal of International Economic Law, (with J. Watal), 2000.
“Trade and the Environment: A Nearly Empty Box?” The World Economy, 1992.
“TRIPs and the Paradigm of the GATT: A Tropical, Temperate View,” World Economy, 1990.
“The International Economics of Intellectual Property Right Protection: A Welfare-Theoretic Trade Policy Analysis,” World Development, Vol. 19, No. 8.
“Regulatory Autonomy and Multilateral Disciplines: the Dilemma and a Possible Resolution,” Journal of International Economic Law, Vol. 9 No. 2, (with Aaditya Mattoo.)
India: Trade and Intellectual Property
“India as User and Creator of Intellectual Property: The Challenges Post-Doha,” in India and the WTO, edited by A. Mattoo and R. Stern, World Bank), 2003.
“India and the Multilateral Trading System Post-Doha: Defensive or Proactive?” in India and the WTO, edited by A. Mattoo and R. Stern, World Bank, (with A. Mattoo), 2003.
“The Case for a US-India Free Trade Agreement,” Economic and Political Weekly, (with A. Mattoo), 2003.
“Putting Some Numbers on the TRIPS Pharmaceutical Debate,” International Journal of Technology Management, 1994.
Book, op-eds and other
“Efficiency, Equity, and Legitimacy: The Multilateral Trading System at the Millenium,” Brookings/Harvard University Press, (edited with Roger Porter and Pierre Sauvé), 2002.
Profile of Paul Krugman: “Economist as Crusader,” Finance and Development, June 2006.
“The Bangalore Bug,” op-ed in the Financial Times, (with Raghuram Rajan), 2006.
“China’s exchange rate,” op-ed in the Financial Times, (with Raghuram Rajan), 2005.
Profile of Jagdish Bhagwati: “The Globalization Guru,” Finance and Development, September 2005.
“This important book sets a sensible and specific way forward. It should be read by all involved in economic development and international action on climate change.”
—Lord Nicholas Stern, author of the Stern Review
Senior fellow Arvind Subramanian writes a piece for the Financial Times with Martin Kessler on the rise of the renminbi as a reference currency.
The following op-ed originally appeared in The Financial Times..
The Republican presidential candidate Mitt Romney last week repeated his promise to declare China a currency manipulator on his first day in office. Even discounting the “get tough on China” bluster of the campaign season, this remark encapsulates American distance from, and denial about, changing economic realities. Would-be US leaders would do well to note that for probably the first time since the second world war the dollar bloc in east Asia has been displaced. In its wake a currency bloc based on China’s renminbi is emerging.
In new research, we find that since the global financial crisis, as the US and Europe have struggled economically, the renminbi has increasingly become a reference currency (meaning emerging market exchange rates move closely with it). In fact, since June 2010 when the renminbi resumed floating, the number of currencies tracking it has increased compared with the earlier period of flexibility between July 2005 and 2008. Over the same period, the number tracking the euro and the dollar declined.
East Asia is now a renminbi bloc because the currencies of seven out of 10 countries in the region – including South Korea, Indonesia, Taiwan, Malaysia, Singapore and Thailand – track the renminbi more closely than the US dollar. For example, since the middle of 2010, the Korean won and the renminbi have appreciated by similar amounts against the dollar. Only three economies in the group – Hong Kong, Vietnam and Mongolia – still have currencies following the dollar more closely than the renminbi.
This shift stems from China’s rise as a trader; its share of east Asian countries’ manufacturing trade has risen from 2 per cent in 1991 to about 22 per cent today. Countries that sell to the growing Chinese market or are locked in supply chains centred on China see the advantages of maintaining a stable exchange rate against the renminbi.
Trade is also propelling the rise of the renminbi outside east Asia. For example, the currencies of India, Chile, Israel, South Africa and Turkey all now follow the renminbi closely; in some cases, more so than the dollar. If China were to liberalise its financial and currency markets, the lure of the renminbi would broaden and quicken.
This development has two implications. First, it is one more important marker in the shift of economic dominance away from the US and towards China. Not only is China, by some measures, the world’s largest economy in purchasing power parity terms, the world’s largest exporter and the world’s largest net creditor (for more than a decade), but the renminbi bloc has now displaced the dollar bloc in Asia. The symbolism and its historic significance cannot be understated because east Asia, despite physical distance, has always been part of the dollar backyard.
America optimists invoke the rise and fall of Japan over the past few decades to suggest that China’s rise today will go Japan’s way, ensuring the continuation of Pax Americana. But they should take note that even during the heady days of the Japanese miracle, the yen never came close to rivalling the dollar as a reference currency. There was never anything close to a yen bloc in east Asia.
Second, and related to the above, is that this shift highlights the conflicting tugs that east Asian countries will face. The gravitational forces of economics, trade and now currency are drawing these countries closer to China. But Chinese shenanigans in relation to politics and security have repelled these countries into America’s embrace, reflected most vividly in the latter’s pivot-to-Asia strategy. The old saying is that politics trumps in the short run but economics wins in the long run. If true, the strategy of relying on China for butter and on America for guns will be a difficult balancing act to pull off.
The message for the next US president is clear: America’s top priority should be internal economic regeneration rather than targeting China’s currency or other policies. The urgency of the message is underlined by the reality that this regeneration is a necessary but by no means sufficient condition for retaining American pre-eminence in the face of China’s rise.
Read it here.
Reliance on natural resource revenues, particularly oil, is often associated with bad governance, corruption, and poverty. Worried about the effect of oil on Alaska, Governor Jay Hammond had a simple yet revolutionary idea: let citizens have a direct stake. Thirty years later, Hammond’s vision is still influencing oil policies throughout the world.
This piece originally appeared in the Financial Times on September 23, 2012 (gated) and is posted here with permission.
The Indian government’s recent reforms to reduce government subsidies and embrace greater foreign direct investment were unexpected and bold. Markets have rewarded them with surging stock prices and a rebound in the value of the rupee. The reforms may yet be reversed or diluted because of the political backlash. Their impact may be more symbolic than substantive. Nevertheless, they are significant in that they reflect changes in the operating assumptions of Indian politics.
Surprisingly little is known about how Indias shift from a state-dominated to a market-driven economy is influencing the issue of caste. Kapur will present a new paper, co-authored with Lant Pritchett, that draws on a unique survey designed and implemented by Dalits (formerly called Untouchables). The survey captures changes in socially structured inequality since the 1990s that are important to Dalit households but typically overlooked in surveys that focus on conventional measures of well-being.
*This is the first in a planned series of seminars organized by CGD's Understanding India initiative, which explores India's development challenges and experiences and the lessons they might offer for other developing countries.
In the last of a series of three blog posts looking at the implications of complexity theory for development, Owen Barder and Ben Ramalingam look at the implications of complexity for the trend towards results-based management in development cooperation. They argue that is a common mistake to see a contradiction between recognising complexity and focusing on results: on the contrary, complexity provides a powerful reason for pursuing the results agenda, but it has to be done in ways which reflect the context. In the 2012 Kapuscinski lecture Owen argued that economic and political systems can best be thought of as complex adaptive systems, and that development should be understood as an emergent property of those systems. As explained in detail in Ben’s forthcoming book, these interactive systems are made up of adaptive actors, whose actions are a self-organised search for fitness on a shifting landscape. Systems like this undergo change in dynamic, non-linear ways; characterised by explosive surprises and tipping points as well as periods of relative stability. If development arises from the interactions of a dynamic and unpredictable system, you might draw the conclusion that it makes no sense to try to assess or measure the results of particular development interventions. That would be the wrong conclusion to reach. While the complexity of development implies a different way of thinking about evaluation, accountability and results, it also means that the ‘results agenda’ is more important than ever.
Arvind Subramanian testified before the Joint Economic Committee at a hearing titled “Manufacturing in the USA: How Trade Policy Offshores Jobs” on September 21, 2011. Subramanian’s testimony focused on the US-China trade relationship.
This post also appears on the Peterson Institute for International Economics Real Time Economics Watch.
In Lord Richard Attenborough’s movie Gandhi, an underling of the British Empire heatedly warns his supercilious boss that Mahatma Gandhi’s impending protest march to the sea poses a far greater threat than the Raj realizes: “Salt, sir, is a symbol.” This elicits the memorable sneering put-down from the boss (played by Sir John Gielgud): “Don’t patronize me, Charles.”
In this working paper, the authors shed light on systemic problems of variability and valuation in the Penn World Table GDP estimates that distort cross-country comparisons of the data. They propose creating a new chained series that values all data at PPP prices and makes better use of disaggregated data for different benchmark years to overcome the limitations.
The Economist features a book review of Senior Fellow Arvind Subramanian's latest book, Greenprint.
From the review:
Greenprint: A New Approach to Cooperation on Climate Change. By Aaditya Mattoo and Arvind Subramanian. Brookings Institution Press; 150 pages; $17.99. Buy from Amazon.com
MOST books about the environment take the West as their starting point. This is understandable. For decades America was the world’s biggest polluter, contributing more to the problem than any other country, whereas Europe—at least in its politicians’ minds—has model environmental laws and holds plenty of righteous talks to negotiate new solutions.
But Europe and America are becoming supporting actors in the world’s climate-change drama. The lead players are China and India. China is the world’s largest emitter, contributing nearly a quarter of current global emissions. With India it accounted for 83% of the worldwide increase in carbon emissions in 2000-11. Though global warming began with industrialised countries it must end—if it is to end—through actions in developing ones. All the more reason to welcome “Greenprint”, the first book on climate change to concentrate on this growing part of the problem. Written by Aaditya Mattoo and Arvind Subramanian, two Indian economists based in Washington, DC, the book offers an unflinching look at what one might realistically expect emerging markets to do.
The West, the authors argue, has failed to mitigate global warming, so developing countries will have to take over. This is necessary, they say, because global warming will affect developing countries more than rich ones, partly because tropical and subtropical lands are more sensitive to warming than cold or temperate ones, and partly because rich people can afford better flood controls and drought-resistant seeds than poor ones.
Read it here.