The Return of the Washington Consensus? William Easterly, Good Economic Policy, and Economic Growth in India

This paper engages with a specific effort by Easterly (2019) to solve the liberalization–economic growth paradox. Focusing on India's liberalization in 1991, it questions Easterly's analysis on several fronts. Firstly, it argues that the growth paradox diminishes when more rigorous empirical methods are applied. Secondly, it contends that Easterly's metrics fail to capture India's reform efforts adequately. Thirdly, it suggests that while Easterly posits a delayed effect of good policy, the actual delay lies in realizing the benefits of such policies due to various factors like the need for complementary policies and the time it takes for firm-level impacts to manifest at the macro level. Lastly, it critiques Easterly's linkage of rapid growth in the 1990s solely to better economic policy, highlighting the need to consider sustained growth and the interplay between growth and institutions for a comprehensive understanding of India's economic trajectory since 1980.