{"id":149,"date":"2004-10-14T23:40:28","date_gmt":"2004-10-15T04:40:28","guid":{"rendered":"http:\/\/server97.snhdns.com\/~ravik\/wp\/?p=149"},"modified":"2004-10-14T23:40:28","modified_gmt":"2004-10-15T04:40:28","slug":"i-was-wrong-nehruvian-penalty-is-valid","status":"publish","type":"post","link":"https:\/\/www.ravikiran.com\/blog\/classic\/200410\/i-was-wrong-nehruvian-penalty-is-valid\/","title":{"rendered":"I was wrong. Nehruvian penalty is valid."},"content":{"rendered":"

Thanks to a commentor known only as Corrector of Maladies<\/a>, I was able to skim through the original report<\/a> by Goldman Sachs on which Rajeev Srinivasan based his article, and it turns out that I was thoroughly wrong, and unfair in my criticism of the author. The report does indeed do what Rajeev says it does, and I made a really bad mistake. The mistake I made was:
\n
\nIf you read page 18 of the report. which contains the assumptions of the model, you’ll see that the predicted GDP growth rate is entirely based on variables that are not dependent on policy. The variables that the GDP depends on are labour, “technical progress”, and capital stock at that point in time. Good policies help you achieve and exceed the growth rate, and bad policies prevent you from achieving it. So if you generate the predicted GDPs for the period from 1960 -2000, you will indeed find that countries that followed good policies scored close to, or exceeded their predicted GDP, and countries that had bad policies did worse than the predicted GDP. The report specifically mentions India and Argentina, which did badly because of bad policies. In India’s case, it did much much worse than its potential, and crores of Indians remain poor as a result. Rajeev Srinivasan correctly calls it the Nehru Penalty. <\/p>\n

I misunderstood his article, because it gave me the wrong impression that the model predicts the GDP growth rate based on assumptions about what policies will be followed. That is what turned out to be wrong. <\/p>\n

I realise that there is a lot of crow to be eaten, and I would have gladly done that if I weren’t vegetarian. Apologies are due to 7*6 with whom I fought a pointless fight based on a misuderstanding, to Shyam Nair<\/a> whose post I nitpicked and a whole bunch of others, with whom I fought in my earlier posts. Incredible as it may sound, I’ve written two <\/a> earlier posts<\/a> on the same topic. <\/p>\n

The only saving grace is that now I can truthfully say to defenders of Nehru that I sincerely tried to be fair to him and look where it got me. Yes, this is an effective answer to all those who claimed that Nehru “built an infrastructure for India’s future development. I can now take grim satisfaction in saying that they are bullshitting.<\/p>\n","protected":false},"excerpt":{"rendered":"

Thanks to a commentor known only as Corrector of Maladies, I was able to skim through the original report by Goldman Sachs on which Rajeev Srinivasan based his article, and it turns out that I was thoroughly wrong, and unfair in my criticism of the author. The report does indeed do what Rajeev says it […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/posts\/149"}],"collection":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/comments?post=149"}],"version-history":[{"count":0,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/posts\/149\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/media?parent=149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/categories?post=149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ravikiran.com\/blog\/wp-json\/wp\/v2\/tags?post=149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}