begins one of the chapters of Dani Rodrik’s new book, One Economics, Many Recipes. In exploring this paradox, Rodrik lays out a broad critique of prevailing approaches to development policy, offers fresh ideas for countries seeking to improve their economic performance, and argues for important reforms

in Cambridge, Massachusetts. He then expressed his puzzlement at India’s growth acceleration having taken place in the eighties rather than after 1991, when systemic reforms were initiated. I responded that the fact that puzzled him was not a puzzle and was very well known to economists working on India. Most of them, including myself and my co-author Suresh Tendulkar (Srinivasan and Tendulkar 2003), attributed the acceleration to basically two factors: hesitant and limited reforms (relating to industrial licensing and foreign trade in particular, coupled with a significant depreciation of the real exchange rate from the mid-eighties) and fiscal expansionism (financed by borrowing at home and abroad) leading to Latin American-style debt-led growth. We pointed out that a number of factors in the late seventies including a comfortable stock of foodgrains in government hands (stocks of wheat and rice had grown from 2.6 million tones at the end of March 1973 to 11.1 million tones at the end of March 1983), inflow of remittances from Indian workers in West Asia after the second oil shock (private transfers (net) grew from $116 million in 1970-71 to $2.7 billion in 1980-81) and discovery of significant oil offshore in the West Coast emboldened the government to experiment with liberalization1. However, we argued that without systemic reforms, the accelerated growth of the 1980s was unsustainable and would have led, as it did, to the macroeconomic and balance of payments

Collins and Dani Rodrik, provided excellent comments and suggestions. I thank the Center for

Prepared for the Handbook of Development Economics, Vol. 5, edited by Dani Rodrik and Mark

Dani Rodrik as well as these two institutions for their kind hospitality. Of course, the usual disclaimer applies.

Written as a chapter in the Handbook of Development Economics, edited by Dani Rodrik and Mark Rosenzweig to be published by North Holland. We are grateful to Frederico Finan and Robert Putnam for providing us with their data to Mara Angelica Bautista for her research assistance and Dani Rodrik

Torsten Persson, Dani Rodrik and an anonymous referee for helpful comments, and Sebastian Brown for research assistance. The views expressed herein are those of the author(s) and not necessarily those of the

University Press, 2003. We thank the excellent feedback from the conference’s commentator on the paper, Simon Johnson, from its convener, Dani Rodrik, and from the conference participants.

Epstein acknowledges the financial support of the Ford and Rockefeller Foundations. In addition, we thank Arjun Jayadev and Peter Zawadzki for excellent research assistance and Jayadev for his contributions to the India case study. We are grateful to Professor Dani Rodrik for his help at the early

Dani Rodrik thanks the Carnegie Corporation of New York for financial support. For useful comments and suggestions, we thank Lee Alston, Mushfiq Mobarak, and David N. Weil. The usual disclaimer applies. The views expressed herein are those of the author(s) and not necessarily those of the National