Institutions and Politics: To Harness Knowledge

Directly or indirectly, a recurring theme in my work has been the role of "learning." When I started thinking about learning, a common characterization was graph generally attributed to the Boston Consulting Group that showed declining costs with increase in cumulative output. The cost decline was attributed to learning, which was a felicitous by-product of continuing production. Having witnessed Indian industry produce without learning, I could not relate to this simple characterization. As such, I explored the implications, in a dynamic context when learning was not a simple by-product of output and was expensive to acquire.

Later, I became more interested in institutional arrangements that reduced the costs of learning. The institutional forms I studied included conglomerates in Korea, long-term buyer-supplier relationships in international markets, product development alliances between firms, and intellectual property regimes. Beyond prices and quantities, policymakers can and do influence the evolution of institutions. Making these choices, recognizing their long-term implications, is an important, though imperfectly understood, challenge.

"Firm strategies for costly learning," Management Science, 35(4): 496-512, April 1989.

"Institutions and dynamic comparative advantage: the electronics industry in South Korea and Taiwan," Cambridge Journal of Economics, 14: 291-314, September 1990.

"New Environment for Intellectual Property," in F.W. Rushing and C. Ganz Brown, ed., Intellectual Property Rights in Science, Technology, and Economic Performance: International Comparisons, Boulder-San Francisco-London, 1990.

"Buyer-seller links in export development," World Development, 20(3): 321-334, March 1992, with Mary Lou Egan.

"Staying in the Loop," World Bank Discussion Papers 61, Washington D.C., The World Bank.

"Learning through alliances," Journal of Economic Behavior and Organization, 20: 151-170, February 1993.

"Making institutional choices," in Pranab Bardhan, Mrinal Datta-Chaudhuri, and T.N. Krishnan, ed., Development and Change: Essays in Honour of K.N. Raj, Bombay: Oxford University Press, 1993.

"Environmental regulation and development: a cross-country empirical analysist," Oxford Development Studies, 29 (2): 173-187, June 2001. Revision of Policy Research Working Paper 1448, The World Bank, Washington D.C., April 1995, with Susmita Dasgupta, Subhendu Roy, and David Wheeler.

"Innovation and international diffusion of environmentally responsive technology," Research Policy, 25: 549-571, June 1996, with Jean Olson Lanjouw.

"Industrial policy after the East Asian crisis: from outward orientation to new internal capabilities?"  November 1998.

International Public Goods: Incentives, Measurement, and Financing, Kluwer Academic Publishers, Boston, and World Bank, Washington, D.C., edited with Marco Ferroni, 2002.

"Can Budget Institutions Counteract Fiscal Indiscipline?" Economic Policy October 2006: 689–739; earlier version as International Monetary Fund Working Paper WP/06/123,  May 2006, with Stefania Fabrizio.

"The Demographic Dividend: Evidence from the Indian States," IMF Working Paper, WP/11/38, February 2011, with Shekhar Aiyar

"Sources of Corporate Profits in India - Business Dynamism or Advantages of Entrenchment?," IMF Working Paper, WP/11/8, January 2011, with Anusha Nath and Michael Walton

"The Second Transition: Eastern Europe in Perspective," Paper prepared for the Workshop: "Five years of an enlarged EU – a positive-sum game" Brussels, 13-14 November 2008, European Economy Economic Papers 366, March 2009,, also as IMF Working Paper, WP/09/43, March 2009, with Stefania Fabrizio and Daniel Leigh.

"Speed of IMF Response," an earlier version appeared as "From Crisis to IMF-Supported Program: Does democracy impede the speed required by financial markets?" IMF Working Paper, WP/08/276, December 2008, with Diego Saravia.

"Breaking the Impediments to Budgetary Reforms: Evidence from Europe," Economics and Politics 22(3): 362–391, November 2010, an earlier version appeared as IMF Working Paper, WP/08/82, March 2008, with Stefania Fabrizio.