Table Of ContentCreative Economy
Kazuo Mino
Tadashi Yagi Editors
Cultural Basis
of Economic
Growth in
India
Creative Economy
SeriesEditors
StephenHill,UniversityofWollongong,Wollongong,NSW,Australia
KazuoNishimura,RIEB,KobeUniversity,Kobe,Japan
TadashiYagi,FacultyofEconomics,ImadegawaCampus,DoshishaUniversity,
Kyoto,Japan
EditorialBoard
NobukoKawashima ,FacultyofEconomics,DoshishaUniversity,Kyoto,Japan
SébastienLechevalier,ÉcoledesHautesÉtudesenSciences,Paris,France
YoshifumiNakata,DoshishaUniversity,Kyoto,Japan
AndyPratt,UniversityofCityLondon,London,UK
MasayukiSasaki,GraduateSchoolofEconomics,DoshishaUniversity,Kyoto,
Japan
ToshiakiTachibanaki,FacultyofEconomics,DoshishaUniversity,Kyoto,Japan
MakotoYano,ResearchInstituteofEconomy,Trade&Industry(RIETI),Tokyo,
Japan
RobertoZanola,UniversitàdelPiemonteOrientale,Alessandria,Italy
This book series covers research on creative economies based on humanity and
spirituality to enhance the competitiveness, sustainability, peace, and fairness of
international society. We define a creative economy as a socio-economic system
that promotes those creative activities with a high market value and leads to the
improvementofsociety’soverallwell-being.
As the global economy has developed, we have seen severe competition and
polarizationinincomedistribution.Withthisdrasticchangeintheeconomicsystem,
creativity with a high market value has come to be considered the main source
of competiveness. But in addition to the improvement of competitiveness, we are
requiredtoworktowardfairnessinsociety.
In the process of developing a mature market, consumers come to understand
thatwhattheyrequiremostessentiallyishumanityandspirituality.Thiscannotbe
given or bought, but requires sharing with others across cultures and learning and
developingfurtherfromtheirrichness.Long-termsustainabilityofacompanyinthis
newagealsorequiresbuildingthesamevaluesofhumanityandspiritualitywithin
itsowninternalorganizationalcultureandpractices.
Through this series, we intend to propose various policy recommendations that
contribute to the prosperity of international society and improve the well-being of
mankindbyclarifyingtheconcreteactionsthatareneeded.
·
Kazuo Mino Tadashi Yagi
Editors
The Cultural Basis
of Economic Growth in India
Editors
KazuoMino TadashiYagi
InstituteofEconomicResearch FacultyofEconomics
KyotoUniversity DoshishaUniversity
Kyoto,Japan Kyoto,Japan
ISSN 2364-9186 ISSN 2364-9445 (electronic)
CreativeEconomy
ISBN 978-981-15-9304-8 ISBN 978-981-15-9305-5 (eBook)
https://doi.org/10.1007/978-981-15-9305-5
©SpringerNatureSingaporePteLtd.2022
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Preface
Thisbookisbasedonajointresearchprojectconductedbytheauthorsfrom2016to
2018.OurresearchwasfinanciallysupportedbytheJapanSocietyforthePromotion
ofScience(JSPSGrant-inAidforScientificResearch,projectnumber:16KT0089).
ThecentralpurposeofourprojectistostudyeconomicgrowthinIndiafromabroader
perspective than that of conventional economics research. In particular, we focus
on the cultural basis behind the recent remarkable growth of the Indian economy.
The standard growth economics usually ignores cultural differences in economies
to focus on the general mechanics of economic growth. We maintain that such an
approach may be insufficient for exploring economic growth in India because the
IndianeconomyhasdistinctiveculturalfeaturesthatarenotobservedinotherAsian
countries. The traditions related to value judgment on various life matters such as
marriage,religion,gender,andsoonaffectconsumers’behaviorandworkingenvi-
ronment. They also affect the competitiveness of the economy and the well-being
ofpeople.Sinceourstudyneedsaninterdisciplinaryinvestigation,theparticipants
oftheprojectareeconomicsresearchersinvariousfieldssuchaspubliceconomics,
fiscalpolicy,macroeconomics,industrialorganization,andsocio-economics,aswell
asanexpertinanthropologicalandhistoricalstudiesonSouthAsiaingeneraland
onIndiainparticular.
IntheChap.1,AkioTanabecharacterizeseconomicdevelopmentinSouthAsia,
with a particular focus on India from the post-World War II period to the present.
The author emphasizes that India is a diverse society in which various individuals
andgroupsfromdifferentsocialbackgroundsinteractwitheachother.Hence,unlike
efficiency-orienteddevelopmentinWesternandEastAsiancounties,Indiaandother
SouthAsiancountrieshaveexperienceddiversity-drivendevelopment.Tanabefirst
discusses Indian history in the early modern era as a process of diversification.
HearguesthatIndia,afterexperiencingcolonialandpostcolonialdiversions,recon-
vergedtothisdevelopmentpathfromthe1990swhendemocratizationandcontinuing
growthweresimultaneouslyrealized.
The Chap. 2, written by Kazuo Mino, studies the linkage between economic
growth and industrial structural transformation in India. As in other developing
economies, the income share of the agricultural sector in India continues to
v
vi Preface
decreaseastheeconomygrows.However,comparedtootherdevelopingeconomies
such as China, the employment share of the agricultural sector in India has not
decreasedmuch.Sincethestandardneoclassicalgrowthmodelsfailtoexplainsuch
aphenomenon,Minoconstructsamultisectorgrowthmodelinwhichtherearefric-
tionsinlabormarketsthatmaypreventasmoothsectoralshiftofworkerswhopossess
heterogeneousabilities.Itisshownthatthemodelmaycapturethepatternsofstruc-
turalchangeinIndia.Theauthoralsoconsidersculturalandinstitutionalfactorsthat
maygiverisetolabormarketfrictions.
While the first two chapters discuss the baseline features of India’s economic
growth, the subsequent chapters use micro-level information to characterize the
behavior of the Indian people. Specifically, those chapters reconsider the standard
view that well-being mostly depends on the level of consumption, so that the per
capitaincomeandconsumptionarethemostimportantcriteriatoevaluatethegrowth
performanceofaneconomy.InChap.3,YoshioItabafirstpresentsanoverviewof
the large-scale survey on well-being in India conducted by our project in 2017.
Thissurveypaysparticularattentiontotheevaluationofexternalandenvironmental
factorsrepresentedassocialcapital.Itabaempiricallyanalyzesthekeydeterminants
ofsocialcapitalandconfirmsthatthelevelofsocialcapitalhasstatisticallysignificant
effectsonthehappinessandlifesatisfactionoftheIndianpeople.
InChap.4,TadashiYagistudiesthedifferencesinthedeterminantsofwell-being
betweenIndiaandJapan.BasedontheWorldValueSurvey,Yagifirstcomparesthe
values emphasized by people in major regions and examines the relevant determi-
nantsofwell-beinginIndia.Then,heutilizesthesurveydataofourprojectandhis
foregoingresearchonhappinessinJapantocomparethedeterminantsofhappiness
in India and Japan. His econometric study reveals that the major determinants of
happiness for the Japanese people are income, wealth, and length of leisure time,
whereas in India, social status and a high level of activity in the community are
relevantdeterminantsofhappiness.
Chapter 5 by Kanako Takimoto and Akihiko Kawaura is a study of happiness
of women in India. The authors first point out that the gender gap in India is still
quitelargecomparedtotheworldaverage,andithasrecentlywidenedfurther.They
conduct an empirical analysis based on data provided by Asia Barometer as well
as by our survey to explore the determinants of Indian women’s well-being. The
authors find that other than income level, marital status, employment status, and
healthconditiongreatlyaffectthelevelofhappinessofIndianwomen.
In the final chapter, Sayaka Sakoda, Ryuichi Fukuhara, and Pramod Tiwari
focus on a traditional folk dance drama performed by a tribe in Rajasthan, India.
It has often been claimed that the poor in India tend to spend too much money
and time on local religious events, which is one of the reasons why they are still
trapped in poverty. Based on their survey data and field research, the authors cast
doubtonsuchaconventionalview.Theireconometricanalysisonthespecificevent
suggests that spending money and time on performing the drama does not stem
from the short-term economic incentive but from the long-term incentive to make
aninvestmentinsocialcapitalwithintheirtribalcommunityaswellasinthelocal
Preface vii
society that they belong to. The conclusion of this chapter is compatible with the
outcomesofthestudiesonhappinessinIndiapresentedinthepreviouschapters.
Economic growth is a complex phenomenon that can be explored from various
viewpoints.Althoughourresearchhasexaminedonlyasmallportionofthediverse
issues,wehavemadeitclearthatitisnotappropriatetostudytheeconomicgrowth
in India from the same perspective as when analyzing the growth in Western and
EastAsiancountries.
This book could not have been completed without the financial support of the
Grant-in-AidforScientificResearch.WearegratefultoJapanSocietyforthePromo-
tion of Science. We also thank Juno Kawakami of Springer Nature Japan for her
valuableeditorialwork.
Kyoto,Japan KazuoMino
March2022 TadashiYagi
Contents
1 The South Asian Path of Development: A Historical
andAnthropologicalPerspective ................................. 1
AkioTanabe
1.1 Introduction .............................................. 1
1.2 A Perspective on Development: From Productivity
toLivelihood ............................................. 4
1.3 GeographyandCultureofIndia:MeetingPlaceofDiversities ... 5
1.4 IndianHistoryasaProcessofDiversification .................. 7
1.5 Diversity-DrivenDevelopmentandCommercialExpansion
inEarlyModernIndia ...................................... 8
1.6 ColonialDivergence:Traditionalization,Peasantization
andNewCommercialNetworks ............................. 12
1.7 EconomicDevelopmentinContemporaryIndia ................ 13
1.8 The Agenda of a Post-peasant Society: Diversification
ofSourcesofIncome ...................................... 16
1.9 GrowthAmidstPrecarity:TheAgendaofLaborAbsorption ..... 18
1.10 Reassembling Diversities: Reconvergence to the South
AsianPathofDevelopment ................................. 20
1.11 Conclusion ............................................... 22
References ..................................................... 23
2 EconomicGrowthandStructuralChange:TheCaseofIndia ...... 29
KazuoMino
2.1 Introduction .............................................. 29
2.2 BackgroundFacts ......................................... 32
2.2.1 EconomicGrowthinIndia .......................... 32
2.2.2 StructuralChangeinIndia .......................... 34
2.3 TheBaselineModelWithoutLaborMarketFrictions ........... 37
2.3.1 ModelingStructuralChange ......................... 37
2.3.2 Setup ............................................ 38
2.3.3 GrowthandStructuralChange ....................... 42
ix
x Contents
2.4 TheModelwithLaborMarketFrictions ...................... 43
2.4.1 Setup ............................................ 44
2.4.2 TechnicalProgressandStructuralChange ............. 46
2.5 Extensions ............................................... 50
2.5.1 EndogenousTechnicalProgressintheAgricultural
Productivity ....................................... 51
2.5.2 AThree-SectorModel .............................. 52
2.5.3 CapitalAccumulation .............................. 54
2.6 Discussion ............................................... 58
2.6.1 AlternativeViews .................................. 59
2.6.2 ImplicationsoftheModelAnalysis ................... 60
2.7 Conclusion ............................................... 61
References ..................................................... 61
3 HappinessandSocialCapitalinIndia ............................ 65
YoshioItaba
3.1 Introduction .............................................. 65
3.2 DataDescription .......................................... 67
3.2.1 SurveyOutline .................................... 67
3.2.2 DescriptiveStatisticsofSurveyResults ............... 68
3.2.3 Happiness ........................................ 68
3.2.4 SocialCapital ..................................... 68
3.2.5 OtherVariables .................................... 83
3.2.6 HappinessAnalysis ................................ 84
3.2.7 Education ......................................... 91
3.2.8 WorkStatus ....................................... 91
3.2.9 MaritalStatus ..................................... 91
3.2.10 Age .............................................. 92
3.2.11 CitySize ......................................... 92
3.2.12 SocialCapital ..................................... 92
3.3 SocialCapitalandHypothesis ............................... 93
3.3.1 EmpiricalAnalysisofSocialCapital .................. 94
3.3.2 Marriage,HavingChildren,andHomeOwnership:
Mobility .......................................... 97
3.4 Conclusion ............................................... 99
References ..................................................... 100
4 Comparison of the Determinants of Well-Being Between
IndiaandJapan:ImplicationsfortheFutureoftheEconomy
andSocietyofIndia ............................................ 103
TadashiYagi
4.1 Introduction .............................................. 103
4.2 TheMacroeconomicSituationinIndiaandRelatedIssues ....... 105
4.2.1 TheMacroeconomicSituation ....................... 105
4.2.2 InnovationPolicyasaCriticalFactorforFuture
IndianDevelopment ................................ 107
