Changes in utilization and productivity in a deregulating economy

Authors
Citation
Sr. Bhalotra, Changes in utilization and productivity in a deregulating economy, J DEV ECON, 57(2), 1998, pp. 391-420
Citations number
36
Categorie Soggetti
Economics
Journal title
JOURNAL OF DEVELOPMENT ECONOMICS
ISSN journal
03043878 → ACNP
Volume
57
Issue
2
Year of publication
1998
Pages
391 - 420
Database
ISI
SICI code
0304-3878(199812)57:2<391:CIUAPI>2.0.ZU;2-3
Abstract
This paper provides an estimate of the production cost of losses in officia l working hours and of utilization-adjusted productivity growth using robus t methods on a panel of industry-region data for Indian manufacturing in th e 1980s. Time losses such as arise on account of power cuts and materials s hortages appear to have cost the economy a sixth of its potential manufactu ring output in 1979. Concomitant with deregulation and increased public inv estment in infrastructure in the 1980s, there was a significant recuperatio n of lost time. Although this contributed 25% of the observed acceleration in output, it has escaped notice so far. Recognizing the increase in factor utilization produces more modest estimates of productivity growth and cast s doubt on its sustainability. (C) 1998 Elsevier Science B.V. All rights re served. JEL classification: O47; C23; D24; E23.