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We knew Modi’s attack on institutions was bad for Indian economy. Now we have proof

For die-hard Modi supporters who couldn’t care less about institutions, a new study shows that India’s per capita income was 10% lower under Modi than it might otherwise have been.

As Narendra Modi fatigue becomes palpable across India, a more fundamental question is being raised: have we been conned all along, despite promises of transformation? Was there a great void under all the slippery slogans about ‘Acche Din’, ‘New India 2022’ and ‘Viksit Bharat 2047’? Now, a study by political scientists Kevin Grier and Robin Grier confirms our suspicions.

In a nutshell, the paper published by Texas Tech University researchers finds that India’s governance and per capita income growth were worse under Modi than they would have otherwise been—whether led by Manmohan Singh’s UPA, Atal Bihari Vajpayee’s NDA or even the United Front coalition.

Some voters are drawn to a ‘Strongman Bargain’ offered by populists, accepting weaker institutions in return for improved economic performance. Instead, India under Modi got the worst of both worlds: weak institutions and slower growth. Modi transformed India, but decidedly for the worse.

The logic of this argument is consistent with many theories (see Rodrik et al. and Acemoglu et al.) that connect institutional strength to prosperity.

The researchers deploy an accepted statistical technique called the synthetic control method. They construct a “twin” called “Synthetic India”, whose economic performance strongly correlates with a weighted blend of comparable emerging economies. The fact that Synthetic India correlates with real India over a long 30-year period suggests that this counterfactual is robust, providing a baseline expectation of how India should have performed after 2014.

The paper has two findings. First, all ten governance indicators measuring institutional strength fell precipitously in Modi’s India, whether it was liberal democracy, judicial constraints, political corruption or freedom of expression (see the charts........

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