The Green Revolution and the productivity paradox: evidence from the Indian Punjab

Contrary to a widespread belief, total factor productivity (TFP) growth, as measured by the conventional growth accounting approach, contributed little to economic growth during the Green Revolution in the Indian Punjab. This paper shows that this‘productivity paradox’ arises because of a fundamental problem with conventional measures of TFP growth. When technical change is not Hicks‐neutral, it is impossible to separate the contribution of technical change from that of factor accumulation. Simple exercises to assess the magnitudes involved in the Punjab case show that the bias in conventional TFP estimates is severe:‘corrected’ measures of productivity growth are between 100 and 200% higher per year during the Green Revolution.