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Party Linkages and Economic Policy: An Examination of Indira Gandhi's India


  • Hankla Charles Robert

    (Georgia State University)


We know from observation that some democracies intervene deeply in their domestic economies while others adopt a more laissez faire approach. Can we explain these differences solely with ideology, or are other political influences also at work? I argue in this paper that elected leaders sometimes opt for hefty economic regulation purely to generate sources of patronage that can be used to maintain their political positions. Leaders are most tempted to take this approach, I contend, when their political parties are not stably linked to sources of electoral support. Unstably linked governing parties will tend to have very short time horizons, focusing on the immediate objective of avoiding massive vote losses in the next election. As a result, they will be less concerned with the potential future damage that a patronage-based policy may inflict on the national economy. I find support for this argument with a close examination of Indian economic policy under Indira Gandhi. Prime Minister Gandhi, I contend, increased the Indian state's control over trade, industrial production, and credit allocation just as the Congress Party's linkages to the electorate were destabilizing.

Suggested Citation

  • Hankla Charles Robert, 2006. "Party Linkages and Economic Policy: An Examination of Indira Gandhi's India," Business and Politics, De Gruyter, vol. 8(3), pages 1-31, December.
  • Handle: RePEc:bpj:buspol:v:8:y:2006:i:3:n:4

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    References listed on IDEAS

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    Cited by:

    1. Pulapre Balakrishnan, 2007. "Visible hand: Public policy and economic growth in the Nehru era," Centre for Development Studies, Trivendrum Working Papers 391, Centre for Development Studies, Trivendrum, India.
    2. Pulapre Balakrishnan, 2008. "Visible Hand: Public Policy nd Economic Growth in the Nehru Era," Working Papers id:1355, eSocialSciences.
    3. Özcan Gül Berna & Gündüz Umut, 2015. "Political connectedness and business performance: evidence from Turkish industry rankings," Business and Politics, De Gruyter, vol. 17(1), pages 41-73, April.

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