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Comparing State-level policy responses to economic reforms in India

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  • Kennedy, Loraine
  • Robin, Kim
  • Zamuner, Diego

Abstract

By rewriting the rules of economic governance in India’s federal democracy, economic reforms adopted in the 1990s have had far-reaching consequences on the relations between the Union (or central state) and the States. First, the dismantling of the centralised management of the economy has created greater scope for State governments to elaborate their economic development policies. Second, the reforms require cooperation from State governments and hence State-level politics and governance have taken on greater importance for India’s overall development trajectory. On the basis of fieldwork-based research, this paper discusses policy frameworks in four States (Andhra Pradesh, Haryana, Kerala and Orissa) comparing and contrasting their promotional policies, aimed at attracting investments, as well as their approaches to structural reforms. For each case we explain political actions and discourse using a qualitative political economy approach. The article addresses a gap in the existing literature, which tends to focus on inter-State comparisons of economic performance. There has been relatively little academic attention to the comparative study of State-level policy response to the national economic reform agenda. One of the objectives of this study is to understand how subnational political elites, who now have more ‘policy space’ (if not necessarily more fiscal space), elaborate their economic development strategies in relation to the central state, on one hand, and to social forces in their political jurisdictions, on the other. We examine the social compromises that are expressed by these State-level policies, which provide evidence of the distinct political economies prevailing in India at the subnational level.

Suggested Citation

  • Kennedy, Loraine & Robin, Kim & Zamuner, Diego, 2013. "Comparing State-level policy responses to economic reforms in India," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 13.
  • Handle: RePEc:rvr:journl:2013:10247
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    References listed on IDEAS

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    1. Dani Rodrik & Arvind Subramanian, 2005. "From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition," IMF Staff Papers, Palgrave Macmillan, vol. 52(2), pages 193-228, September.
    2. Piveteau, Alain & Rougier, Éric, 2010. "Émergence, l’économie du développement interpellée," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 7.
    3. Sabyasachi Kar & Debajit Jha & Alpana Kateja, 2011. "Club-convergence and polarization of states: A nonparametric analysis of post-reform India," Indian Growth and Development Review, Emerald Group Publishing, vol. 4(1), pages 53-72, April.
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    5. Kohli, Atul, 1989. "Politics of economic liberalization in India," World Development, Elsevier, vol. 17(3), pages 305-328, March.
    6. Madhusudan Ghosh, 2008. "Economic Reforms, Growth and Regional Divergence in India," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 2(3), pages 265-285, August.
    7. Isabelle Guérin & Bert D'Espallier & Govindan Venkatasubramanian, 2013. "Debt in Rural South India: Fragmentation, Social Regulation and Discrimination," Journal of Development Studies, Taylor & Francis Journals, vol. 49(9), pages 1155-1171, September.
    8. Richard Herd & Willi Leibfritz, 2008. "Fiscal Policy in India: Past Reforms and Future Challenges," OECD Economics Department Working Papers 595, OECD Publishing.
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    Cited by:

    1. Krichewsky, Damien, 2014. "The socially responsible company as a strategic second-order observer: An Indian case," MPIfG Discussion Paper 14/10, Max Planck Institute for the Study of Societies.

    More about this item

    Keywords

    Inde; économie politique infranational; régulation du politique; gouvernance économique; réformes économiques; India; subnational political economy; political régulation; economic governance; economic reforms; India; economía política infranacional; regulación de la política; gobernancia económica; reformas económicas;

    JEL classification:

    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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