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Informality and Flexible Specialization: Labour Supply, Wages, and Knowledge Flows in an Indian Artisanal Cluster

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  • Amit Basole

Abstract

Artisanal industrial clusters, geographical agglomerations of small or micro, ‘flexibly-specialized’ enterprises, are an important component of the informal sector from employment generation, poverty alleviation, as well as export promotion perspectives. Two theoretical paradigms have commonly been employed to analyse such clusters: informality and flexible specialization. The first paradigm emphasizes precarious work, surplus labour, and low wages; the second, skilled labour, agglomeration economies, and fashion-sensitive products. This study brings these two perspectives together to address how informal institutions enable clusters to function and how they shape the distribution of risks and gains that accompany flexible specialization. Focusing on the artisanal weaving cluster in the city of Banaras, in North India, I examine the putting-out (subcontracting) system, the system of family-based apprenticeships, and the transfer of fabric designs between firms. In each case, I show how informality and flexible specialization complement and contradict each other.

Suggested Citation

  • Amit Basole, 2014. "Informality and Flexible Specialization: Labour Supply, Wages, and Knowledge Flows in an Indian Artisanal Cluster," Working Papers 2014_07, University of Massachusetts Boston, Economics Department.
  • Handle: RePEc:mab:wpaper:2014_07
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    References listed on IDEAS

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    1. R. Parthasarathy, 1999. "Tradition and Change: Artisan Producers in Gujarat," The Journal of Entrepreneurship, Entrepreneurship Development Institute of India, vol. 8(1), pages 45-65, March.
    2. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 1-9.
    3. Bedi, Jatinder S. & Verma, Radheshyam, 2011. "State of fabric producing units in India," MPRA Paper 43034, University Library of Munich, Germany.
    4. Amit Basole & Deepankar Basu, 2010. "Relations of Production and Modes of Surplus Extraction in India," UMASS Amherst Economics Working Papers 2011-01, University of Massachusetts Amherst, Department of Economics.
    5. Harriss-White,Barbara, 2003. "India Working," Cambridge Books, Cambridge University Press, number 9780521809795.
    6. Schmitz, Hubert & Nadvi, Khalid, 1999. "Clustering and Industrialization: Introduction," World Development, Elsevier, vol. 27(9), pages 1503-1514, September.
    7. Knorringa, Peter, 1999. "Agra: An Old Cluster Facing the New Competition," World Development, Elsevier, vol. 27(9), pages 1587-1604, September.
    8. James Heintz, 2006. "Low-wage manufacturing and global commodity chains: a model in the unequal exchange tradition," Cambridge Journal of Economics, Oxford University Press, vol. 30(4), pages 507-520, July.
    9. Breman,Jan, 1996. "Footloose Labour," Cambridge Books, Cambridge University Press, number 9780521568241.
    10. Harriss-White,Barbara, 2003. "India Working," Cambridge Books, Cambridge University Press, number 9780521007634.
    11. Breman,Jan, 1996. "Footloose Labour," Cambridge Books, Cambridge University Press, number 9780521560832.
    12. Vu Hoang Nam & Tetsushi Sonobe & Keijiro Otsuka, 2010. "An Inquiry into the Development Process of Village Industries: The Case of a Knitwear Cluster in Northern Vietnam," Journal of Development Studies, Taylor & Francis Journals, vol. 46(2), pages 312-330.
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    Cited by:

    1. Amit Basole, 2014. "Authenticity, Innovation and the Geographical Indication in an Artisanal Industry: The Case of the Banarasi Sari," Working Papers 2014_09, University of Massachusetts Boston, Economics Department.

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