ESP (Emerging States Project) Economic History Seminar (3-2)
This seminar will be co-hosted with ESP Political Economy Group (C01), Ryukoku University’s Center for the Study of Contemporary India (RINDAS) and us.
Date: June 12th (Fri) 2015
Venue: GRIPS, Research Meeting Room 4A (4th floor)
Speaker: Prof. Kanchan Chandra (New York University)
Title: “The New Indian State: The Relocation of Patronage in the Post-Liberalization Economy”
The programme of economic liberalization begun in India in 1991 introduced farreaching and consequential changes in the nature of the Indian state. This article maps the changes in the relationship between the post-liberalization state and the private sector, and addresses their political consequences. The pre-liberalization Indian economy was characterized by a patronage-based relationship between the state and the private sector. Economic liberalization by definition implies the retreat of the government from the economy, and conventional metaphors used to describe the 1991 reforms — the elimination of bureaucratic red-tape, dismantling of the license raj, the abolition of the state’s monopoly, and the unshackling of the economy – suggest that the Indian state indeed retreated from the economy in many ways. This article argues, by contrast, drawing on a combination of interviews (with identifying information removed), field visits (also “anonymized”), government statistics and a reading of the key legislation governing the reforms, that while the role of the state in the economy has indeed changed following economic liberalization, it has relocated, not retreated. The relocation of the post-liberalization state has also been accompanied also by the relocation of its discretionary power. As a result, the patronagebased relationship between the state and the private sector has remained in place in the post-reform economy. I suggest here, drawing on Bardhan’s classic 1984 study, that one important political consequence of this relocation is the deepening of the stake on the part of business in procedural democracy, by which I mean simply a political system whose leadership is chosen through direct elections with unrestricted suffrage. Simultaneously, however, the patronage-based relationship between the state and the private sector can subvert substantive aspects of democracy by increasing the opportunities for corruption, and elevating a top-down notion of development that treats losses inflicted on citizens such as displacement or unemployment as collateral damage in the inevitable march towards a capitalist economy.