Growth and the Subsidy Raj in India

2020 ◽  
pp. 67-93
Author(s):  
Maitreesh Ghatak ◽  
Ritwika Sen
Keyword(s):  
Economic Growth ◽  
Political Economy ◽  
Interest Group ◽  
Public Investment ◽  
The Political ◽  
Growth Regime ◽  
Interest Group Politics ◽  
Per Capita ◽  
Group Politics ◽  
The Relationship

The Political Economy and Development of India (PEDI) proposes what is now a very well-known hypothesis about the reasons for the low-growth regime that India experienced from the 60s to the early 80s: interest-group politics in a democracy leads to populism and subsidies, choking off resources for accumulation through public investment in infrastructure. This political economy of constraints, according to Bardhan, seems to have blocked the economy’s escape from a low-level equilibrium trap of low growth. This chapter looks at a part of Bardhan’s argument, namely the relationship between subsidies and growth. The chapter studies the patterns of growth in income per capita and subsidies over the period 1980–81 to 2013–14 and finds, contrary to PEDI, that both economic growth and subsidies increased. Put together, these trends do not provide evidence in favour of the ‘Bardhan subsidy hypothesis’ that the subsidy Raj was the most important binding constraint to economic growth in the 1980s.

Interest Group Politics and Economic Growth in the U.S. States

1988 ◽  
Vol 82 (1) ◽  
pp. 109-131 ◽  
Author(s):  
Virginia Gray ◽  
David Lowery
Keyword(s):  
Economic Growth ◽  
Interest Groups ◽  
Interest Group ◽  
Empirical Support ◽  
Causal Chain ◽  
State Data ◽  
Interest Group Politics ◽  
Group Politics ◽  
Interest Group Influence ◽  
Complete Specification

Mancur Olson's model of economic growth has attracted great attention as a theoretical account of how interest groups influence the rate of economic growth over time. Moreover, the model appears to have received strong empirical support in Olson's tests employing U.S. state data. However, the specification of the Olson construct in these tests is insufficiently attentive to the complex causal chain implicit in Olson's argument, inadequately accounts for precisely how interest groups matter, and employs a static research design that obfuscates the cause-and-effect relationships posited by the model. We review these issues and develop a more complete specification of the Olson model. The respecified model is then tested using U.S. state data for the period of the late 1970s and early 1980s using new measures of interest-group influence.

Business, Labor, and the Politics of Inflation

2013 ◽  
Author(s):  
Benjamin C. Waterhouse
Keyword(s):  
Political Economy ◽  
Interest Group ◽  
Vice President ◽  
Business Leaders ◽  
Business Associations ◽  
The Public ◽  
Price Controls ◽  
Interest Group Politics ◽  
Group Politics ◽  
Price Instability

This chapter traces the complex politics of inflation from the onset of wage-price controls in 1971 through the peak of America's inflationary experience during the Carter administration. During those years, the country's major business associations successfully mobilized a powerful lobbying operation by negotiating the new political terrain that inflation created. From the frustrating nadir, typified by the public spat between treasury secretary John Connally and Vice President Arch Booth, organized business leaders rebounded mightily, successfully engaging in both ideological debates and interest group politics to bolster their institutional unity and achieve clear policy victories. Historically, battles over price instability emerged along the class lines created by an industrial political economy—they pitted the interests of workers against those of employers, or labor against capital.

Normative Reframing and the RGGI Revolution

2016 ◽  
Author(s):  
Leigh Raymond
Keyword(s):  
Detailed Analysis ◽  
Design Process ◽  
Interest Group ◽  
The Political ◽  
Public And Private ◽  
Public Benefit ◽  
New Public ◽  
Interest Group Politics ◽  
Group Politics

This chapter provides a detailed analysis of the multi-year design process leading to the implementation of the Regional Greenhouse Gas Initiative (RGGI) in 2008. It considers the question: How did RGGI’s policy designers succeed in auctioning virtually all of the program’s emissions allowances, wheresimilar efforts to promote auctions failed? After reviewing the limits of existing explanations of RGGI’s decision to auction allowances that are grounded in the interest group politics model, the chapter offers a detailed analysis of the RGGI design process to demonstrate the central role of the new public benefit model in making auctions politically viable. Public and private accounts confirm the prominence of this new normative framing for auctions from the very beginning of the process, and its influence over the political choice to make this policy change.

Political Settlements and Immiserizing Growth Episodes

2019 ◽  
pp. 85-105 ◽  
Author(s):  
Kunal Sen
Keyword(s):  
Economic Growth ◽  
Political Economy ◽  
Developing Countries ◽  
High Growth ◽  
The Political ◽  
Poor Growth ◽  
Distribution Of Power ◽  
The Relationship ◽  
Growth Deceleration ◽  
Political Settlement

Economic growth in developing countries is an ‘episodic’ phenomenon, with countries undertaking discrete shifts from periods of low to periods of high growth and vice versa. Not all growth acceleration episodes lead to reductions in poverty, and there is wide variation in the relationship between growth and poverty across episodes of growth of the same magnitude or duration. This chapter shows that several cases of growth acceleration episodes may be defined as episodes of immiserizing growth, in that poverty either increases or remains roughly the same across the duration of these episodes. Similarly, the chapter shows that not all growth deceleration episodes lead to increases in poverty. A political economy explanation is presented for episodes of immiserizing growth, focusing on the nature of the political settlement, and in particular on the distribution of power. We find that settlements with dispersed vertical power can lessen the likelihood of immiserizing growth episodes. We also find that dispersed horizontal power is not necessarily conducive to pro-poor growth episodes.

Prologue

2018 ◽  
Author(s):  
Sumit K. Majumdar
Keyword(s):  
Economic Growth ◽  
Political Economy ◽  
Industrial Sector ◽  
Comprehensive Assessment ◽  
Productive Efficiency ◽  
Utilization Efficiency ◽  
The Political ◽  
Organizational Forms ◽  
Per Capita

The chapter summarizes the story’s conceptualization and contextualization. India was once the largest economy on earth. Contemporaneously, it accounts for a trivial portion of the world’s economy. Achieving higher growth is important, as India, one of the world’s largest countries, cannot remain marginalized. Per-capita growth enhancements lead to poverty declines. Understanding growth requires an understanding of capitalism dynamics. Growth is the outcome of capitalism, which is the process of capital organization and utilization. Efficiency is the pivot around which growth revolves, and I describe the comprehensive assessment of productive efficiency patterns, and its economic growth impact, for India’s industrial sector from 1950–51 to 2013–14. The nature of capitalism practiced leads to different organizational forms. I describe productive efficiency patterns assessment across different organizational forms comprising India’s economy. My analysis privileges the political economy context to be at the heart of forces driving India’s productive efficiency influencing policies.

The state and American trade strategy in the pre-hegemonic era

1988 ◽  
Vol 42 (1) ◽  
pp. 33-58 ◽  
Author(s):  
David A. Lake
Keyword(s):  
Trade Policy ◽  
Interest Group ◽  
Political Process ◽  
The State ◽  
The Political ◽  
Trade Barriers ◽  
Demand Side ◽  
Interest Group Politics ◽  
Group Politics ◽  
American Trade

Trade policy is commonly seen as a product of domestic interest group politics. Despite the obvious economic distortions introduced by trade barriers, protectionism recurs, we are often told, because producers organize more readily than consumers and dominate the political process. In this “demand side” explanation of protection, the state is seen as the empty receptacle of societal bargaining with no independent voice or role.

Bridging the Gap between Political and Penal Legitimacy

2018 ◽  
Author(s):  
Ralph Henham
Keyword(s):  
Political Economy ◽  
Social Exclusion ◽  
Social Value ◽  
The Political ◽  
Institutional Reforms ◽  
Social Morality ◽  
Penal Policy ◽  
England And Wales ◽  
Sentencing Policy ◽  
The Relationship

This chapter argues that the relationship between penal policy and the political economy provides important insights into the political and institutional reforms required to minimize harsh and discriminatory penal policies. However, the capacity of sentencing policy to engage with this social reality in a meaningful way necessitates a recasting of penal ideology. To realize this objective requires a profound understanding of sentencing’s social value and significance for citizens. The greatest challenge then lies in establishing coherent links between penal ideology and practice to encourage forms of sentencing that are sensitive to changes in social value. The chapter concludes by explaining how the present approach taken by the courts of England and Wales to the sentencing of women exacerbates social exclusion and reinforces existing divisions in social morality. It urges fundamental changes in ideology and practice so that policy reflects a socially valued rationale for the criminalization and punishment of women.

Space Making as Artistic Practice: The Relationship between Grassroots Art Organizations and the Political Economy of Urban Development

2019 ◽  
Vol 18 (4) ◽  
pp. 1142-1161 ◽  
Author(s):  
Shira Zilberstein
Keyword(s):  
Political Economy ◽  
Urban Development ◽  
Urban Space ◽  
The Political ◽  
Cultural Representations ◽  
Artistic Practice ◽  
Social And Cultural Capital ◽  
Art Organizations ◽  
Do It Yourself ◽  
The Relationship

Standard narratives on the relationship between art and urban development detail art networks as connected to sources of dominant economic, social, and cultural capital and complicit in gentrification trends. This research challenges the conventional model by investigating the relationship between grassroots art spaces, tied to marginal and local groups, and the political economy of development in the Chicago neighborhood of Pilsen. Using mixed methods, I investigate Do–It–Yourself and Latinx artists to understand the construction and goals of grassroots art organizations. Through their engagements with cultural representations, space and time, grassroots artists represent and amplify the interests of marginal actors. By allying with residents, community organizations and other art spaces, grassroots artists form a social movement to redefine the goals and usages of urban space. My findings indicate that heterogeneous art networks exist and grassroots art networks can influence urban space in opposition to top–down development.

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