Reflections on Indian political economy since thirty years..

Prof Pranab Bardhan of UCB wrote a book on Indian pol eco isn 1984. He reviews what has changed since then in this EPW piece –

He says some things have changed and others have not:

Over the 30 years since The Political Economy of Development in India was published I have noticed a remarkable asymmetry in its reception among mainstream economists and others. The book has received nothing but benign neglect from the former group. I am pretty sure most of my colleagues in the major Economics Departments in the United States (US) have never heard of this book, even though many of them may be aware of my more technical articles in journals. Looking back I have sometimes thought that maybe it would have attracted more attention of economists if I had published in the book the background theoretical notes I had for a couple of its main messages.

One such message was about the difficulty of organising collective action towards long-term public investment in infrastructure, a key ingredient of economic growth, in a country where even the elite is fragmented and finds it difficult to get its act together in doing something that would have benefited most of its members. With this failure of collective action, the public surplus is often frittered away in short-term subsidies and handouts. Since writing the 1984 book I have elsewhere (Bardhan 2005) elaborated on my theoretical ideas on the adverse effect of social heterogeneity and inequality on collective action not just on matters of macroeconomic growth but also in the microeconomic issues of management of local commons.

The other message, enunciated in the last chapter of the book, for which I had some unpublished theoretical notes, was how the same elite fragmentation that acts as a constraint on economic growth can work as a safeguard for the resilience of democracy in India, where the divided groups may agree on the procedures of democracy as a means of keeping one another within some bounds of moderation in their transactional negotiations.

Nice bit. Most issues are known. Just that perspective/treatment is different.


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