This essay Mes to bring out some of the complexities that are overlooked in the usual treatment of the state in the institutional economics literature and supplement the latter with a discussion of ...some alternative approaches to looking at the possible developmental role of the state. It refers to a broader range of development goals (including the structural transformation of the economy) and focuses on problems like the resolution of coordination failures and collective-action problems, the conflicting issues of commitment and accountability and the need for balancing the trade-offs they generate, some ingredients of state capacity and political coalition building usually missed in the literature, the possible importance of rent sharíng in a political equilibnum, the advantages and problems of political centralization and decentralization, and the multidimensionality of state functions that may not be addressed by markets or private firms.
The recent economic rise of China and India has attracted a great deal of attention--and justifiably so. Together, the two countries account for one-fifth of the global economy and are projected to ...represent a full third of the world's income by 2025. Yet, many of the views regarding China and India's market reforms and high growth have been tendentious, exaggerated, or oversimplified.Awakening Giants, Feet of Clayscrutinizes the phenomenal rise of both nations, and demolishes the myths that have accumulated around the economic achievements of these two giants in the last quarter century. Exploring the challenges that both countries must overcome to become true leaders in the international economy, Pranab Bardhan looks beyond short-run macroeconomic issues to examine and compare China and India's major policy changes, political and economic structures, and current general performance.
Bardhan investigates the two countries' economic reforms, each nation's pattern and composition of growth, and the problems afflicting their agricultural, industrial, infrastructural, and financial sectors. He considers how these factors affect China and India's poverty, inequality, and environment, how political factors shape each country's pattern of burgeoning capitalism, and how significant poverty reduction in both countries is mainly due to domestic factors--not global integration, as most would believe. He shows how authoritarianism has distorted Chinese development while democratic governance in India has been marred by severe accountability failures.
Full of valuable insights,Awakening Giants, Feet of Clayprovides a nuanced picture of China and India's complex political economy at a time of startling global reconfiguration and change.
•Alternative definitions of clientelism.•Reflections on the impact of clientelism on democracy and state capacity.•The process of change in the incidence of clientelism.•Policies to overcome ...clientelism.•Under-researched area in the literature.
Unlike much of the growing literature on political clientelism, this short paper contains mainly the author’s general reflections on the broad issues of governance (or mis-governance including corruption), democracy and state capacity that clientelism has an impact on. It then analyzes how its incidence changes with the process of development, and the kind of policy issues that it generates. Finally, the paper suggests some research gaps in this literature.
In this paper we note that the institutional context (and therefore the structure of incentives and organization) in developing and transition economies is quite different from those in advanced ...industrial economies, and this necessitates the literature on decentralization in the context of development to go beyond the traditional fiscal federalism literature. We review some of the existing theoretical work and empirical case studies of decentralization from the point of view of delivery of public services and of conditions for local business development, and point to ways of going forward in research.
Capitalism is usually associated with inequality. The Indian variant of capitalism creates its specific structure of inequality. The recent trends of capital concentration in India, facilitated by ...the political decision-making, shape particular patterns of the rise in inequalities. The nature of capitalism in India is linked to the nature of capital concentration and the low bargaining power of the labour. The article discusses these links. The article discusses the recent attempts at social and political legitimization of the prevailing kind of capitalism under the current political regime. The focus is on long-term issues, and instead of a detailed account, the attempt is to paint a picture with a very broad brush.
Many developing countries are experimenting with decentralisation of public service delivery to elected local governments instead of bureaucrats appointed by a central government. We study the ...resulting implications in a theoretical model in which the central government is uninformed about local need and unable to monitor service allocations. Bureaucrats charge bribes for services as monopoly providers, resulting in underprovision of services, especially for the poor. Local governments are directly responsive to their citizens needs but may be subject to capture by elites. Effects of decentralisation on service volumes, efficiency and equity are analysed under different financing arrangements for local governments.
A discussion is presented of some of the alternative denotations of the problem of corruption. Ways are then considered in which the damaging consequences of corruption operate in the economy, while ...not ignoring its possible redeeming features in some cases. The question of why corruption is perceptibly so different in different societies is pursued. The feasible policy issues that arise are examined.
Decentralised development Bardhan, Pranab
Indian economic review,
12/2019, Volume:
54, Issue:
Suppl 1
Journal Article
Peer reviewed
In this paper we start with an evaluation of the various advantages and disadvantages of decentralisation (in the sense of devolution of power to local agencies and communities), and also of the ...conditions that predispose towards success or failure in beneficial decentralised development. In particular we have focussed on the argument that in governance structures control rights should be assigned to people who have the requisite information and incentives, and at the same time will bear responsibility for the (political and economic) consequences of their decisions. We try to provide a balanced assessment of the efficiency and equity effects of such assignments of control rights and how they operate differently under different initial conditions.
This paper will first distinguish between the non-economist’s approach to corruption largely on the basis of public morals and norms and the economist’s approach in terms of incentives and ...organization. I then discuss why otherwise similar countries may end up with different equilibrium levels of corruption, why such equilibria tend to persist, and why corruption in some countries seems to be more damaging to the economy than in others. I then try to derive some policy lessons.
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