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Six - India’s Vulnerable Maturity

Experiences of Maharashtra and West Bengal

Published online by Cambridge University Press:  05 December 2012

Douglass C. North
Affiliation:
Washington University, St Louis
John Joseph Wallis
Affiliation:
University of Maryland, College Park
Steven B. Webb
Affiliation:
The World Bank, Washington DC
Barry R. Weingast
Affiliation:
Stanford University, California
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Summary

Limiting violence in India with its population of more than a billion people and its many languages, religions, castes, and regional diversities involves a complex web of economic and political compromises. The distribution of rents to powerful groups is jointly determined by institutions and politics at the national level and political arrangements within each state. While the national institutional and political system sets an overall architecture for the distribution of rents, individual states have their own distinct political and economic arrangements. This diversity creates tensions between the center and the different states, but the diversity at the level of states also explains how such a big country stays together at all. By contrasting the construction of the social order in two Indian states, Maharashtra and West Bengal, we explore how dominant coalitions can be constructed in very different ways within the overall architecture set at the national level. These differences in the ways in which rents are used to construct social orders at the level of each state also help to explain differences in economic policies and performance across Indian states.

In terms of the LAO framework, India after its independence in 1947 had many features of a basic LAO but gradually acquired significant characteristics of a mature LAO. This is true at the national level and in most states. But the transition conceals significant regional differences and many parts of the country have characteristics of a fragile LAO, often at the brink of intense insurgencies that sometimes break out. The Congress Party as an inclusive ruling coalition dominated Indian politics for the first three decades after independence from Britain in 1947. Its dominance came to an end by the late 1970s with a host of other parties, including regional parties, emerging that could construct alternative governing coalitions at the center. The significant increase in the effective mobilization of political organizations outside the Congress Party can be described as a gradual move in the direction of a mature LAO. At the same time, strategies of national economic management also went through changes after the 1980s as older variants of industrial policy were abandoned and the types of rents in the economy changed as a result.

Type
Chapter
Information
In the Shadow of Violence
Politics, Economics, and the Problems of Development
, pp. 198 - 232
Publisher: Cambridge University Press
Print publication year: 2012

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