Class Notes (837,435)
Canada (510,273)
POL101Y1 (1,148)
Lecture 2

Week 20 - Political Economy II.docx

5 Pages
Unlock Document

Political Science
Professor Kanta Murali

Week 20- Economic liberalization and high growth in India March 4, 2013 -the period of the 1980s – a transition phase but not a major period of economic liberalization -1991 – the period of economic liberalization begins -changed india’s engagement with the external economy – opened up trade and external investment -post 1991 – a high growth path -the relationships between economics and politics Agenda -India’s high growth phase in comparative perspective -esp with other East Asian countries -overview of India’s growth transformation -policy changes and effects in the 1980s -policy changes and effects after 1991 -the political economy of liberalization -India’s growth record and its political consequences -scholarly debates on India’s growth transformation India’s growth in comparative perspective -how India differs from other examples of rapid growth in the developing world after WWII -growth in a consolidated democracy -high growth phase and greater electoral competition -poor electorate -ethnic diversity -the academic expectation is this leads to ethnic fragmentation and tends to lead to negative economic outcomes (but that hasn’t happened in India necessarily) -a dynamic of democracy before development -leads to two clear questions – what do patterns of policy imply in an electorate that is predominantly poor? -why does India have such pro-Business policies? -process in India is largely a domestic-driven process – driven by domestic investors -the presence of domestic capital -importance of domestic investment and greater inward-orientation -the policy leverage domestic investors have on the state -nature of state-business relations -distinct than what we might see in other countries -idiosyncratic composition of growth -service sector-oriented, capital-intensive growth -not focused on labour-intensive manufacturing (which is interesting given the country’s pop’n and therefore the ability of labour) -most of the population works in agriculture -small share of manufacturing India’s growth in comparative perspective -relatively low human development and poor infrastructure -differences in the nature of market reforms -gradual and incremental Week 20- Economic liberalization and high growth in India March 4, 2013 -privatization and deeper reforms -much more limited privatization in India -for most economies in transition in the 80s – Washington Consensus reigned supreme and Shock Therapy style economic reforms -India an exception – its economic liberalization has been much more gradual Phases of India’s growth transformation -change since 1980s (transitional period) -post 1990s (significant difference – changes are extensive) -Trajectories of the shift -the 1980s and incremental changes -domestic liberalization and marginal changes -crisis and change in 1991 -post 1991 era and extensive liberalization -domestic and external liberalization -extensive, incremental changes 1980s: signs of policy change -Indira Gandhi’s return to power (1980-1984) -marginal signs of change – easing controls on the private sector -Rajiv Gandhi’s term -emphasis of change – both politically and economically -much more comfortable with technology and less oriented towards Nehruvian socialism – diff worldview than his mom -towards domestic deregulation (1985 budget) -licensing requirements eased -restrictions on big business eased -relationship with business – Case of the Confederation of Indian Industry -tax relief to the middle class -marginal changes in external orientation -emphasis on technology -encouraged businesses to get more involved in policy -political opposition and stalled reforms -from labour -the political left The 1991 crisis and extensive reforms -balance of payments crisis in 1991 -fiscal imbalances in 1980s -collapse of USSR, 1990 Gulf War, oil prices and remittances, internal political problems -Soviet union – had been India’s major trading partner until then (and also had political ties) -Gulf War – India had a large number of workers in Gulf who sent remittances back – so decrease of remittances -also India dependent on external oil reserves and the gulf war led to an increase in oil prices -internal political problems Week 20- Economic liberalization and high growth in India
More Less

Related notes for POL101Y1

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.