Institutions and their Discontents: Rethinking Economic Development in South Asia

17 March 2014 - 18 March 2014

CRASSH (SG1&2)

Keynote address by Professor Pranab Bardhan (University of California, Berkeley):

Convenors

Atiyab Sultan (Faculty of History, University of Cambridge)

Tayyab Safdar (POLIS, University of Cambridge)

Shan Aman Rana (Economics, London School of Economics)

Mahreen Mahmud (Economics, University of Kent)

Summary

This two-day conference on institutions and institutional change in South Asia brings together historians, economic historians, economists, sociologists and political scientists to critically discuss and debate institutional development in the region. With panels ranging from the origins of institutions in the region to contemporary attempts at policy reform to the informal economy and innovation, the conference includes contributions from eminent scholars and emerging researchers.
The primacy accorded to institutions in literature on economic development by eminent scholars like Dani Rodrik and Daron Acemoglu has been challenged by academics like Ha-joon Chang, but the debate has remained closeted among economists. This conference aims to enrich and expand the dialogue by engaging experts from other disciplines like history and politics to contextualise the emergence of institutions in their historical and socio-political context. The geographical focus on South Asia will enable the discussion to be grounded and targeted at understanding one of the poorest regions of the world, often castigated for its weak and corrupt institutions. The diversity in the fortunes of India and other regional players like Pakistan and Sri Lanka, will allow a critical appreciation of other factors helping or hindering economic growth with or without strong institutions.

Keynote speakers: Dr Ha-joon Chang (University of Cambridge) and Prof. Pranab Bardhan (University of California, Berkeley)

Other speakers include: Prof. Sir Christopher Alan Bayly (University of Cambridge), Prof. Stuart Corbridge (London School of Economics), Prof. Jean Paul Faguet (London School of Economics), Prof. Barbara Harriss-White (University of Oxford), Prof. David Washbrook (University of Cambridge), Dr Tomas Larsson (University of Cambridge), Dr Kamal Munir (University of Cambridge) and Dr Jaideep Prabhu (University of Cambridge)

Sponsors

         

Supported by the Centre for Research in the Arts, Humanities and Social Sciences (CRASSH), the Centre for South Asian Studies, the Centre for History & Economics and the Trevelyan Fund at the University of Cambridge, the Economic History Society, and a Young Scholars Event Grant of the Institute for New Economic Thinking (INET)

Accommodation for speakers selected through the call for papers and non-paper giving delegates

We are unable to arrange or book accommodation, however, the following websites may be of help.

Visit Cambridge
Cambridge Rooms
University of Cambridge accommodation Listing
Lastminute.com - 5% discount (code: CAM5 - terms and conditions)

Administrative assistance: conferences@crassh.cam.ac.uk

DAY 1 - 17 March 2014

8.30 - 9.00

Registration

9.00 - 10.45

PANEL 1: Institutions and Economic Development: Key Questions and Debates

  • Prof. Christopher Alan Bayly (University of Cambridge): Critiquing Institutions in South Asia and the Middle East: Some Historical Background
  • Prof. David Washbrook (University of Cambridge): Disentangling the Web: Land Rights and Economic Development in Colonial India
  • Dr. Tomas Larsson (University of Cambridge): Institutions and their Origins: Insights from Southeast Asia
10.45 - 11.15

Tea and coffee

11.15 - 13.00

PANEL 2: Theorizing Institutional Structure and Change in South Asia

  • Prof. Stuart Corbridge (London School of Economics): Geography, Institutions and Public Policy: Is India Exceptional Yet Again?
  • Prof. Imran Ali (Karachi School of Business and Leadership): Pakistan: Anarcho- Vassalage and the Malfunctioning State
  • Prof. Amanda Perry-Kessaris (University of Kent): Approaching Law and Development
13.00 - 14.15

Lunch

14.15 - 16.00

PANEL 3: Institutions and Policy Reform: Analyses and Critiques

  • Dr Kamal Munir (University of Cambridge): Privatization in Pakistan: One Step Forward, Two Steps Back
  • Dr Nayanika Mathur (University of Cambridge): Paper Tiger: Bureaucratic Everydayness and the Developmental State in the Indian Himalaya
  • Dr Sanjay Ruparelia (New School for Social Research): The Antinomies of the Postneoliberal Welfare State in India
16.00 - 16.30

Tea and coffee

16.30 - 17.00

Free time

17.30 - 19.00

PUBLIC LECTURE:

  • Prof. Pranab Bardhan (University of California, Berkeley): Corruption in India: When Preaching Piety is Not Enough

DAY 2 - 18 March 2014

9.30 - 11.00

PANEL 4: Institutions in South Asia: Historical Perspectives

  • Dr Tahir Kamran (University of Cambridge): A Farce, a Mockery and a Fraud: Provincial Elections without Election Commission
  • Dr Shailaja Fennell (University of Cambridge): Capturing Resources Through the Community Lens: Learning from Institutionalising of Kinship and Caste Networks in the Local Sphere in the Doab
  • Antonia Strachey (University of Oxford): Travancore State: A Fiscal History
11.00 - 11.30

Tea and coffee

11.30 - 13.00

PANEL 5: Corruption and the Bureaucracy

  • Prof. Jean-Paul Faguet (London School of Economics): Decentralization and Popular Democracy: Governance from Below in Bolivia… and Bangladesh?  Lessons for South Asia 
  • Dr. Akbar Zaidi (Columbia University): Subsidizing the Pakistani Elite: Aid, Taxation, and Underdevelopment
  • Dr Rohit De (University of Cambridge): Mr Bagla's Baggage: Commodity Controls, Marwari Merchants and Administrative Law in India
13.00 - 14.00

Lunch

14.00 - 15.30

PANEL 6: The Informal Economy, Innovation and the Everyday Impact of Institutions

  • Prof Barbara Harriss-White (University of Oxford): 'Pudumai'-Innovation and Institutional Churning in India's Informal Economy
  • Dr Jaideep Prabhu (University of Cambridge): Frugal Innovation/Entrepreneurship and the Informal Economy
  • Dr Adeel Malik (University of Oxford): Shrines and Development: Evidence from Punjab
15.30 - 16.00

Tea and coffee

16.00 - 17.30

KEYNOTE 2:

  • Dr Ha-Joon Chang (University of Cambridge): Institutions and Economic Development: Theory, Policy and History
17.30 - 17.45

Closing remarks

Imran Ali (Karachi School of Business and Leadership): Pakistan: Anarcho-Vassalage and the Malfunctioning State

The paper explores, in the case of Pakistan, the impacts of both colonial and post-colonial developments on the structures of authority and resource distribution, and their linkages with problems that now confront this nation at an almost existential level. The paper focuses on why and how the country reached the current nadir of major deinstitutionalization, social atavism, a dysfunctional elite, and widespread human resource underperformance.  Both internal and geostrategic imperatives, developed here through the concept of ‘anarcho-vassalage’, have been prime drivers in the emergent malfunctioning of the Pakistani state. The paper argues that this internal-external nexus has accentuated rent-seeking, economic distortion and social rigidities, leading to multiple and seemingly insolvable crises.
The loosening of state institutions is integral to these trends. Failure to control public functionaries from major misdemeanor has impacted severely on both development and equity. Pakistan perhaps exceeds most other developing economies in its inordinate levels of rent-seeking among both state functionaries and private sector elite segments. The incidence of resource diversion appears, if anything, to be increasing with time. Growing weaknesses in transparency and accountability makes the problem more endemic, and emboldens the corrupt to openly display their wealth as recourse to justice unravels. With public institutions becoming a virtual hub of criminality, the state begins to lose legitimacy and civil disorder ensues or non-state actors gain the initiative. The adverse impacts on business confidence, developmental goals and welfare strategies further damage the positioning for capturing benefits from global and regional economic opportunities.
The shortfalls in governance and institutional reform have to be contrasted with the economic potential of an emerging market of almost 200 million, with impressive business profits, economic indicators comparing favourably with neighbouring India, and both urban and rural markets articulating aggressively. Improvements in the efficacy of public management would clearly assist in maintaining economic growth at the 5-7% rather than 3-5% range. Tackling institutional voids and enhancing reform capabilities are thus critical for a successful turnaround strategy for Pakistan. However, the interaction of both internal and external stakeholders has tended to undermine such goals, making this a significant and complex country case study in the problematic of development.
 
Prof. Pranab Bardhan (University of California, Berkeley): Corruption in India: When Preaching Piety is Not Enough

Corruption has been at the top of public political discussion in India in recent years. While the general discussion is in terms of lapses in morals or leadership failures, institutional economics takes a different approach to the understanding of the incidence of corruption and the policies relevant to alleviating it. The talk will illustrate this approach in the context of India. After pointing out some definitional issues on corruption, it will go into the supposedly  paradoxical perception that corruption has increased instead of diminishing in the years after economic liberalization. It will examine the current demand for the Lokpal (ombudsman) and the enactment of the Lokpal Act of 2014. It will show how in this process some of the institutional, organizational and incentive issues have been overlooked, and how some other kinds of reforms may be more useful. It will also point out ways in which over-zealousness in anti-corruption movements can be counter-productive.

Ha-Joon Chang (University of Cambridge): Institutions and economic development: theory, policy and history

The article tries to advance our understanding of institutional economics by critically examining the currently dominant discourse on institutions and economic development. First, I argue that the discourse suffers from a number of theoretical problems – its neglect of the causality running from development to institutions, its inability to see the impossibility of a free market, and its belief that the freest market and the strongest protection of private property rights are best for economic development. Second, I point out that the supposed evidence showing the superiority of ‘liberalized’ institutions relies too much on cross-section econometric studies, which suffer from defective concepts, flawed measurements and heterogeneous samples. Finally, I argue that the currently dominant discourse on institutions and development has a poor understanding of changes in institutions themselves, which often makes it take unduly optimistic or pessimistic positions about the feasibility of institutional reform.

Stuart Corbridge (London School of Economics): Geography, Institutions and Public Policy: Is India Exceptional Yet Again?

India gives the lie to many so-called rules or large-scale generalisations in social science.  The country has sustained democratic government at low levels of per capita income (the Emergency years excepted); it has survived in one piece not withstanding high levels of ethic fractionalisation; and in some recent elections poor, rural women have been more willing to vote than rich, urban males.  India also seems to give the lie to another broad generalisation: that concerted economic growth (in the case of India, since 1980-81) must be underpinned by good or improving political and economic institutions.  It is far from self-evident that institutional quality in India – as measured, for example, by the strength of the rule of law, or as proxied by the quality of politicians in national and state governments – has improved since the late-1970s.  It is possible, nonetheless, to argue, as I shall do in this presentation, both that public policy matters more than some versions of institutionalism allow and that those policies matter most (and are most effective) where there is a large measure of what I will call ‘institutional elasticity’ (or high levels of institutional quality that are in key respects unfulfilled).

Rohit De (University of Cambridge): Mr Bagla’s Baggage: Commodity Controls, Marwari Merhchants and Administrative Law in India

Independent India retained commodity controls that had been established to meet wartime shortages, as permanent instrument to address the needs of the developmentalist state.  The system of commodity controls exemplified the ‘permit-license-quota Raj’ that was established in independent India, where the economy was seen in permanent crisis. This paper examines litigation around the commodity control legislation through the 1950s to map how those affected by the regime of economic controls challenged it through claims of fair procedure and democratic values.
Despite their centrality to both the economy and daily life, the operation of commodity controls has been largely neglected, except to the extent that they are identified as sites of corruption and rent seeking. In contrast, this paper argues that judicial review of administrative action in India, the hallmark of a ‘rule of law’ state, emerged from this illegality and culture of corruption.
Petty traders and merchants who were denied political legitimacy, particularly Marwaris, began operating through the language of administrative law.  State control of the economy was contested by critiquing unregulated discretion enjoyed by low ranking bureaucrats. Administrative law had existed in a very limited form under the colonial regime. As this paper will show, the emergence of administrative law through these challenges after independence made commodity controls a prime  focus for the legal academy and foreign funders.
In doing so, they were able to collapse the distinction between ‘economic subjects of interests’ and ‘subjects of rights’, that Foucault argues is characteristic of modern political economy. Using successive courtroom challenges to the controls system, the paper traces the emergence of the Constitution as a site for contestation over market governance between bureaucrats, economists and planners on the one side, and petty merchants, traders and retailers on the other.

Jean-Paul Faguet (London School of Economics): Decentralization and Popular Democracy: Governance from Below in Bolivia… and Bangladesh?  Lessons for South Asia

I examine decentralization through the lens of the local dynamics it unleashed in the much-noted case of Bolivia and the less-noted case of Bangladesh. I argue that the national effects of decentralization are largely the sum of its local-level effects. Hence to understand decentralization we must first understand how local government works.  Beginning with Bolivia, I explore the deep economic and institutional determinants of government quality in two extremes of municipal performance. From this I derive a model of local government responsiveness as the product of political openness and substantive competition.
The quality of local politics, in turn, emerges endogenously as the joint product of the lobbying and political engagement of local firms/interests, and the organizational density and ability of civil society. I test the theory’s predictions on a database containing all Bolivian municipalities. The theory proves robust. The combined methodology provides a higher-order empirical rigor than either approach can alone. I then test these ideas using qualitative data from Bangladesh. The evidence suggests that NGOs and civic organizations interact with local and national government in powerful ways in Bangladesh, allowing that country to leap-frog much wealthier India in terms of a number of important social development outcomes.

Shailaja Fennell (University of Cambridge): Capturing Resources Through the Community Lens: Learning from Institutionalising of Kinship and Caste Networks in the Local Sphere in the Doab

The role of community-based contributions in the economic advancement in local agrarian environments has been the recent focus of interest in international development, based on social science frameworks (Woolcock 2004; Chambers 2009, 2011). The importance of community participation raised in this literature makes the case that we need to consider community level actions that claim new communal and individual rights as a central area of development policy. An important consequence of this interest in community actions has been the resurgent interest in older theories and analyses of community appropriation of agrarian and natural resources.
An older historical perspective, from the 1970s, accords elites a pivotal role in fostering economic production in the locality and region, while recognising that these elites got a dominant share of gain in the sphere of distribution. Another view that arises from development models of the 1990s is that the contribution of elites is inimical to the development of the local economy and that it is the role of less privileged social groups that should be focus of research on local development initiatives. These two considerably different analyses of elites at the local level appear to provide mutually exclusive perspectives.
The present paper is concerned with redressing this seemingly contradictory tendency in the study of local elites and resultant impoverishment in our understanding of the role of social groups in achieving strong agricultural performances at the local level. This paper draws on examples of the strategies of social groups and their constituent households in the local economy by both elite and non-elite households. There is a particular focus on the important roles of social networks, as a horizontal linkage and political privilege, as a vertical linkage in ensuring the success of local elite groups is investigated by setting up a multi–layered patron client framework. This framework is used to study the consequences of multi–layered patrons and clients for the ability of local groups to acquire physical assets and local legitimacy in the locality and region. The official–elite interactions in the Doab are subsequently examined in the explicit terms of vertical and horizontal political linkages within the multi–layered patron client framework. This political economy perspective provided by the patron–client analysis brings new insights on how horizontal and vertical relations determine the ability of local elites and non-elites to acquire economic resources and political dominance in the local environment.

Barbara Harriss-White (University of Oxford): ‘Pudumai’-Innovation and Institutional Churning in India’s Informal Economy

Background: Were India to embark on a low carbon transition, would the informal economy be a barrier to innovation? This question emerged during  research conceiving the economy as a system producing waste as well as commodities. The pilot project has focussed on the measurement of gaseous waste in India’s informal economy: the 9/10 livelihoods and 2/3 GDP that are out of state control.

http://www.southasia.ox.ac.uk/resources-greenhouse-gases-technology-and-jobs-indias-informal-economy-case-rice

Method: After a critical reading of the complex structure of often ‘fuzzy’ knowledge within which the question has to be answered, three kinds of innovation are defined. These require institutional preconditions formalised in the concept of the ‘innovation system’ whose elements, adapted to the informal economy, structured field research in a town in northern Tamil Nadu studied regularly since 1972. India’s ‘subaltern urbanisation’ is frequently described as neglected, deprived – and by implication un-innovative. Recent innovation histories were provided by the presidents of small town business associations regulating and representing sectors operating substantially in the informal economy.

Results: Some instances of invention, several of adaptive innovation and an explosion of technological and organisational change resulting from adoptive innovation were described – alongside much creative destruction. A continuum of routine knowledge-practice was essential to innovative behaviour and was being informally formalised through certification. Rapid growth is churning the regulative ecosystem and generating novel institutional hybrids. While labour innovated and forced some institutional change, and while capital made innovations in and for the labour process, low caste wage workers were marginalised from the institutional ferment. 

The institutional matrix in which innovation develops is constituted through the family firm (self-employment); institutions of identity (caste, religion and gender); business associations (innovations+ federation, certification, cosmopolitanisation); private and public, formal and informal education (much affected by class and identity); banks (for working capital, electronic  transactions and loans); the hoarding of gold (as a hedge against risk); mobile phones and the state. The state itself is innovative and engages with the informal economy selectively and indirectly. Formal and informal institutions are dynamically unstable and not coherent. They do not seem to form an informal ‘innovation system’. Of course India’s informal economy is moving away from a low carbon transition but, from this case study, it is far from being un-innovative.

Tahir Kamran (University of Cambridge): “A Farce, a Mockery and a Fraud” Contextualising Provincial Elections in 1950s

The electoral politics during the initial phase of Pakistan’s political history had been turbulent to some extent. Extreme centralization and the predominant role played by the executive in the conduct of four provincial elections had been very important in the final outcome of the electoral exercise. In the provinces of Punjab, Sindh and N.W.F.P. state authority remained at the beck and call of the Muslim League leadership. The opposition was intimated and its members were subjected to various atrocities including incarceration and physical abuse. As a consequence, Muslim League managed to secure victory but it set an inevitable trend for the forthcoming generations. In East Bengal, however, state authority could not do much and Jugtu Front swept the polls in 1954. In this paper, electoral politics in Pakistan is telescoped and the various anomalies and indiscretion committed during the provincial elections in the 1950’s have been brought into focus.

Tomas Larsson (University of Cambridge): Institutions and their origins: Insights from Southeast Asia

Do “institutions rule”? That is to say, are development outcomes determined by the presence or absence of particular social institutions? If so, which institutions rule? And what are the historical and political origins of institutions that support economic development and poverty reduction? This paper addresses these questions by drawing on evidence from Southeast Asia. The paper explores the quality of institutions in the region, surveys evidence for the theorised causal link between institutions and economic development, and discusses recent scholarly debates about the origins of the “right” kinds of institutional matrixes in Southeast Asia.

Adeel Malik (University of Oxford) :Religion, Land and Politics: Shrines and Literacy in Punjab

Shrines occupy a prominent place in the religious, cultural and political life of South Asia. The shrines and their guardians (commonly described as pirs) have traditionally acted as important nodes of power, serving as intermediaries between the ruler and subject. A large body of literature has studied their impact on religious and political environment (a selected list includes: Aziz (2001), Ansari (1992), and Gilmartin (1984)). There is virtually no systematic research, however, on how shrines shape regional patterns of development. This paper offers a first attempt in this regard.

Compiling a unique database on shrines across the different tehsils of Punjab, we empirically explore the association between the presence of shrines and literacy. Our results demonstrate a non-linear impact of shrines per capita: shrines situated in tehsils closer to the river have a differential impact on literacy than those in tehsils farther from the river. Tehsils with riverine shrines tend to have systematically lower literacy rates. We show that this negative effect of riverine shrines on literacy is primarily mediated through politics. Moreover, shrines considered important in the colonial era are more likely to select into politics in post-partition Punjab. We argue that the greater presence of shrines in riverine tehsils produces a confluence of three resources—religion, land and politics—that together constitute a powerful structural inequality with potentially adverse consequences for development. 

Nayanika Mathur (University of Cambridge): Paper Tiger: Bureaucratic Everydayness and the Developmental State in the Indian Himalaya

The objective of this paper is to work through a mocking phrase – ‘paper tiger’ – that is believed to be a particularly apt descriptor of the regularly reported and much puzzled over peculiarities of the faltering Indian state. The disjunctions between paper and reality, what the official records say and what beneficiaries of development schemes themselves claim are most commonly put down to a corrupt and/or an
inefficient state. In my attempt to rethink this non-correspondence between official records and that which is considered real, I depart from this work. I do so by tracing the everyday life of the National Rural Employment Guarantee Act, 2005 as it moved through the state bureaucracy of Uttarakhand. This paper is based on 18 months of fieldwork in India. By locating my ethnographic gaze within government offices and amongst the piles of paper they house and through an articulation of bureaucratic everydayness, I present an alternative understanding of why and how NREGA became difficult to implement in Uttarakhand. Questioning the unproductive normativity that underpins most discussions of state failure, I instead highlight the logic, practice and materiality of contemporary bureaucracy, emerging as it does from a particular historically sedimented system of rule in India. Ultimately I show how the phrase ‘paper tiger’ can acquire popular currency but also its inherent inadequacy to function, in and of itself, as an instrument of critique.

Kamal Munir (University of Cambridge): Privatization in Pakistan: One Step Forward, Two Steps Back

The new government, which took power in Pakistan in May 2013, arrived on the back of an extensive development agenda. The promised reforms included pro-poor economic policies, extensive programmes for improving health and education, and solutions to the energy crisis. After less than a year, in 2014, all these plans seem to have made way for a one-point agenda: privatization. As the government unleashes this wave of privatizations, it is pertinent to examine Pakistan’s past experiences with privatization of state-owned institutions and enterprises. In this paper, I analyse privatizations in three key sectors: banking, telecommunication and energy. Based on extensive data collected across these three sectors, I outline how Pakistan’s economy, development prospects and industrial competitiveness have faced an enormous setback as a result of privatizations (and accompanying government policies) in these sectors. In doing so, I also take a critical look at the popular logic of ‘institutional failure’ given by domestic governments and multilateral agencies such as the World Bank and IMF to justify privatization.

Amanda Perry-Kessaris (University of Kent): How to think about ‘law’ and ‘development’?: the beginnings of an approach provoked by empirical work in Sri Lanka and India

I have completed two empirical studies of the relationships between national legal systems (bureaucracy, legislature, judiciary) and foreign investment, first in Sri Lanka then in India. Each time as I tried to make sense of what I was hearing I felt smothered by the narrowness of my focus, and the thinness of my analytical frame. I had some law, I had some economics, but I could not breathe for lack of a third, more broadly social, dimension. Adopting a sociologically-informed approach both enabled and compelled me, a legal researcher possessed with the limited empirical skills and interdisciplinary attunement fairly typical of the time, to consider multiple social groups (civil society and government actors as well as foreign investors); and at the same time to consider complexities and (dis)continuities in their relationships with, through and despite law. I am still working on the approach, which increasingly includes a visual dimension.

Jaideep Prabhu (University of Cambridge): Frugal Innovation/Entrepreneurship and the Informal Economy

The World Bank estimates that four billion people around the globe—more than half the world’s population—live on the fringes of the formal economy. Many of these people live in South Asia and face significant unmet needs in core areas such as health, education, energy, food, and financial services. For years this very large part of the population was either the target of aid or was left to the mercy of governments. More recently, however, private sectors firms, both large and small, have begun to see those at the bottom of the pyramid as a market opportunity and have begun to design market-based solutions to meet their needs. In this talk I will discuss the phenomenon of frugal innovation—the creation and distribution of good-enough solutions that employ minimal resources—to solve the unmet needs of large numbers of people in South Asia and around the world. The talk will highlight examples of frugal innovation by social entrepreneurs, emerging market firms and multinationals, and will discuss the role that institutions (and their lack) play in helping or hindering such innovation.

Sanjay Ruparelia (New School for Social Research): The antinomies of the postneoliberal welfare state in India

Since 2004, India has witnessed two major efforts to create a new welfare architecture in response to rising democratic pressures against growing socioeconomic inequalities.  On the one hand, New Delhi has introduced a series of landmark national acts that legislate a right to new civic entitlements.  These range from the Right to Information (2005), National Rural Employment Guarantee Act (2005) and so-called Forest Rights Bill (2006) to the Right to Education Act (2009), Right of Citizens for Time Bound Delivery of Goods and Services and Redressal of Their Grievances Bill (2011) and National Food Security Bill (2012).  
According to many, the introduction of these national acts and pressure to extend their purview to other domains signify a distinct social contract in modern Indian democracy.  On the other, New Delhi has launched many large-scale initiatives of systematic institutional reform in order to renew the purpose, capacity and foundation of the state.  The most contentious is the Unique Identification Authority of India, which aims to provide a biometric identity card (UID) to every citizen, in order to enable direct cash transfers of many social benefits.  Proponents claim that a UID will reduce fraud, governmental inefficiency and scarce fiscal resources.  Critics worry that its logic of governmentality will threaten civil liberties and slowly undermine the developmental apparatus of the state.
What explains these two divergent attempts to transform the provision of basic social welfare in modern Indian democracy?  How are the rights enshrined in these landmark acts conceptualized, operationalized and pursued?  What are the promises, risks and challenges of securing different civic entitlements through a system of direct cash transfers and formal statutory rights?  Does their combination herald a postneoliberal order that can address the deep structural determinants of inequality in a country such as India?  Or does it represent the latest attempt to secure the legitimacy of a neoliberal capitalist state amidst the widening socioeconomic disparities that mark contemporary Asian societies?
This paper engages these questions.  First, I argue that India’s new welfare paradigm has two distinct foundations.  On the one hand, many of its landmark acts employ the language of citizenship, recognizing that individuals have a right as citizens to demand enhanced universal entitlements that previously took the form of selective government benefits to targeted population groups.  But other pieces of legislation, particularly those attempting to eradicate corruption in the provision of basic government services, conceptualize citizens as consumers. Second, a major feature of India’s new welfare paradigm is the explicit nexus drawn between political corruption and socioeconomic inequality, as many neoliberals would contend.  Indeed, the need to eradicate governmental corruption is the primary justification for creating a system of direct cash transfers through the UID project.  Yet many of India’s landmark social acts also contain innovative governance mechanisms, largely in response to demands from grassroot social movements, which seek to enhance political transparency, responsiveness and accountability of the state.  The unintended collective effect of these reforms is an innovative state- building project that aims to enhance the capacity of the state to ‘see its citizens’, yet curb the danger of authoritarian high modernism by allowing the citizenry to ‘see the state’.  In short, the attempt to build a new welfare architecture in India that expands civic rights while enhancing the power of governmentality simultaneously deepens and resists the logic of neoliberalism.  The result is a new model for the postneoliberal welfare state.

Antonia Strachey (University of Oxford): Travancore State: A Fiscal History

This paper investigates the fiscal behavior of Travancore State an independently ruled kingdom within colonial era India. After independence, this region was the largest component of Kerala State. The precedent for high levels of social spending created by Travancore is reflected in the stand out performance of Kerala in development indicators to this day, particularly in health and education.
Using a rare source of official statistics collected from archives in Kerala, this paper presents the revenue and expenditure history of Travancore State from the late 1910s to the late 1940s. The data is sufficiently rich to enable a decomposition of both the expenditure and revenue side. This allows, for example, a presentation of the changing composition of state revenue over time as well as the evolution of expenditure patterns.
This study is the first of its kind to investigate in depth the fiscal history of any of the 500 Princely States in colonial era India. Travancore is atypical since it was arguably the most bureaucratically advanced Princely State and was possibly also more advanced in that respect than British India. So Travancore should not be treated as typical of all Princely States. However studying the history of this advanced and idiosyncratic state will enrich our understanding of Kerala’s extraordinary development achievements.

David Washbrook (University of Cambridge): Disentangling the Web: Land Rights and Economic Development in Colonial India

Do land rights matter to economic development ? No subject entertained India’s British rulers more nor led to the spilling of so much ink and the expenditure of so much energy.  However, with a few exceptions, the developmental results of British socio-legal engineering were uniformly dismal – and the exceptions also scarcely prove the rule. In places like the Andhra deltas or the ‘wheat-belt’ of eastern Punjab and West UP, development took place across a broad range of different land ‘tenures’, which made little tangible difference to its outcomes.  It is tempting to think the issue a (near-deliberate) distraction: to place the onus of responsibility for (un-) development on the land ‘owner’ and away from a state which chronically failed to supply infrastructure and a market lacking in access and incentives.  Yet, in other ways, land rights certainly did matter. In passing responsibility for development to the land ‘owner’, colonial law helped to undermine networks of rights (and mutual obligations) previously linking the land ‘controller’, on the one side, to the state and key social corporations and, on the other, to labour. These older rights and obligations, although justified in terms of sovereignty, worship and/or subsistence, had possessed their own developmental dynamic, which now became broken. It was increasingly possible to ‘own’ and exploit land without contributing to growth of the social product. This paper explores the ‘unmaking’ of an older agrarian order and the hiatus in its functioning occasioned by the colonial intervention – waiting on a ‘re-making’ which is still far from complete.

S Akbar Zaidi (Columbia University): Subsidizing the Pakistani Elite: Aid, Taxation, and  Under-development

With high rates of tax avoidance by Pakistan’s elite and the rich, tax payers from countries supporting Pakistan’s development initiatives have been subsiding Pakistan’s elite. Pakistan’s ruling elite are unwilling and loathe to tax themselves, and exploit the country’s geopolitical vulnerabilities, extracting rent for many strategic alliances. Powerful and influential western governments and their leaders parrot the Pakistan-is-too-important-to-fail mantra, which suits Pakistan’s elite perfectly, as the economy is constantly bailed out. Both Pakistan’s elite and western governments are equally to blame for the absence of more equitable taxation efforts in Pakistan. This continued dependence on western donor agencies and governments, also compromises developmental efforts as much as it does domestic efforts to raise revenue and savings. Furthermore, since much aid has come directly to the military or to military governments, this has also helped strengthen authoritarian and non-democratic institutions and forces. The paper will examine aspects of development and underdevelopment, aid and taxation, and the nature of the state these relationships give rise to.