Locked in Place: State-Building and Late Industrialization in India

This is a very clear structural analysis of the Indian development state during the Nehru years. Among all the newly independent third world nations, India seemed the most likely candidate to become an industrialised state. But by 90’s India became an example of a failed development state. The usual neoliberal argument regarding this is that the whole idea of state intervention and market regulation itself is the cause of the problem. Vivek Chibber here through clear arguments shows that the problem lay at a deeper structural level in the institutions of the state and their relationship with the capitalist classes who opposed any regulations and disciplinary actions by the state.

With socialism never really on the cards, INC always show more considered a state led planned economy to be the model for independent India. Indian business class didn’t exactly oppose state intervention, they wanted the state to intervene but only in the form of protecting the local industries, subsidisation and providing the capital. What they were opposed to was the state directing the capital and imposing disciplinary action. The only leverage the state had against the business class was the organised working class, but INC demobilised the labour immediately after independence making the capitalist classes very powerful. With the opposition from the monied classes and the ministries who didn’t want a planning commission over them, this led to the creation of very weak planning apparatus with little power to coerce or punish industries. Chibber presents the weak state apparatus along with the organised opposition from the capitalist class against the state as the reasons for the failure of the Indian development state. He contrasts this with the South Korean case where the development state was very successful. The reason being that South Korea had both a very strong state apparatus with transparency and proper flow of information and because of their export led industrialisation strategy, the capitalist class there had found it rational to accept the state’s regulation and control.

He also goes on to give a clear analysis of why even after the top bureaucrats and economists realised the problem as early as 1957, they couldn’t reform the institutions. Instead of reform what happened eventually was deregulation and liberalisation.
A good work on the political economy of a developmental state. show less