Matthew McCartney

India : the political economy of growth, stagnation and the state, 1951-2007

McCartney, Mathew, Pakistan - The Political Economy of Growth, Stagnation and the State, 1951-2009, Routledge, London and New York, ISBN13: 978-0-415-57747-2 and ISBN13: 978-0-203-81476-5, 2011, pp. 241.This book is, one can assert without a doubt, sui generis, unique in that it provides an entirely new perspective on the development of Pakistans political economy. It is a thorough and objective analysis, an eye-opener, and the author leaves no stone unturned.At the outset, the book critiques conventional regression-based investigations of growth in developing countries. The author then focuses on the theoretical and develops a model in order to analyze and evaluate the role of the state in economic development. Essentially, he asserts that the state has three functions: First, a financial role in channeling the economic surplus to those individuals who are able to invest productively; second, a production role to ensure that such financial resources are utilized productively, which involves either raising productivity or upgrading to a higher technology market niche. According to McCartney, the state has a crucial role in both encouraging and facilitating learning by the private sector. Third, the state utilizes institutions to act as a mediator between conflict and economic growth.The author asserts that conflict is an integral part of the process of growth and, further, that economic development and political stability are two entirely different and opposing processes. Conflict is almost an inevitable part of economic growth, which involves significant changes in property rights and income distribution. Not considering the role of conflict and its centrality in growth would be to ignore a central aspect of Pakistans political economic development. A repressive state, an inclusive state, or an ideological state can help lessen the negative fallout of conflict on development. The author elaborates at great length on this later in the book. This perspective on the political economy of Pakistan is both unusual and insightful.Following the introductory chapter, the author provides fairly scathing criticism of orthodox analysis of economic growth in developing countries. The use of averages, according to McCartney, conceals an important empirical reality of the process of growth. These, he states, are the structural breaks and phases of expansion and stagnation that are typical of the growth process. He adds that there are numerous problems with uncovering any link from policy to growth.The book in its entirety is schematically and methodically divided into episodes of growth and stagnation between 1951 and 2008. According to the author, there are three episodes of growth, 1951/52 to 1958/59, 1960/61 to 1969/70, and 2003/04 to 2008/09, while the two episodes of stagnation include 1970/71 to 1991/92 and 1992/93 to 2002/03. …

Episodes or Evolution: The Genesis of Liberalisation in India

This article begins by looking more closely at a debate now widely forgotten—that of liberalisation under Rajiv Gandhi in 1985–86. It is widely assumed this earlier attempt to liberalise the economy was only short-lived and 1991 marks the true turning point in policy reform. This article finds that arguments trying to simultaneously reconcile stalled liberalisation in 1985 with sustained liberalisation after 1991 (elite politics, reform by stealth, clever political management, elite psychology) do not convince. This article seeks to demonstrate that 1991 marked not a break but a continuation of liberalising economic policies. By shifting liberalisation back well before the structural break in growth (widely acknowledged to have occurred around 1980) its candidature as an explanation for that increase in growth needs again to be carefully considered.

Pro-business and pro-market reforms in Pakistan: economic growth and stagnation 1950–51 to 2011–12

ABSTRACT This paper uses a new method to analyse the causes of growth and stagnation in Pakistan between 1950–51 and 2011–12. It provides support for the argument that pro-business reforms have been an important driver of Pakistans economic growth. This result holds across two episodes of growth and one episode of stagnation. These findings lead to a clear policy implication: if Pakistan is to return to fast growth, policy needs to move away from pro-market reforms, learn these lessons of history, and promote the profitability of business to incentivise private investment and so boost economic growth.

Book Review: Sameer Kochhar and M. Ramachandran (Eds), Building from the Bottom: Infrastructure and Poverty Alleviation:

As indicated by its title, the book sets out to explore various aspects of history; however, at times this makes it difficult to follow. Though covering a wide range of areas and being generally well written, the chapters tend to jump a lot between different topics. As indicated, some essays provide valuable insights, while others lack the same nuanced approach. In the essay focusing on Assam Tea Plantations, Kanailal Chattopadhyay states that ‘[r]eason and judgment took the place of faith and belief, superstition yielded to science’ (p. 271). This ignores the implicit nature of relegating belief to a lesser position, creating a dichotomy between ‘reason’ and ‘belief ’. This is in direct contrast to an essay focusing on ‘the popular’ in Bengali literature by Nupur Dasgupta, whose efforts seek to dispel socio-religious binaries (p. 73). This well-produced book provides the reader an overview of the areas of study Ray focused on in his career. This, coupled with the insight it provides into a broad range of historical themes, makes it an impactful piece of work, although some revision of the structure of the book would make it even more effective. There are some typing errors, which detract from the flow, but overall this was a good book to read for a historian. Importantly, this book shows and confirms how complex the construction of history is, how perspectives can be contested and how historical paradigms are constantly challenged. It is useful for students and academics alike who are interested in the dynamic construction of history between the sixteenth and the nineteenth century and the consequent contestations that surround it. This book illustrates well, in particular, how the use of new and old primary source material and tireless intellectual rigour are so vital for the renewal and evaluation of accepted historical truths.

Book Review: Rabindra Ray, The Naxalites and Their Ideology

representations of mothers and children in a variety of South Asian contexts. South Asian studies have taken the gender-critical turn longer ago than other more conservative disciplines of the humanities. The time might be right now to engage at a deeper level with this specific issue of mothering, and not only with motherhood or mother–goddesses. The large scope of theories and concepts developed by motherhood studies could be useful to enhance our comprehension of culture, family and selfhood in South Asian cultures. Further, several examples drawn from South Asian historical or contemporary discourses, practices, and representations, whether in literature, religion or the arts, could provide scholars of motherhood studies with a glimpse of what mothering could be (and is) outside the institution of Western patriarchal motherhood that remains the principal focus of their analysis and criticism. As is the case with certain feminist theories, some of the ‘maternal theories’ developed by (mostly) Western scholars reach their limits when confronted with South Asian examples. Though this book may not have developed to its full extent the fruitful interdisciplinary potential of bridging South Asian studies with motherhood studies, it sketches innovative paths and lays foundations for further research at this overlooked connection between these two specialised areas of scholarship.

India's Economic Transition: The Politics of Reforms

Debates about economic development in India have been distinguished by a rich tradition in political economy. The most striking example was the debate concerning the stagnation of the Indian industrial economy between 1965 and 1980. Writers such as Jha, Bardhan, and Mitra attempted to explain this economic phenomenon by variously utilising theories of intermediate classes, dominant proprietary classes and class coalitions. This work looked at the big picture, the state, class and history, it was radical in origins – drawing on Marx in particular. If the stagnation debate is now neglected in an era of 9 per cent annual growth, it remains a fascinating and stimulating one. As the Indian economy revived in the early 1980s, political economy analysis withered as an a-historical, neo-liberal orthodoxy wrapped economics in a suffocating embrace. The study of the Indian economy after 1991 has focused nearly exclusively on the depth and pace of liberalisation. Passing mention is sometimes given to ‘special interest’ groups with a vested interest in preserving some aspect of government intervention. Political economy has thus become an aneamic product of market distortions, something to be swept away by determined liberalisers. Thus, we come to Mukherjis edited volume, subtitled ‘the politics’ of reform but, delightfully, actually more a reminder that excellent political economy analysis can continue to inform our understanding of the Indian economy. Mukherji also chooses a very specific niche – that of the process of policy making rather than providing yet another discussion of the outcomes of liberalising economic reforms. There is no party line in this collection of 15 essays, they complement and they contradict to stimulating effect. Bhagwati (chap. 1) sees the 1991 crisis as an inevitable product of a fundamentally flawed development strategy. Patnaik and Chandrasekhar (chap. 2) make a case that the real economy was doing well in 1990–1991 and the narrowly financial crisis was in fact a product of earlier misconceived financial liberalisation. Ahluwalia (chap. 3) argues that democracy in a heterogeneous society will generate a politics of gradual reform. Jenkins (chap. 6) shows how the skills generated in an environment of fluid competitive politics can help the state divide opponents and so better pursue an agenda of liberalisation. Varshney (chap. 5) looks at a big, broad question of when reform enters mass electoral politics and when instead it remains a minority concern in the realms of ‘elite politics’. Mukherji (chap. 10) provides more of a microscope and compares the pace of reform between two specific sectors (telecommunications and power). Other essays deal with external actors (Kirk, chap. 10), the stock market (Echeverri-Gent, chap. 11), labour (RoyChowdhury, chap. 13), Business (Kochanek, chap. 14). More attention in the introduction to drawing out some of these key themes would have been useful. One interesting recurring theme is the role of the multilateral instititutions. For Bhagwati (chap. 1), liberalisation was not an alien idea imposed by the IMF and World Bank, it was developed by Indian nationals in the government and academies (p. 48). For Patnaik and Chandrasekhar (chap. 2), the World Bank and IMF were key instigators in the ‘silent coup’ (p. 55) of a minority liberalisation lobby. Kirk (chap. 9), in a more extended dicussion, sees the World Bank as a tool in the hands of the central government in New Delhi. Fiscal retrenchment and cuts in public investment had reduced the ability of the centre to influence state policymaking. Conditional lending by the World Bank, ultimately under the discretion of the centre enabled the centre to indirectly push states down the path of reform. Journal of Development Studies, Vol. 44, No. 8, 1236–1242, September 2008