Decades Of Economic Reform Research Articles

Impact of Foreign Direct Investment on Indian Economy

Foreign direct investment (FDI) is an instrument for economic growth; it strengthens domestic capital, productivity and employment. FDI in India has got an important role in the development of the Indian economy. FDI in India has enabled India to achieve a certain degree of financial stability, growth and development in various ways. It has allowed India to focus on the areas that needed a boost and economic attention, and to address the various problems that continue to challenge the country. India has worked a lot to attract FDI from the world’s major investors. FDI is vital in the up gradation of technology, skills and managerial capabilities in various sectors of the economy. With globalization, developing countries, particularly those in Asia, have been witnessing an immense surge of FDI inflows during the past two decades. India with its considerable market potential and a liberalized policy regime has sustained its attraction for foreign investors. This research paper aims to observe the impact of FDI on Indian economy, predominantly after two decades of economic reforms. The paper provides the major policy implications from this analysis. The attraction of foreign direct investments (FDI) is often emphasised as a precondition for a successful economy by most governments of less developed countries. The objective of the paper is to evaluate economic impacts of FDI

Look (Act) East Policy and Northeast India Achievements, Expectations and Realities

The government as well as a large section of experts claimed that the Look (Act) East Policy (LEP) could become an instrument of economic development for Northeast India through the expansion of trade and investments to the East and Southeast Asian countries. The claim is not only due to the strategic location of Northeast India but also to the abundant resources and potential for trade in the region. In this light, the present paper examines the achievements of Northeast India in terms of expansion of trade and investments during three decades of the LEP. The paper argues that the policy has failed to augment exports and also could not contribute to the economic development of the region as the region still continues to decelerate in socio-economic parameters, largely depending on central grants and aid. Moreover, Northeast India could attract a negligible amount of foreign direct investment even after three decades of economic reforms and the LEP. Finally, the paper also made a reality check of the ‘export-led growth’ strategy for the region, especially under the aegis of Act East Policy, given the stress on ‘connectivity’ development projects with South Asia, East Asia and Southeast Asia, where Northeast India is centrally located.

Foreign Direct Investment in India: A Trends Analysis

Foreign capital plays an important role in the development of developing countries whose domestic capital is not sufficient to fulfill their domestic requirements. Foreign Direct Investment (FDI) is an important part of the foreign capital which fills this gap in the domestic savings and thus plays a crucial role in the developmental process. This paper tries to analyze the trends of foreign Direct Inflows in India during the period 2000-01 to 2020-21. Our analysis shows a sharp rise in the FDI inflows in India during the chosen study period which is the period after a decade of economic reforms in India. However, the study shows some fluctuations in the FDI inflows which have been analyzed in the paper.

Educational Inequality between Genders in Rajasthan

Rajasthan's females are facing a challenge in reducing the gap between males and females in the field of education. Even after three decades of economic reforms, the country has not been prosperous in fully utilising its females in education to develop the economy. This study aims to know the status of female education in Rajasthan and throw light on female and male present educational trends. The study uses National Statistical Organisation (NSO)’s Periodic Labour Force Survey (PLFS) 2020-21 unit level data to explain the trends. The study also suggests that there should be solid legislations and regulations on gender balance by central/state government and policymakers in giving females proper opportunities in education to contribute to the economy.

Financial repression and financial risk: the case of China

ABSTRACT Despite more than three decades of economic reform, China’s financial repression still remains. Implicit state guarantees continue to be widespread while government interventions are pervasive in almost all economic activities, from determination of bank lending and deposit rates to selective allocation of credit and initial public offering quotas, as well as having majority control of large financial institutions. These financial distortions come with costs which have become heavier over time, particularly after 2008. This paper attempts to provide an integrated perspective in examining how financial repression in China has led to economic imbalances that elevate financial risk, particularly in the midst of ongoing US-China trade tussle and the Covid-19 pandemic.

The emergence of China, Inc.: behind and beyond the trade war

PurposeAnswering the call to study important issues in the real world (Buckley et al., 2017; Delios, 2017; Phan, 2019), and motivated by the trade war between the US and China, the authors look beyond it to examine the more fundamental issues behind it. From a political economy perspective, the authors examine the interplay of government, society and firms in China to identify new phenomena that may impact business with, and research on, China.Design/methodology/approachA multi-case qualitative method is used to present and analyze evidence and develop our arguments. Specifically, we use scholarly sources, anecdotal evidence, reports, statistics and government documents and policies to support our arguments.FindingsAfter four decades of economic reform, the Chinese Communist Party (CCP) controls every aspect of the society. Living, working and doing business are not a right but a privilege granted by the party. To a great degree, state-owned firms are business units/subsidiaries, and private/foreign firms are franchisees of the party, with the party leader being the CEO of China, Inc. The interplay between China and other countries is essentially a competition between a huge corporation and other states.Practical implicationsAt the firm level, our study suggests that for MNCs dealing with Chinese firms, they need to know that Chinese firms are units of China, Inc. Practitioners should take into account the long-term strategic goals of the CCP as well as business considerations when dealing with Chinese partners or competitors.Social implicationsAt the country level, our study shows that other countries dealing with China must be aware that they are dealing with a huge corporation.Originality/valueThat the CCP runs China as a corporation is a new perspective that will help the international community reexamine global competition.

Two decades of economic reforms: the institutions of regulation in Brazil. 1991-2011

L’expérience brésilienne de la réforme de l’État dans l’administration publique a abouti à la création d’un nouvel ensemble d’organismes de réglementation administrés avec la rationalité d’une bureaucratie wébérienne. Plusieurs des directeurs et des commissaires de ces agences, bien que nommés pour des raisons politiques, étaient des fonctionnaires de carrière. Le système n’était pas exempt de problèmes - certains administrateurs, principalement dans les plus petites agences, n’étaient pas qualifiés et étaient le produit du clientélisme et de l’influence politique de groupes de pression. Mais dans ces cas-ci, la présence de la presse et d’autres types de freins et de contrepoids réduisent la capacité d’action préjudiciable de ces administrateurs. Enfin, l’autonomie de facto des agences n’était pas aussi large que prévu dans le projet initial, mais cela n’est certainement pas incompatible avec une bureaucratie rationnelle - dans la mesure où il existait un contrôle démocratique de la politique publique. Par conséquent, le projet technocratique visant à créer des agences de réglementation très similaires au modèle américain n’a pas abouti. Il n’a pas été possible de séparer complètement les pouvoirs politique et réglementaire. Mais l’État a été modernisé et la qualité des gestionnaires publics s’est améliorée. L’intervention de l’État n’a pas été aussi active que pendant la période développementaliste - mais l’État n’est pas devenu aussi petit que prévu dans les projets néolibéraux des années 90. Le rôle de l’État change, mais moins que prévu. On peut à la fois trouver des preuves de changements et de continuités dans cette histoire. Enfin, les expériences brésiliennes montrent que les institutions et les modèles institutionnels sont fortement dépendants de leur propre trajectoire.

The logic of four decades of economic reform and major breakthroughs in political economy in China

Purpose In the process of reform, although every landmark theoretical breakthrough is marked by the speech of the highest leadership of the Communist Party of China (CPC) or the decision of the CPC National Congress, each breakthrough is attributable to the theoretical contribution made by the academia of political economy. Notably, these theoretical breakthroughs invariably embrace innovations in the discourse system of political economy. The paper aims to discuss this issue. Design/methodology/approach The innovations and breakthroughs thereof have led to the political economy of socialism with Chinese characteristics. Findings The success of China’s economy highlights the superiority of the socialist economic system and development path with Chinese characteristics. Originality/value These major breakthroughs are accompanied by breakthroughs in relevant theories, which constitute a synthesis of a series of major theoretical innovations in political economics.

Are “left-behind” children really left behind? A lab-in-field experiment concerning the impact of rural/urban status and parental migration on children's other-regarding preferences

Abstract Other-regarding preferences have a profound influence on both individual and societal success. In this paper, using a unique sample from China, we study the impact of two family background characteristics: parental migration and rural/urban status on both the level and the developmental formation of other-regarding preferences during childhood. Decades of economic reform have led to an unprecedented growth of economically driven rural-to-urban internal migration in China. Many migrant parents leave their children behind. According to figures from China's 2010 census, more than 61 million children from birth to 17 years were “left behind.” In this lab-in-field experiment, we use three simple allocation games to study samples from four populations: rural children left behind by both parents, rural children left behind by one parent, rural non-left-behind children, and urban children. We expected that the development of altruistic preferences would be positively associated with parental presence. However, we found this was not the case. In fact, among rural children the development of altruistic preferences from Grade 3 to Grade 5 was most pronounced among those who were left-behind by both parents. Moreover, by Grade 5, it was these children whose preferences most resembled those of the urban children.

Are Mergers and Acquisitions Necessarily Anti-competitive? Empirical Evidence from India’s Manufacturing Sector

Policy initiatives and regulatory changes made during the last two-and-half decades of economic reforms have led to a considerable increase in the number of mergers and acquisitions (M&As) in the Indian corporate sector. Given the policy-induced flexibilities, while the domestic firms have taken the route of mergers to restructure their business and grow, the foreign firms have preferred to enter into specific markets through acquisitions and raise monopoly power therein. In this context, the present article attempts to examine the impact of M&As on market the structure in major industries of the Indian manufacturing sector during the post-reform period. Using a panel dataset of 34 major industries for the period 2001–2009, the article finds that M&As do not necessarily cause any appreciable adverse impact on market concentration. Instead, the degrees of sellers’ concentration are influenced by the growth of market, capital intensity, firms’ advertising efforts and their financial performance. The findings of the present article, therefore, suggest for a rethink on policies and regulations relating to M&A, international trade and intellectual property, as they play a significant role in enhancing firms’ competitiveness and restricting the emergence of a monopolistic power. JEL Classification: L1, L4, L5, O3

Impact of Technological Change on Employment: Evidence from the Organised Manufacturing Industry in India

This paper makes an attempt to understand the impact of technological change on employment in the organised manufacturing industry in India during the period 1981–1982 and 2014–2015. It classifies the manufacturing industry in India into capital-intensive industry and labour-intensive industry, and applies the Log Mean Divisia Index—a complete decomposition model—to examine the effect of pre-defined factors such as (1) activity effect (scale effect), (2) structural effect, and (3) intensity effect (technological effect) on employment change in the manufacturing industry in India. The study dissects the specified timeframe from 1981–1982 to 2014–2015 into the pre-reform period (1981–1982 to 1990–1991), the first decade of economic reform (1991–1992 to 2000–2001), and the second decade of reform (2001–2002 to 2014–2015). Although the estimated effect of each factor on employment change varies across different periods, it is found that the increasing manufacturing activity raised the employment in the industry. The positive contribution of activity effect on employment generation in the industry, however, has been reduced by negative labour intensity effect or technological progress. Although the structural effect on employment is observed to be different in diverse timeframes, its impact on employment change in the industry is negligible. The findings of the study may be useful for evidence-based policymaking to meet the National Manufacturing Policy (2011) target to raise the share of manufacturing from 15% to about 25% of the national GDP, and at the same time creating an additional 100 million jobs by 2022.

Is India’s Economic Growth Inclusive? A disaggregated level analysis.

Indian’s two decades of economic reforms has always been a matter of great interest among the development professionals, policy makers, and political leaders. To address that several studies have been conducted, however this study uses a uniquely available longitudinal data to assess how inclusive the benefits have been accrued at state level. The studies shows across states between 1993 and 2005 the real per capital income in villages which are far away from the center of economic activities (in case of this study its town) declined, however the villages which are closer to the center of economic activities their real per capital income increased. The trends persist not only for economic variables, rather that is true for health outcome, education attainment, and social networks. The debilitating effects of “distance from the center of economic activities” need to be countered through connecting outlying villages with more and better physical and social infrastructures

Globalisation and Gender Inequality: Evidence from Labour Market in India

This paper examines quantitative and qualitative dimensions of employment issues in India from gender lens. Inequality in quantitative aspects have been analysed gender gap in work participation, composition and structure of employment. The study finds that female work participation in India has declined sharply despite faster economic growth and improvement in female literacy outcomes. The magnitude of decline is sharper in case of illiterate, women from less privileged class and rural backgrounds. Similarly, even after two decades of economic reform, female workers are highly concentrated in low productive, less remunerative and unpaid family labour category of self employment activities. Considering the qualitative dimension of jobs, the paper finds that the condition of female workers are more vulnerable as they are highly concentrated in informal sector and informal jobs with no employment security, no social security, and are being paid relatively lower wages compared to male workers in most of the sub-sector. The paper argues for an urgent policy intervention to ensure access to decent jobs and to provide protection to these vulnerably placed women workers.

Romancing the vulnerable in contemporary China: Love on the assembly line and the cultural politics of inequality

Several decades of economic reform have transformed China into one of the world’s most unequal countries. However, because this inequality has been studied primarily at the structural level, we know little about how it impacts on intimate relationships and affects individuals’ experiences of love and romance. This article engages with this question through a case study of ‘Love on the Assembly Line’, a series of ‘wedding photos’ featuring Chinese rural migrant workers, and the subsequent series of television reports of the same name, dating from 2012–13. It first examines the political-economic context of this minor cultural phenomenon, then examines current contestations over the meaning of love and romance, and finally documents the responses of rural migrant individuals themselves to the project. Combining ethnographic observation, in-depth interviews, and critical discourse analysis, this discussion goes some way towards demonstrating how inequality of emotion can be fruitfully studied, thereby advancing a new and alternative approach to researching inequality in China – one that views love/romance as a cluster of contested cultural narratives and discourses; as a social practice that involves a particular form of distributive injustice; as an integral part of class politics; and as the product of the interaction of these three realms.

The Enduring Challenges for Collective Lobbying: The Case of China’s Elite Universities

AbstractDuring four decades of economic reforms, research universities have become China’s new national symbol of intellectual prowess. The government has been strategizing and pouring in resources to strengthen their global competitiveness. Despite expanded opportunities, universities have continued to operate within the confines of a tight regulatory regime. Based on interviews with university leaders and executives, this article focuses on China’s first-of-its-kind university advocacy coalition known as “C9” and investigates how the leading Chinese research universities align their interests and act collectively vis-a-vis the central state to influence policies of crucial importance to their operations. It sheds light on how collective lobbying works in the university sector and on its limitations in the Chinese political context and examines the key factors that shape the interactions among universities, the outcomes of collective lobbying, and the political implications.

FDI in India: A Review

Foreign Direct Investment (FDI) is considered to be the lifeblood of economic development especially for the developing and underdeveloped countries. With the start of globalization, many developing countries, mostly those in Asia, are witnessing a huge flow of FDIs during the past two decades. As compared to other Asian countries India witnessed the FDI inflows much later, but ever since India have been a hub and an attractive FDI destination. The present paper attempts to examine the various set of factors which influence the flow of FDI and the impact of FDI on the Indian economy, predominantly after two decades of economic reforms as studied by various research workers.

Economic Growth and Human Development in Indian States after Two Decades of Economic Reforms1

This paper examines the relative performance of 28 major Indian states over the two decades (1990-2010) on economic growth and human development indicators by empirically confirming the two-way nexus between economic growth (EG) and human development (HD) and identifying other important links in the relationship from cross-sectional growth regressions. The paper finds a strong and consistent convergence in indicators of human development across states even as incomes have diverged over the two decades. Further, the classification of the states into vicious, virtuous, HD-lopsided and EG-lopsided categories and the shifts across categories of different states over the two decades reveal the importance of the requirement of simultaneous thrust on EG and HD in order to escape the vicious cycle.

Financial Health of Credit Cooperatives in Maharashtra: A Case of Sangli and Buldana District Central Cooperative Banks

An analysis encompassing two case studies conducted in forward and backward regions of Maharashtra (India) has shown deterioration in the financial health of central level credit cooperatives (Sangli District Central Cooperative Bank (SDCCB)) in forward region and gross inefficiency in their functioning (Buldana District Central Cooperative Bank (BDCCB)) in the backward region of the state, due mainly to their mounting NPAs or overdues’. Because of substantially high NPAs, the fixed expenses of these institutions have been adversely affected, which in turn have grossly affected the break-even levels of loan advances and deposits of these credit institutions, so much so that there has been huge gap between the break-even levels of loan advances and deposits and the actual loan advances and deposits. In the case of BDCCB, the deficit between actual and the break-even levels are so high (about 60 per cent) that it will be well-nigh impossible for it to overcome this situation. High transaction costs, poor repayment performance, and mounting NPAs are the root causes of the moribund state of rural credit delivery through these cooperatives. Further, it is to be noted that the estimated trend over the past two decades in Maharashtra shows a slower growth in institutional finances through credit cooperatives and also in their membership during the decade of economic reforms (1991-2000) as against the decade preceding it (1980-1990). On the other hand, the outstanding loans of these cooperatives have grown at much faster rate as compared to their loan advances during both pre- and post economic reform periods. The slower growth in institutional finance through credit cooperatives during the decade of 1991-2000 is mainly due to adverse environment created by the financial sector reforms. Due to unfavourable policy framework, much of the deposits of the credit cooperatives are going into investments, instead of advancing loans to the farming sector. As a result, the C-D ratios of these credit cooperatives have been adversely affected. With a view to revive agricultural credit delivery through cooperatives, the need of the hour is to adopt innovative approaches like linking of SHGs and NGOs with mainstream financial institutions, including cooperatives. Such linkages are reported to have not only reduced transaction costs but also ensured better repayment performance. In brief, in order to rejuvenate rural credit delivery system through cooperatives, the root problems facing the system, viz., high transaction cost, poor recovery performance, and NPAs, need to be tackled with more fiscal jurisprudence reserving exemplary punishment for willful defaults, especially by large farmers, and the individual cases who have borrowed credit from these institutions. In fact, insofar as rural credit delivery through credit cooperatives is concerned, the focus should be on strategies that are required for tackling issues such as sustainability and viability, operational efficiency, recovery performance, small farmer coverage and balanced sectoral development.

The innovative Indian: Common man and the politics of jugaad culture

The idea of jugaad, or frugal innovation, has gained wide popularity within policy circles and business schools as a breakthrough formula – from a quick-fix solution grown in adverse conditions to a six-point business principle – for economic growth generation. I argue that the new jugaad innovation narrative offers an uplifting, potentially emancipatory discourse of mobility in a setting where even after two decades of economic reforms, wealth gap and poverty stubbornly persist. Central to this shift are two processes. First, a dramatic re-signification of the aam aadmi (common man), within a new conceptual scaffolding of India in relation to modern science and technology, where the ability to innovate is portrayed as a natural gift, a deeply ingrained collective Indian trait that even the unlettered common man possesses. Second, the conditions of adversity and absence of public services for Indian citizens are turned on its head to position India as an ideal laboratory condition within which a culture of innovation takes birth. In short, jugaad enables a dramatic transformation of what was once considered unchanging, static and immobile mass into a source of innovation, inspiration and ultimately socioeconomic mobility.

Australia in the Asian Century

AbstractThe White Paper on Australia in the Asian Century, published in 2012, argued that fundamental policy and attitudinal changes would be required if Australia were to make the most of the opportunities presented by the Asian century. The White Paper presented a challenge to the core narrative that had galvanised support for two decades of economic reforms in Australia, commencing in the early 1980s. The challenge was intended to re‐energise a reform effort that had run out of steam. But Australian policy makers have ignored the White Paper.The core economic policy narrative that motivated Australian economic reforms of the 1980s and 1990s might be labelled Australian mercantilism. The narrative's focus on something called ‘international competitiveness’, and especially its narrow interpretation in the form of the real exchange rate, was bound to generate a policy conundrum when, in the first decade of this century, Australia's terms of trade started to accelerate.Australia's success in the Asian century calls for further investments in national capability: the development of collaborative business relationships with Asian partners; a strong contribution to sustainable security in the region; and deep and enduring people‐to‐people links across a broad sweep of human activity – commercial, social, cultural and political.