The Market that Failed: Neoliberal Economic Reforms in India

by C.P. Chandrasekhar, Jayati Ghosh

The explicit adoption of a neoliberal reform programme in mid-1991 by the Indian government was the start of a period of intensive economic liberalization and changed attitudes towards government intervention in the economy. This book surveys the actual experience of the last decade to argue that this strategy has not just failed to deliver sustained growth, but has had damaging consequences from the point of view of employment, poverty alleviation and equity. It covers a wide range of areas, including fiscal and monetary policy, privatization and the experience with foreign direct investment, and analyses the political economy of the reform process.

C. P. Chandrasekhar is Professor at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi. He has published widely in academic journals and is the co-author of Crisis as Conquest: Learning from East Asia (Orient Longman), and Promoting ICT for Human Development: India (Elsevier). He is a regular columnist for Frontline (titled Economic Perspectives), Business Line (titled Macroscan) and the Web site of The Hindu (titled Economy Watch).

Jayati Ghosh is Professor of Economics at Jawaharlal Nehru University, New Delhi. She has authored and co-edited several books and more than 120 scholarly articles. She is Executive Secretary of International Development Economics Associates (IDEAS - www.networkideas.org) and Trustee of Economic Research Foundation (www.macroscan.org). She was the Chairperson, Andhra Pradesh Commission on Farmers’ Welfare in 2004 and Member, National Knowledge Commission, 2004-09. She has consulted for many international organisations, including UNDP, UNCTAD, UN-DESA and ILO. She was awarded the NordSud Prize for Social Sciences 2010 of the Fondazione Pescarabruzzo, Italy, and the ILO Decent Work Research Prize for 2010.

Genres: Economics

260 pages, Kindle Edition

Published September 4, 2017

About the author

C.P. Chandrasekhar is Dean, School of Social Sciences, and Professor at the Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi, India.

Reviews

[Laya · Rating 5 out of 5]

Very nuanced and detailed counter-arguments against the arguments put forth by the proponent of 1990s reforms. The analysis is very well rounded with a historical context too, and my favorite chapter was the political economy of the reforms. Much of the mainstream economic policy discourse in India goes this way - 'Until the reforms we were an inefficient state that was completely flawed in its approach and after the reforms, we have correctex our path and are well on our way to becoming a super power'. Apart from the narrowness of that narrative which focuses only on economic policy, there are problems within this argument. These problems were well analysed by the authors by taking an empirical analysis of all the claims that proponents of reform made to push it through. Must Read for Indian Economists.

[Formed · Rating 4 out of 5]

Puts liberalization, privatization, and globalization in its political economy context and outlines the early justifications for the new orthodoxy we live with. Calls to re-orient reforms toward public investments, employment-intensive manufacturing-heavy growth, universal provisioning, and managed integration of a developmental-state with the global economy. Wish it was written a bit more accessibly for non-economists though.

"World markets are not benign, autonomous forces that spur efficient third world industrialization. On the contrary, they embody all the inequalities characteristic of the world system. Engaging those markets involves therefore using all the weaponry in the hands of a developing country, including the power of its state, the foundation that its home market provides, the ability of its scientific and technical personnel to override the domination implied in the control of technology by a few transnational firms, and the advantages of the late entrant (varying from low wages to a less codified legal framework), to prise open those markets that inequality suggests are hermetically sealed for them."