Law and the Economy in a Young Democracy: India 1947 and Beyond
Law and the Economy in a Young Democracy: India 1947 and Beyond
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Abstract
Economists have long lamented that the inefficient Indian legal system undermines economic activity. How has this come to be? The prevailing common sense is that it is understaffed and under-resourced, given the size of India’s population. This makes adjudication slow and costly. Taking this as given, Law and the Economy in a Young Democracy focuses on the content of the law and its relationship with economic development. It argues that legal evolution in independent India has primarily been shaped by three factors: the desire to reduce inequality and poverty; the suspicion that market activity, both domestic and international, can be detrimental to these goals; and the strengthening of Indian democracy over time, giving voice to a growing fraction of society, including the poor. For the first four decades after independence, the equity-oriented and market-skeptical development strategy adopted by independent India informed a range of interventions by the State. It tried to transfer land as well as to prevent its transfer. A range of private credit transactions were declared illegal. Employer-worker relationships in the manufacturing sector were highly regulated. Environmental law did not incentivize; it prohibited. As policy has become more market-friendly in the recent decades, India has been trying to align itself with global law. More legal and regulatory changes are needed but are opposed by potential losers who, often with good reason, are skeptical of the government’s promises of compensation. Their concerns cannot be ignored by governments that seek reelection. The State’s lack of credibility has slowed legal reform.
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Front Matter
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One
Introduction
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Two
Land Rights: Equity versus Transferability?
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Three
Rural Credit: Overreliance on Law
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Four
Democratic Rights and the Limits of Eminent Domain
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Five
Environmental Law: Judiciary Takes Center Stage
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Six
Law in a Labor-Surplus Economy
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Seven
Politicians’ Burden? The Evolution of Company Law
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Eight
Globalization with a Nationalist Face: Mergers, Acquisitions, and Intellectual Property
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Nine
Property: Equity versus Religious Norms
- Ten Conclusion
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End Matter
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