This week in Say More, PS talks with Pranab Bardhan, Distinguished Professor Emeritus at the University of California, Berkeley, and the author, most recently, of A World of Insecurity: Democratic Disenchantment in Rich and Poor Countries.
Project Syndicate: In February, you highlighted “the symbiotic relationship between business and political elites under [Indian] Prime Minister Narendra Modi,” the leader of the ruling Bharatiya Janata Party, arguing that rampant political favoritism is impeding India’s economic growth and development. Would the end of BJP rule be enough to bring about the demise of “India’s crony oligarchy,” or are structural reforms or other policy interventions also needed to boost competition? How might such efforts advance the goal of “generating sufficient productive employment” for India’s young people?
Pranab Bardhan: While India’s business-politics nexus has existed for many decades, corporate concentration and the dominance of some favored oligarchs have become more egregious under Modi. This has made the imperatives of structural reform and stronger competition policy much more pressing.
Compounding the urgency, India is now in the brief period in its demographic transition when large numbers of young people are entering the labor force. But good, productive jobs are scarce – a problem that the government exacerbates by supporting favored conglomerates in skill- and capital-intensive businesses in non-traded or protected/heavily-regulated sectors.
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