What political factors influence the allocation of economic patronage in democracies? Answering this question is vital to improving our knowledge of how states and markets interact. In this paper, I argue that changing levels of party centralization can drive important changes in the allocation of state largess. When governing parties are centralized, national party leaders will control sources of patronage, targeting benefits to particularly influential regions and industries. By contrast, when governing parties are decentralized, influential sub-national party leaders will advocate for their constituents, allocating patronage evenly through a national logroll. I find evidence for these relationships by comparing India's distribution process for industrial licenses and government finance under a decentralized Congress Party (1954-61) to its distribution process under a centralized Congress Party (1969-75).
Preface E.Friedman Introduction R.MacFarquhar Two Paths to Modernity B.Gilley ECONOMIC REFORMS Differential Development: Beyond Regime Dichotomies J.Mukherji Chasing China: Can India Bridge the Gap? S.Awamy India's Reform Strengths J.Manor & G.Segal SUB-NATIONAL FACTORS The Persistence of Informal Finance K.Tsai The Political Basis of Decentralization A.Sinha Indigenous vs. Foreign Business Models H.Yasheng & T.Khanna NEW PERSPECTIVES Why Democracy Matters E.Friedman China Rethinks India H.Jinxin Development and Choice A.Saich Conclusion B.Gilley
The Paper traces the evaluation of agricultural credit in India. The first attempt at institutional changes in agriculture saw the establishment of special funds under the RBI and formation of co-operative credit societies. Then came nationalisation of commercial banks and concepts of priority sector lending. Targeted lending along with subsidized interest rate charged by the NABARD characterised this phase. Institutional framework undergoes a dramatic change since the nineties when decentralization occupies the centre stage. Micro credit societies and SHG-bank tie up assume the role of feeder canals of finance in agriculture.
T HE PROLIFERATION OF INTEREST GROUPS and the explosion of group advocacy in the United States and other liberal democracies in the 1980s has led to a renewed attention to the comparative study of interest politics. Among the major questions at issue is the relationship between political, social and economic change and group formation, proliferation, organizational maintenance and group action. Interest group theory suggests that groups proliferate during periods of rapid change. As India approaches its first half century of independence, a study of changes in its interest group system provides an excellent opportunity to attempt to assess the impact of systemic change on interest group development and behavior.' In the decades since independence and especially since 1980, India has experienced an accelerated process of economic, social and political change. The Indian rate of economic growth has increased, literacy rates have risen sharply, the pace of urbanization has quickened and most importantly the size of its middle class has increased significantly. These economic and social changes have been accompanied by striking political and policy changes that include the decline of party, heightened pressure for decentralization and fundamental alteration of India's past model of planned development. These changes have begun to alter the nature and conduct of interest politics in India. India has experienced an increase in the mobilization, proliferation and transformation of groups and significant changes in interest group roles, styles and strategies. As a result the Indian system of state-dominated pluralism in which autonomous groups were overshadowed by an omnipresent state2 is eroding as interest politics have