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Abstract
Since its initiation in the eighties, the process of economic liberalization in India has been characterized by selectivity and inconsistencies, belying the pro-market rhetoric of state officials and frustrating domestic and international investors. This dissertation interrogates the contradictions between the broad consensus around market reform and the reluctance of the state to implement it. I argue that the scope and limits of the market reform project are determined by the legacies of self-reliance strategy. Using the variations across the fertilizer and pharmaceutical industries as an optic, I suggest that the puzzle of partial liberalization can be explained by the different manifestations of self-reliance across sectors.
The study addresses two related questions. Why, when policies towards both sectors attempted to create national industries that catered to the domestic market, has the pharmaceutical industry been more profitable and more internationalized than the fertilizer industry? How do their divergent development trajectories explain the politics of liberalization in each industry? The analysis reveals that contrasts in the interpretation of self-reliance across sectors shapes the possibilities of successful liberalization in each sector. The disparity in growth and profitability is primarily due to the differences in the way that self-reliance strategy changed the structure of each industry, altered the policy preferences of manufacturers and determined whether their preferences would be reflected in policy.
The policy differences across the two sectors illustrate the varied manifestations of globalization, calling attention to the importance of national factors in shaping international processes. The analysis also offers an explanation for partial liberalization which is different than those suggested by theories of developmental, dependent or rent-seeking states. Such explanations are based on the assumption that certain conditions push a country towards the international market, while a completely different set of variables offers resistance to internationalization and liberalization. In contrast, my analysis suggests that the same set of factors are the vehicles for as well as the brakes on the country's entry into the global system. In India, these factors are found in the legacies of self-reliance strategy.
