The unequal effects of liberalization: evidence from dismantling the License Raj in India

Aghion, Philippe, Burgess, Robin, Redding, Stephen and Zilibotti, Fabrizio (2006) The unequal effects of liberalization: evidence from dismantling the License Raj in India. 728. Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

This paper investigates whether the effects, on registered manufacturing out-put, employment, entry and investment, of dismantling the ‘license raj’ - a system of central controls regulating entry and production activity in this sector - vary across Indian states with different labor market regulations. The effects are found to be unequal depending on the institutional environment in which industries are embedded. In particular, following delicensing, industries located in states with pro-employer labor market institutions grew more quickly than those in pro-worker environments. Our results emphasize how local institutions matter for whether industry in a region benefits or is harmed by the nationwide delicensing reform.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk/
Additional Information:	© 2006 the authors
Library of Congress subject classification:	H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System:	O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O18 - Regional, Urban, and Rural Analyses O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O21 - Planning Models; Planning Policy
Sets:	Collections > Economists Online Research centres and groups > Centre for Economic Performance (CEP) Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) Departments > Economics
Identification Number:	728
Date Deposited:	10 Mar 2008 11:34
URL:	http://eprints.lse.ac.uk/3773/

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