Wednesday, 15 March 2017

The structure of state borrowing: towards a political theory of control mechanisms

an article by Anush Kapadia (Indian Institute of Technology, Bombay, India) published in Cambridge Journal of Regions, Economy and Society Volume 10 Issue 1 (March 2017)


Alice Amsden’s seminal work on the developmental state was premised on a general theory of control mechanisms. Her focus on development banking prioritises financial control.

However, the development literature concentrates on one element of financial control: investments rather than borrowing. Further, a state bank makes borrowing bargains that are fundamentally political.

Building on recent work on “political settlements” and development, we propose a political theory of control mechanisms that builds politics into Amsden’s theory of control. We then apply it to development bank fundraising, arguing that when development banking works, it does so by reconciling political settlements with control over fundraising.

JEL Classification: N2, H6, P16, O23

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