Introduction

It is clear that states in the developing world have been overextended. Not only did they inherit the ill-fitting economic and social structures of colonial rule, but they were also expected to guarantee political democracy and foster economic development. However, the full logic of the market was not accepted by most late developers until recently (D'Costa 1995). Postcolonial governments, in their quest to meet a wide array of social and economic demands for diverse constituencies, intervened in national economic management without necessarily having the institutional foundations to do so. The intensification of global economic interconnectedness since the 1970s has been another source of pressure on developing states (Held, McGrew, Goldblatt and Perraton 1999; Stallings 2003). Transnational corporations extracting a variety of state subsidies, multilateral financial institutions imposing structural adjustment programmes, rapid technological change and the hyper-mobility of finance capital have all eroded the ability of states to regulate and coordinate national economic activities (Castells 2002). In this way, national economies have been incorporated ‘into overarching structures of power’, and by extension, the national autonomy of states has been eroded (Howard and King 1989, 19). This also applies to China and India, today's rising stars, which continue to face internal institutional weakness and external constraints in meeting their national and social obligations (Bagchi and D'Costa 2012; Bardhan 2010).

The onslaught faced by states can be conceptualized in terms of the changing role of the state, or more precisely, a switch from society-centric development aspirations to more economic and business-led goals (see D'Costa 2009).