This chapter shows how the paternalist policy style impacts social policy implementation at the provincial level and below. The top-down approach in paternalist provinces produces relatively standardized social policy but reduces opportunities for officials to innovate and tailor policies to local conditions. Fiscal transfers from the center often foster corruption and dependency in these provinces. Thus, many paternalist provinces have experienced rising inequality despite targeted policies and transfers. While focusing on health policy in paternalist provinces, this chapter also discusses the impact of paternalism on education, poverty alleviation, and housing.

Born 1910, the son of a prosperous New York lawyer, Charles P. Kindleberger grew up in the Roaring Twenties, eventually finding his way to economics at Columbia University starting in 1933. Curiosity about the world, not so much desire to make it better, was his driving motivation.

Mixed provinces exhibit elements of pragmatism in addition to elements of paternalism. They tend to be more politically open than paternalist provinces but more restrictive than their pragmatist counterparts. This combination produces a policy style in which provincial leaders take a top-down approach to policymaking and standardize new policies across the province yet tend to be relatively frugal in their social policy allocations both in relative and per capita spending. In some cases, mixed provinces are caught in the middle: they do not generate as much revenue as coastal provinces, but they are not poor enough to be eligible for certain fiscal transfers from the central government. As a result, the budget for social policy in these provinces is often among the smallest in the country. This chapter focuses on health policy in mixed provinces, while also discussing the impact of a mixed policy style on education, poverty alleviation, and housing.

Bretton Woods had envisaged a world without capital flows, neither short-term nor long-term, but market practitioners had other ideas, rebuilding markets first domestically and then internationally in a process Kindleberger understood as a kind of natural Darwinian evolution. Policymakers viewed these developments with increasing alarm, and economists such as Robert Triffin built careers stoking those fears. The result was economic policy first attempting to hold back natural evolution, and then ultimately abdicating responsibility in Nixon’s 1971 devaluation of the dollar, a decision Kindleberger would call the Crime of 1971.

The last two decades of the twentieth century brought a remarkable consensus among the nations of the world in the way they conducted commerce. Erstwhile communist nations such as Russia and China as well as protectionist democracies such as India and Brazil, compelled by differing circumstances, have all embraced economic reforms and opened their borders for trade and foreign direct investment. The last word is not out on the overall effect of such liberalisation policies, with some countries like China dramatically benefitting from world trade and managing to lift millions of people out of poverty, while others (for example, in Latin America and Eastern Europe) severely affected with domestic players almost wiped out by foreign competition, and yet others like India positioned somewhere in between with some sectors benefitting from reforms and others losing out. But there was one critical factor that was common to all the firms located in these reforming nations—their business landscape has been dramatically transformed with the rules of the game in business radically redefined. How do firms from developing economies, saddled with resource deficiencies and underdeveloped institutions, cope with sweeping institutional changes triggered outside their country borders? This is the question that motivated the two of us to embark on a research programme for over fifteen years using the empirical context of Indian industries and firms with which we have been closely associated both as researchers and practitioners. This book is our best attempt to answer this question by taking a multi-level institutional perspective and drawing from the combined evidence of India's textile and pharmaceutical industries that have had varied results in successfully coping with global institutional changes initiated under the auspices of the World Trade Organization.

This book is dedicated to Dr Sougata Ray and Dr MB Sarkar, two phenomenal individuals who, during a chance meeting at one of the Academy of Management meetings around fifteen years ago, envisioned the necessity of collaborative research efforts between scholars located in India and abroad to study the growing participation of Indian organisations in global markets. Both of them pursued the realisation of this vision with tremendous energy, starting with a seminar at the Indian Institute of Management, Calcutta, during which we, the authors of this book, met for the first time.

First January 2005 is an important date in the history of the governance of international trade. It is on this day that two global institutional changes took effect that, taken together, altered the trajectory of trade flows in textiles and pharmaceuticals, two industries that play salient roles in different ways in the economies of a large number of developing and developed countries. Negotiated as a part of the General Agreement on Tariffs and Trade’s, or GATT’s, Uruguay Round of talks during the 1986–1994 period, member countries agreed to adopt the Textiles and Clothing (ATC) and Trade Related Intellectual Property Rights (TRIPS) agreements on 1 January 1995, which were to be phased in over the next ten years. The Agreement on Textiles and Clothing abolished the Multi- Fibre Agreement (MFA), which had governed global trade in textiles since 1974. The MFA endorsed bilaterally negotiated agreements on import quotas by developed countries on the exports of textile products from developing countries. Under the new arrangement after 2005, global trade in textiles and clothing would no longer be subject to protectionist quotas but would be governed by the general rules and disciplines embodied in the multilateral trading system.

We have postulated, through the first two chapters,that the populist logic that informed the DMK is thehegemonic assertion of non-Brahmin–Dravidian (thepleb) as Tamil (the populous) through dismantlingthe Aryan–Brahmin hegemony established in TamilNadu. If the name of the people, Tamil, the emptysignifier, is not to eclipse the internal frontiernecessary for the counter-hegemonic assertion, thecatachrestic naming of the non-Brahmin Dravidian asTamil is to be complemented by the synecdochic claimof Tamil Nadu to aspire for a Dravidian republicthat spread all over peninsular India. What we needto consider is that while this can be the populistlogic, whether such counter-hegemonic assertion canbe made without recourse to certain appeal to ahistorical sense of change, which came to be knownas “modernity” or “modernization.” The populistlogic will not work effectively if it does notinvolve what Charles Taylor has called the forgingof a new social imaginary which is involved in themaking of a modern identity through locating a rangeof sources of the self in tradition. Our postulatein that regard in this chapter is that the DMKmanaged to make connections, imaginatively andcreatively, to sources in Shaivite metaphysicwithout having to yield to the Tamil nationalistprodding of neo-Shaivites of the nineteenth andearly twentieth centuries, as argued by some.

We need to recognize that in the Tamil instance, thecreation of modern social imaginary with appeals totraditional sources of the self was fraught withinnumerable conundrums because the core of theimaginary consisted of removing caste from thepublic sphere by either sequestering it to theprivate lives or annihilating it fully to fashion acaste neutral self. This entailed a need torepudiate, challenge, or at least criticallyinterrogate traditional Brahminical mores enmeshedwith practices of rituals and piety. This placed ahuge demand on political actors of all kinds to makea statement on where they stood in terms faith,belief, customs on the one hand, and humanist credoand scientific rationality on the other.