Political Economy of Development
Currently offered to: Graduate students at the Indian Institute of Technology (IIT) Delhi (Course code: HSL 7112 and HSL718), July-December 2026.
This course provides a political economy perspective on economic growth and development, drawing both from Indian and international experiences. Structural factors — such as caste- and gender-based inequalities and predominance of the informal sector – greatly influence the macroeconomic outcomes of developing countries like India. Economic relations between countries have been shaped not by economic factors alone but by a complex interplay of historical (and colonial) legacies and strategic power play. Therefore, to understand economic interactions at the national and international levels, one must go beyond the straitjacket of mainstream neoclassical theory and closely examine the social and political structures in which these interactions occur. In this course, we will attempt to grasp a select number of issues comprehensively. The topics covered include capital accumulation, inequality, agrarian transition, industrialization, fiscal policies, money, poverty, labour markets, migration, and gender. The course will also cover issues related to international trade, international finance, and technological changes.
Major Topics for Discussion
1. Development as freedoms
The idea of development as the expansion of substantive freedoms (such as being able to lead long and healthy lives) as opposed to development as the growth of incomes or wealth. Readings by Amartya Sen and others.
2. Income, wealth, and inequalities
And how these inequalities are linked to social structures – examining evidence from India and other parts of the world. The work by Thomas Piketty and others.
3. State, markets, and long-term development
Will economic growth and development proceed automatically if markets are allowed to operate freely? Or will economic development require the guidance of the state or the government?
4. India before 1980: from a colony to a planned economy
How India’s economy and society transformed under colonialism from the mid-18th to the mid-20th century? And India’s attempts to bring modernization through economic planning.
5. Agriculture, agrarian institutions, and development:
Agricultural growth in India over the decades, with experiences from other developing countries. How do agrarian and social structures affect the economy and the labour market in rural areas?
6. Population and labour market
Does population growth help or hurt economic growth? Will India be able to take advantage of the demographic window of opportunity?
7. Migration and the informal economy
Migration for work and for livelihoods. How do social disadvantages translate into disadvantages in the labour market, especially in India’s informal economy?
8. Gender, social groups, and classes
On gender-based inequalities within the household, in the labour market, and in the economy and society at large. How do caste-based inequalities affect achievements in education and the labour market?
9. Social development and its link to fiscal policies:
Should governments spend on their people (on health and education)? What if such spending leads to fiscal deficits?
10. Industrial growth, Trade, and Industrial policy
What will be the impact of the U.S. tariffs under President Trump on India, China, the U.S. itself, and the rest of the world? What is the role of industrial policy in developing countries?
11. Education: for innovation and social mobility
12.Artificial Intelligence, Financialization, and our Futures
The rise of artificial intelligence and other technologies will have important implications for the future of work and employment growth. At the same time, the growing levels of corporate financialization will impact the nature of future economic growth and distribution
13. The dollar’s dominance, energy markets, and international political economy
14. Globalization and development: Can developing countries prosper with globalization?
Attendance Policy
Your participation in classes is critical for the success of this course. Therefore, we urge you to participate actively in all classes by asking questions and taking part in discussions.
One of the joys of studying at a university is the sense of community that it provides. You are learning with your batch mates while attending lectures, doing projects, and taking exams. You may be a person who prefers to be on your own, one who likes to read in a corner of the library (I think I still am); you may be able to grasp things quickly by searching on the Internet; you may be shy to talk in a large group, or you feel you are not comfortable speaking in English (that does not matter at all!). None of these should discourage you from attending classes. Your ideas will get sharpened by being part of a larger collective, even when you are not speaking or not necessarily making your presence felt in the class. Over the years, I have noticed several silent yet attentive backbenchers, almost as many as the number of enthusiastic frontbenchers, among the best writers of answers in the courses I have taught here.
Broad Reading List (Indicative only: refer the detailed reading list sent to you separately)
Agarwal, Bina (1994), A Field Of One’s Own: Gender And Land Rights In South Asia, Cambridge University Press, Cambridge England New York, NY, USA.
Amsden, Alice (1989), Asia’s Next Giant: South Korea and Late Industrialization, Oxford University Press, New York.
Angus Deaton and Jean Drèze (2009) ‘Food and Nutrition in India: Facts and interpretations’, Economic and Political Weekly, February 14.
Bagchi, Amiya Kumar (1972) Private Investment in India 1900 -1939.
Bardhan, Pranab, (1984), The Political Economy of Development in India, Oxford University Press, New Delhi.
Barry Eichengreen (2011), Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System. Oxford University Press.
Breman, Jan (2019), Capitalism, Inequality, and Labour in India, California University Press, Cambridge and New York.
Breman, Jan (1974), Patronage and Exploitation: Changing Agrarian Relations in South Gujarat, University of California Press, Berkeley, Los Angeles, London.
Bauer, P. T. (1976), Dissent on Development: Studies and Debates in Development Economics, Harvard University Press.
Bhagwati, Jagdish (1993), India in Transition: Freeing the Economy, Oxford University Press, New Delhi. Ch.3, pp. 71-99.
Bhaduri, Amit (1973), ‘A Study in Agricultural Backwardness Under Sem-Feudalism’, Economic Journal, Vol. 83, No.329.
Bhaduri, Amit (1986), Macroeconomics: The Dynamics of Commodity Production, ME Sharpe.
Bhagwati, Jagdish and Chakravarty, Sukhmoy (1969), Contributions to Indian Economic Analysis: A Survey, American Economic Review.
Chakravarty, Sukhamoy (1987), Development Planning: The Indian Experience, Oxford University Press, New Delhi.
Chandrasekhar, C.P and Ghosh, Jayati (2004), The Market that Failed: Neoliberal Economic Reforms in India, LeftWord Books, New Delhi.
Chang, Ha-Joon (2003), Kicking Away the Ladder: Development Strategy in a Historical Perspective, Anthem Press, London.
Charles, P. Kindleberger (1985) and Robert Z Aliber (2005). Manias, Panics, and Crises: A History of Financial Crises. 5th Edition. John Wiley and Sons, Hoboken, NJ.
Cherif, Reda and Hasanov, Fuad (2019), ‘The Return of the Policy That Shall Not Be Named: Principles of Industrial Policy’, Working Paper, WP/19/74, International Monetary Fund, March 2019.
Crotty, James (2019), Keynes against Capitalism: His Economic Case for Liberal Socialism, Routledge, London and New York.
Das, Arindam , Niladri Sekhar Dhar, Kunal Munjal, Madhura Swaminathan (2024) ‘Patterns of Income Growth in an Eastern Uttar Pradesh Village, 2006–23’, Economic and Political Weekly, Vol.59, Issue 43
Deshpande, Ashwini and Katherine S. Newman (2007), ‘Where the Path Leads: The Role of Caste in Post-University Employment Expectations’, Economic and Political Weekly, Vol. 42, No. 41, pp. 4133-4140.
Drèze, Jean and Amartya Sen (2013), An Uncertain Glory: India and its Contradictions, Allen Lane.
Drèze, Jean and Sen, Amartya (1989), Hunger and Public Action, Oxford University Press, New Delhi.
Drèze, Jean, Prankur Gupta, Reetika Khera, Isabel Pimenta (2019) ‘Casting the Net: India’s Public Distribution System after the Food Security Act’, Economic and Political Weekly, February 2019.
Frankel, Francine (2004), India’s Political Economy: 1947 – 2004, Oxford University Press, New Delhi.
Gerschenkron, Alexander (1962), Economic Backwardness in Historical Perspective, Cambridge, Massachusetts: Belknap Press of Harvard University Press.
Goldin, Claudia (2021) Career and Family: Women’s Century-long Journey Toward Equity, Princeton University Press.
Habib, Irfan (1975), ‘Colonization of the Indian Economy, 1757-1900’, Social Scientist, Vol.3, No.8, pp. 23-53.
Himanshu, Peter Lanjouw and Nicholas Stern (2018), How Lives Change: Palanpur, India, and Development Economics, Oxford University Press.
Jha, Praveen (2004) ‘Continuity and Change: Some Observations on the Landscape of Agricultural Labourers in North Bihar, India’, Journal of Agrarian Change, Vo. 4, No. 4, pp. 509-531.
Johnson, Chalmers (1982), MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975, Stanford University Press, California. Chapter 1, pp. 3-34.
Kevin M. Murphy, Andrei Shleifer, and Robert W. Vishny (1989) ‘Industrialization and the Big Push”, Journal of Political Economy, Vol. 97, No. 5
Kohli, Atul (2007), State-Directed Development: Political Power and Industrialization in the Global Periphery, Cambridge University Press, Cambridge, UK.
Munshi, Kaivan (2019), ‘Caste and the Indian Economy’, Journal of Economic Literature, 57 (4), 781-834.
Krueger, A. (1974), ‘The Political Economy of the Rent Seeking Society’, American Economic Review, Vol. 63, No. 3, pp. 291-303.
Kumar, Dharma (ed.) (1983), The Cambridge Economic History of India – Volume II: c. 1757-2003, Cambridge University Press, Cambridge.
Marglin, Stephen A (2021), Raising Keynes: A Twenty-First-Century General Theory, Harvard University Press.
Mazzucato, Mariana (2011), The Entrepreneurial State, Demos, London.
Mody, Ashoka (2023), India is Broken: A People Betrayed, Independence to Today, Stanford University Press, Stanford, California.
Mundle, Sudipto (1985) ‘The Agrarian Barrier to Industrial Growth’, Journal of Development Studies 22:1, pp. 49-80.
Naughton, Barry (ed.) (1997), The China Circle: Economics and Electronics in the PRC, Taiwan and Hong Kong, Brookings Institution Press, Washington D.C.
Nayyar Deepak ed (1994), Industrial Growth and Stagnation- The Debate in India, Oxford University Press, Delhi.
Panagariya, Arvind (2008), India: The Emerging Giant, Oxford University Press, New York. Ch.12 (‘International Trade: Carrying Liberalization Forward’), especially pp. 259-68 and 276-81.
Parthasarathi, P. (2011), Why Europe Grew Rich and Asia Did Not: Global Economic Divergence, 1600-1850. Cambridge: Cambridge University Press.
Piketty, Thomas (2014) Capital in the Twenty-First Century, Harvard University Press, Cambridge, London.
Piketty, Thomas (2020), Capital and Ideology, The Belknap Press of Harvard University Press, Cambridge, Massachusetts.
Prabhat Patnaik (2009), The Value of Money, Columbia University Press.
Ramachandran, V.K and Swaminathan, Madhura (2002), Agrarian Studies: Essays on Agrarian Relations in Less-Developed Countries, Tulika Books, New Delhi.
Rao, J Mohan (1986), ‘Agriculture in Recent Development Theory’, Journal of Development Economics.
Riskin, Carl (1987), China’s Political Economy: The Quest for Development since 1949, Oxford University Press, New York.
Sanyal, Kalyan (2007), Rethinking Capitalist Development: Primitive Accumulation, Governmentality and Post-Colonial Capitalism, Routledge, New Delhi and Oxon.
Sen, Amartya (1987) Commodities and Capabilities, Oxford University Press, New Delhi.
Sen, Amartya (1992) Inequality Reexamined, Clarendon Press, Oxford.
Sen, Amartya (1999) Development as Freedom, Oxford University Press, New Delhi.
Stiglitz, Joseph (2002), Globalization and its Discontents, W.W. Norton and Company.
Thomas Piketty (2014), Capital in the Twenty-First Century, The Belknap Press of Harvard University Press, Cambridge, Massachusetts.
Thomas Piketty (2020), Capital and Ideology, The Belknap Press of Harvard University Press, Cambridge, Massachusetts.
Thomas, Jayan Jose (2019) ‘How to Revive Indian Manufacturing? On the Need for Industrial Policy, State of Working India 2019, <https://cse.azimpremjiuniversity.edu.in/wp-content/uploads/2019/04/SWI2019_Industrial_Policy_Thomas.pdf
Thomas, Jayan Jose (2020), ‘Labour Market Changes in India, 2005-2018: Missing the Demographic Window of Opportunity’, Economic and Political Weekly, August 22.
Thorat, Sukhadeo and Katherine S. Newman (2007), ‘Caste and Economic Discrimination: Causes, Consequences and Remedies’, Economic and Political Weekly, Vol. 42, No. 41, pp. 4121-4124.25 March 2021:
Labour Economy Development 