This paper investigates whether the industrial relations climate in Indian states has affected the pattern of manufacturing growth in the period 1958–1992. We show that states which amended the Industrial Disputes Act in a pro-worker direction experienced lowered output, employment, investment, and productivity in registered or formal manufacturing. In contrast, output in unregistered or informal manufacturing increased. Regulating in a pro-worker direction was also associated with increases in urban poverty. This suggests that attempts to redress the balance of power between capital and labor can end up hurting the poor.

The determinants of government responsiveness to its citizens is a key issue in political economy.Here we develop a model based on the solution of political agency problems.Having a more informed an politically active electorate strengthens incentives for governments to be responsive.This suggests that there is a role both for democratic institutions and the mass media in ensuring that the preferences of citizens are reflected in policy.The ideas behind the model are tested on panel data from India.We show that public food distribution and calamity relief expenditure are greater, controlling for shocks, where governments face greater electoral accountability and where newspaper circulation is highest.

In recent times there has been a renewed interest in relationships between redistribution, growth, and welfare. Land reforms in developing countries are often aimed at improving the poor's access to land, although their effectiveness has often been hindered by political constraints on implementation. In this paper we use panel data on the sixteen main Indian states from 1958 to 1992 to consider whether the large volume of legislated land reforms have had an appreciable impact on growth and poverty. We argue that such land reforms have been associated with poverty reduction.