The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India

Philippe Aghion, Robin Burgess (), Stephen James Redding and Fabrizio Zilibotti ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper investigates whether the effects, on registered manufacturing out- put,employment, entry and investment, of dismantling the .license raja system of central controlsregulating entry and production activity in this sector .vary across Indian states with differentlabor market regulations. The effects are found to be unequal depending on the institutionalenvironment in which industries are embedded. In particular, following de-licensing,industries located in states with pro-employer labor market institutions grew more quicklythan those in pro-worker environments. Our results emphasize how local institutions matterfor whether industry in a region benefits or is harmed by the nationwide delicensing reform.

Keywords: delicensing; economic development; labour regulation (search for similar items in EconPapers)
JEL-codes: O14 O18 O21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-cwa, nep-dev, nep-lab and nep-reg
Date: 2006-06
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Related works:
Working Paper: The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India (2007)
Working Paper: The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India (2006)
Working Paper: The Unequal Effects of Liberalization: Evidence fromDismantling the License Raj in India (2005)
Working Paper: The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India (2006)
Journal Article: The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:cep:cepdps:dp0728

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