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

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

STICERD - Development Economics Papers from Suntory and Toyota International Centres for Economics and Related Disciplines, LSE

Abstract: This paper investigates whether the effects, on registered manufacturing out-put,employment, entry and investment, of dismantling the 'license raj' - a system of centralcontrols regulating entry and production activity in this sector - vary across Indian stateswith different labor market regulations. The effects are found to be unequal depending onthe institutional environment in which industries are embedded. In particular, followingdelicensing, industries located in states with pro-employer labor market institutions grewmore quickly than those in pro-worker environments. Our results emphasize how localinstitutions matter for whether industry in a region benefits or is harmed by thenationwide delicensing reform.

Date: 2005-12
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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 from Dismantling the License Raj in India (2006)
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:stidep:45

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