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

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

No 5492, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper investigates whether the effects, on registered manufacturing output, employment, entry and investment, of dismantling the 'license raj' - a system of central controls regulating entry and production activity in this sector - vary across Indian states with different labour market regulations. The effects are found to be unequal depending on the institutional environment in which industries are embedded. In particular, following delicensing, industries located in states with pro-employer labour market institutions grew more quickly than those in pro-worker environments. Our results emphasize how local institutions matter for 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-cwa and nep-dev
Date: 2006-02
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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 fromDismantling the License Raj in India (2005)
Journal Article: The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India (2008)
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