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Locked in Place: State-Building and Late Industrialization in India
Why were some countries able to build "developmental states" in the decades after World War II while others were not? Through a richly detailed examination of India's experience, Locked in Place argues that the critical factor was the reaction of domestic capitalists to the state-building project. During the 1950s and 1960s, India launched an extremely ambitious and highly regarded program of state-led development. But it soon became clear that the Indian state lacked the institutional capacity to carry out rapid industrialization. Drawing on newly available archival sources, Vivek Chibber mounts a forceful challenge to conventional arguments by showing that the insufficient state capacity stemmed mainly from Indian industrialists' massive campaign, in the years after Independence, against a strong developmental state.
Chibber contrasts India's experience with the success of a similar program of state-building in South Korea, where political elites managed to harness domestic capitalists to their agenda. He then develops a theory of the structural conditions that can account for the different reactions of Indian and Korean capitalists as rational responses to the distinct development models adopted in each country.
Provocative and marked by clarity of prose, this book is also the first historical study of India's post-colonial industrial strategy. Emphasizing the central role of capital in the state-building process, and restoring class analysis to the core of the political economy of development, Locked in Place is an innovative work of theoretical power that will interest development specialists, political scientists, and historians of the subcontinent.
Chibber contrasts India's experience with the success of a similar program of state-building in South Korea, where political elites managed to harness domestic capitalists to their agenda. He then develops a theory of the structural conditions that can account for the different reactions of Indian and Korean capitalists as rational responses to the distinct development models adopted in each country.
Provocative and marked by clarity of prose, this book is also the first historical study of India's post-colonial industrial strategy. Emphasizing the central role of capital in the state-building process, and restoring class analysis to the core of the political economy of development, Locked in Place is an innovative work of theoretical power that will interest development specialists, political scientists, and historians of the subcontinent.
360 pages, Paperback
First published January 1, 2003
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About the author
Vivek Chibber
36 books143 followersVivek Chibber is Professor of Sociology at New York University and the author of Postcolonial Theory and the Specter of Capital and Locked in Place: State-Building and Late Industrialization in India, which won the Barrington Moore, Jr. Prize. He has contributed to, among others, the Socialist Register, American Journal of Sociology, Boston Review and New Left Review.
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Displaying 1 - 11 of 11 reviews
November 7, 2014
This is a very clear structural analysis of the Indian development state during the Nehru years. Among all the newly independent third world nations, India seemed the most likely candidate to become an industrialised state. But by 90’s India became an example of a failed development state. The usual neoliberal argument regarding this is that the whole idea of state intervention and market regulation itself is the cause of the problem. Vivek Chibber here through clear arguments shows that the problem lay at a deeper structural level in the institutions of the state and their relationship with the capitalist classes who opposed any regulations and disciplinary actions by the state.
With socialism never really on the cards, INC always considered a state led planned economy to be the model for independent India. Indian business class didn’t exactly oppose state intervention, they wanted the state to intervene but only in the form of protecting the local industries, subsidisation and providing the capital. What they were opposed to was the state directing the capital and imposing disciplinary action. The only leverage the state had against the business class was the organised working class, but INC demobilised the labour immediately after independence making the capitalist classes very powerful. With the opposition from the monied classes and the ministries who didn’t want a planning commission over them, this led to the creation of very weak planning apparatus with little power to coerce or punish industries. Chibber presents the weak state apparatus along with the organised opposition from the capitalist class against the state as the reasons for the failure of the Indian development state. He contrasts this with the South Korean case where the development state was very successful. The reason being that South Korea had both a very strong state apparatus with transparency and proper flow of information and because of their export led industrialisation strategy, the capitalist class there had found it rational to accept the state’s regulation and control.
He also goes on to give a clear analysis of why even after the top bureaucrats and economists realised the problem as early as 1957, they couldn’t reform the institutions. Instead of reform what happened eventually was deregulation and liberalisation.
A good work on the political economy of a developmental state.
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June 23, 2021I was disappointed by this book, which promised to explain why industrial policy foundered in India in the post-independence decades—surely a million-dollar question in economic development.
To understand why India’s 1950s-1960s development push failed, Chibber uses South Korea as a counterfactual. Both countries had comparable institutions and income levels at independence, and on the surface, both tried to follow the same model of state-led growth, where the government set ambitious plans, subsidized strategic industries, and coordinated investment between private and public actors. Of course, the economic outcomes couldn’t have been more different. Why did India’s development state fail, while South Korea’s succeeded?
Chibber’s answer boils down to a single missing component: export orientation.
While India pursued a policy of import substitution, South Korea instead pushed for export-led growth. Faced with the tough competition of global markets, Korean firms were willing to acquiesce to state discipline in exchange for support. Meanwhile, in India, local capitalists were happy to dominate the uncompetitive domestic market, benefitting from government largesse without a corresponding impetus to innovate. And so Korean industry raced to the frontier as it fought tooth-and-nail to win foreign markets, while Indian firms stagnated behind protective walls.
None of this should come to any surprise to economists, who have been conditioned—too much, in my view—to suspect all industrial policy as crony capitalism. (Readers of Joe Studwell’s How Asia Works will also recognize this idea as “export discipline”.) But, judging from how Chibber structures his book, it’s far from obvious to economic sociologists, which leads to pages and pages of pretty tedious description of how Indian capitalists clawed away the already-limited powers of the Planning Commission.
But Chibber’s diagnosis raises a natural follow-up question: why did Korea pursue export-led growth, while India opted for import substitution?
Chibber points to the arrival of Japanese firms in the 1960s-70s, who wanted to offload their light manufacturing to a place with lower costs so they could upgrade to making higher-value goods. Crucially, their arrival coincided with Park Chung-hee’s military coup, and the formative early days of the industrial policy regime—which, for a brief shining moment, aligned the incentives of state planners and capitalists. This rare window of opportunity made an export-led growth strategy possible.
This answer may very well be right. But it feels far from satisfying: strangely, a book that was advertised as about Indian policy failure becomes more about a deus ex machina that saved Korea from the dead end of import substitution. Chibber puts an unusual amount on emphasis on the timing; the stars had to align exactly, with the Japanese arriving precisely when the system of industrial policy was being put into place, or Korea’s policy regime would have been “locked in place” like India’s. This strikes me as putting too much analytical weight on what even Chibber admits was a stroke of good luck.
I’m not an expert on Indian development, but I do know a little about Korea, and I have to think there must be more fundamental reasons that can also account for the Korea-India divergence. As candidates, I might point to Korea’s central position in the Cold War, which drew in lavish amounts of American aid, and the role of a more powerful, existential threat (North Korea) in “disciplining” state-led development policy. I would also point to other policies, like land reform, which pushed people to cities and spurred planners to find ways to create factory jobs. Finally, I wouldn’t underrate the importance of scale in shaping India’s choice to import-substitute: ex ante, setting up your industry to sell to 450 million people seems like a much safer bet than trying to hawk your wares on the cutthroat global market.
Perhaps I’ve been too harsh. This book did a lot of things well—most of all, reminding me that I should read more Indian history. I learned a great deal about the Indian National Congress in the heady post-independence days, and the factional politics between left and right. I liked the chapter on how the INC defanged its labor movement, and inadvertently deprived itself an important countervailing force to capital. From what I can tell, Chibber’s book has helped revive historiography around India’s crucial post-independence period. But, in my view, the 20th century South Asia-East Asia economic divergence deserves another critical examination.
To understand why India’s 1950s-1960s development push failed, Chibber uses South Korea as a counterfactual. Both countries had comparable institutions and income levels at independence, and on the surface, both tried to follow the same model of state-led growth, where the government set ambitious plans, subsidized strategic industries, and coordinated investment between private and public actors. Of course, the economic outcomes couldn’t have been more different. Why did India’s development state fail, while South Korea’s succeeded?
Chibber’s answer boils down to a single missing component: export orientation.
While India pursued a policy of import substitution, South Korea instead pushed for export-led growth. Faced with the tough competition of global markets, Korean firms were willing to acquiesce to state discipline in exchange for support. Meanwhile, in India, local capitalists were happy to dominate the uncompetitive domestic market, benefitting from government largesse without a corresponding impetus to innovate. And so Korean industry raced to the frontier as it fought tooth-and-nail to win foreign markets, while Indian firms stagnated behind protective walls.
None of this should come to any surprise to economists, who have been conditioned—too much, in my view—to suspect all industrial policy as crony capitalism. (Readers of Joe Studwell’s How Asia Works will also recognize this idea as “export discipline”.) But, judging from how Chibber structures his book, it’s far from obvious to economic sociologists, which leads to pages and pages of pretty tedious description of how Indian capitalists clawed away the already-limited powers of the Planning Commission.
But Chibber’s diagnosis raises a natural follow-up question: why did Korea pursue export-led growth, while India opted for import substitution?
Chibber points to the arrival of Japanese firms in the 1960s-70s, who wanted to offload their light manufacturing to a place with lower costs so they could upgrade to making higher-value goods. Crucially, their arrival coincided with Park Chung-hee’s military coup, and the formative early days of the industrial policy regime—which, for a brief shining moment, aligned the incentives of state planners and capitalists. This rare window of opportunity made an export-led growth strategy possible.
This answer may very well be right. But it feels far from satisfying: strangely, a book that was advertised as about Indian policy failure becomes more about a deus ex machina that saved Korea from the dead end of import substitution. Chibber puts an unusual amount on emphasis on the timing; the stars had to align exactly, with the Japanese arriving precisely when the system of industrial policy was being put into place, or Korea’s policy regime would have been “locked in place” like India’s. This strikes me as putting too much analytical weight on what even Chibber admits was a stroke of good luck.
I’m not an expert on Indian development, but I do know a little about Korea, and I have to think there must be more fundamental reasons that can also account for the Korea-India divergence. As candidates, I might point to Korea’s central position in the Cold War, which drew in lavish amounts of American aid, and the role of a more powerful, existential threat (North Korea) in “disciplining” state-led development policy. I would also point to other policies, like land reform, which pushed people to cities and spurred planners to find ways to create factory jobs. Finally, I wouldn’t underrate the importance of scale in shaping India’s choice to import-substitute: ex ante, setting up your industry to sell to 450 million people seems like a much safer bet than trying to hawk your wares on the cutthroat global market.
Perhaps I’ve been too harsh. This book did a lot of things well—most of all, reminding me that I should read more Indian history. I learned a great deal about the Indian National Congress in the heady post-independence days, and the factional politics between left and right. I liked the chapter on how the INC defanged its labor movement, and inadvertently deprived itself an important countervailing force to capital. From what I can tell, Chibber’s book has helped revive historiography around India’s crucial post-independence period. But, in my view, the 20th century South Asia-East Asia economic divergence deserves another critical examination.
February 16, 2012
In his book Locked in place, Vivek Chibber focuses on India’s failure as a developmental state to promote an industrial economy despite the presence of apparent administrative and political leadership and commitment as well as a requisite industrial base. He further asks that why is it that even though it was apparent in the late 1950’s and early 60’s that the existing arrangements were not working, there was still no willingness to improve them. Reform instead came to mean “less intervention” by the state rather than “better intervention”, so reform became about reducing the quantity of state intervention rather than improving the quality.
Chibber delves into original and hitherto unused, archival materials and government documents to construct a narrative in opposition to the prevalent narrative which cites a lack of commitment on the part of the leaders and bureaucrats or the state as the reason behind this failure. He insists instead, that Indian businessmen and industrialists opposed the coordination of investment proposed by the state as well as the ‘disciplinary planning’ that the state felt was necessary. Under ‘disciplinary planning’, a combination of licenses and subsidies for those in line with the plan and withdrawal of these for those that were not would have given the state the ability to discipline firms. Even though the state was following the ISI strategy common to most developing countries in the 1940’s and 50’s, the state was not able to discipline the firms. So the firms enjoyed protection and profits from an uncompetitive domestic market, but this further meant that they did not need to innovate. The market was so largely protected that the firms did not need state support but went to considerable, and in most cases unethical lengths to get it. The Planning Commission was established with the intention of implementing “disciplinary planning”, however in wake of capitalist opposition, it eventually lacked the capacity to discipline either the firms or the other governmental bodies and ministries. Other state-industry consultative commissions were also established but they remained ineffective as well.
In Chibber’s opinion therefore, the key to why India failed in creating a successful industrial economy lays not so much in the state but more in the relations between the state and the “capital”. These relations of hostility, and of opposition are the analytical argument in this book. Chibber compares these conditions in India with the installation of the post-war developmental state in Korea. He argues that the success of the Korean model is in large part due to the alliance between the state and the Korean capitalist class and not due to the state domination of the capitalist class. The Korean state, seeing that its industrialization plans (driven partly by military imperatives) would require huge quantities of imports, needed Korean firms to export; and Korean firms wanted state support to make their entry into daunting export markets, including support conditional on them meeting rigorous quality standards in export markets. The Korean firms were therefore, much more cooperative than their Indian counterparts with arrangements in which they took on the role of implementers of government targets. They had an important role in setting of these targets, which gave them a means of disciplining government (to deliver on services) as much as the other way around. The driver of the difference between India and Korea in institutional arrangements of planning was thus the difference in development strategy — ISI in India and ‘‘export-led industrialization’’ (ELI) in Korea. These two development strategies placed different incentives on the parties to state-capital interactions. ELI required intense state intervention, including to ‘‘distort’’ prices on a massive scale so as to accelerate investment along the lines determined not by the state on its own but by the consortium of state planners and organizations of firms. Therefore in Chibber’s argument this is the main reason why Korea was able to set up a developmental state and India was not—this highlights state-capital relations in two different economies. Korean firms also had help from Japanese trading and manufacturing companies that were looking for cheaper labor options in the 1960’s. Korea also received help from the US, which helped it in development planning and exports. India lacked almost all outside help however.
Chibber largely underplays the differences between the two countries however. India’s vast heterogeneity and differences in social background of the public officials and businessmen, is sharply different from Korea. Also India composed of many more states and is a federal setup, which would have imposed significant handicaps in terms of coordination.
Overall, the book is an interesting read.
Chibber delves into original and hitherto unused, archival materials and government documents to construct a narrative in opposition to the prevalent narrative which cites a lack of commitment on the part of the leaders and bureaucrats or the state as the reason behind this failure. He insists instead, that Indian businessmen and industrialists opposed the coordination of investment proposed by the state as well as the ‘disciplinary planning’ that the state felt was necessary. Under ‘disciplinary planning’, a combination of licenses and subsidies for those in line with the plan and withdrawal of these for those that were not would have given the state the ability to discipline firms. Even though the state was following the ISI strategy common to most developing countries in the 1940’s and 50’s, the state was not able to discipline the firms. So the firms enjoyed protection and profits from an uncompetitive domestic market, but this further meant that they did not need to innovate. The market was so largely protected that the firms did not need state support but went to considerable, and in most cases unethical lengths to get it. The Planning Commission was established with the intention of implementing “disciplinary planning”, however in wake of capitalist opposition, it eventually lacked the capacity to discipline either the firms or the other governmental bodies and ministries. Other state-industry consultative commissions were also established but they remained ineffective as well.
In Chibber’s opinion therefore, the key to why India failed in creating a successful industrial economy lays not so much in the state but more in the relations between the state and the “capital”. These relations of hostility, and of opposition are the analytical argument in this book. Chibber compares these conditions in India with the installation of the post-war developmental state in Korea. He argues that the success of the Korean model is in large part due to the alliance between the state and the Korean capitalist class and not due to the state domination of the capitalist class. The Korean state, seeing that its industrialization plans (driven partly by military imperatives) would require huge quantities of imports, needed Korean firms to export; and Korean firms wanted state support to make their entry into daunting export markets, including support conditional on them meeting rigorous quality standards in export markets. The Korean firms were therefore, much more cooperative than their Indian counterparts with arrangements in which they took on the role of implementers of government targets. They had an important role in setting of these targets, which gave them a means of disciplining government (to deliver on services) as much as the other way around. The driver of the difference between India and Korea in institutional arrangements of planning was thus the difference in development strategy — ISI in India and ‘‘export-led industrialization’’ (ELI) in Korea. These two development strategies placed different incentives on the parties to state-capital interactions. ELI required intense state intervention, including to ‘‘distort’’ prices on a massive scale so as to accelerate investment along the lines determined not by the state on its own but by the consortium of state planners and organizations of firms. Therefore in Chibber’s argument this is the main reason why Korea was able to set up a developmental state and India was not—this highlights state-capital relations in two different economies. Korean firms also had help from Japanese trading and manufacturing companies that were looking for cheaper labor options in the 1960’s. Korea also received help from the US, which helped it in development planning and exports. India lacked almost all outside help however.
Chibber largely underplays the differences between the two countries however. India’s vast heterogeneity and differences in social background of the public officials and businessmen, is sharply different from Korea. Also India composed of many more states and is a federal setup, which would have imposed significant handicaps in terms of coordination.
Overall, the book is an interesting read.
This entire review has been hidden because of spoilers.
January 31, 2026
Excellent book on India's attempt at planning and import-substitution industrialization. It argues that Congress' demobilization of workers, an assertive capitalist class, and a lack of state institutions shaped the drive towards a planning that could not actually discipline firms, and as such fail to actually be a motor of industrialization.
The turn towards ISI worsened this, as firms were dis-incentivised from export orientation - contrasting with Korea, where Japanese aid in allowing Korean firms to enter foreign markets and the ability of government to impose a much more centralised planning apparatus ensured Korea to industrialise successfully, while India's planning apparatus failed and was increasingly undermined as it delegitimized itself and empowered its enemies.
While I believe the cause at hand is much more to do with "human capital", the underlying argument of the need to discipline actors to ensure a successful developmental policy is convincing and the overarching argument still well-presented.
The turn towards ISI worsened this, as firms were dis-incentivised from export orientation - contrasting with Korea, where Japanese aid in allowing Korean firms to enter foreign markets and the ability of government to impose a much more centralised planning apparatus ensured Korea to industrialise successfully, while India's planning apparatus failed and was increasingly undermined as it delegitimized itself and empowered its enemies.
While I believe the cause at hand is much more to do with "human capital", the underlying argument of the need to discipline actors to ensure a successful developmental policy is convincing and the overarching argument still well-presented.
July 8, 2024
I am now an expert on industrial policy lol.
Very nicely lays out how policy, state organization, capitalist forces, and labor relations affect the success of industrial policy by an in depth study of India and South Korea.
Always a bad idea to trust the capitalists to play nice. Plus, brings home the necessity to bring bureaucrats to heel under a central coordinating authority.
Very nicely lays out how policy, state organization, capitalist forces, and labor relations affect the success of industrial policy by an in depth study of India and South Korea.
Always a bad idea to trust the capitalists to play nice. Plus, brings home the necessity to bring bureaucrats to heel under a central coordinating authority.
January 30, 2020
Very fascinating thesis in this book. Doing a case study between the developmental states of Korea and India, Chibber made a very convincing case for the role of the bourgeoisie in either facilitating state-led rapid industrialization, in the case of Korea, or stymying it, in the case of India. There is something of a paucity in details in the Korean case compared to the Indian case, but it does otherwise make a very compelling case for the difference in industrialization success between export-oriented industrialization countries like Korea and Taiwan, and import substitution industrialization countries like the rest of the developing world.
June 4, 2021
Chibber convincingly revises the popular notion that the crux of India's troubles as a developmental state lay solely in the inadequacies of it's state functionaries. Central to this revision is his closer inspection of the Bombay Plan, which is generally cited as evidence for Indian capital's willingness to submit to state planning. Chibber shows that the image produced by the document was not representative of the consensus of India's Capitalist class, who aimed to extract benefit from the socialization of the cost of industrialization through state planning, without any of the disciplinary components.
With this notion dispelled, Chibber demonstrates that the tensions between labor, capital and the political elite drove the developments of post-war India. The mechanisms are reinforced by historical comparisons with the Korean developmental state and to a lesser degree those of Taiwan, France and Japan.
With this notion dispelled, Chibber demonstrates that the tensions between labor, capital and the political elite drove the developments of post-war India. The mechanisms are reinforced by historical comparisons with the Korean developmental state and to a lesser degree those of Taiwan, France and Japan.
This entire review has been hidden because of spoilers.
July 26, 2021
A good work of historical materialism though it's thesis might require more of a specialist background to verify - it's not too dry, but it is certainly didactic. The act of comparing two development strategies between two different countries is also fairly challenging and requires cross disciplinary skill.
Overall a useful book to engage with, though the underlying polemical nature should be kept in mind.
Overall a useful book to engage with, though the underlying polemical nature should be kept in mind.
Read
June 27, 2021Rigorous and thought-provoking. Unconventional history of economies.
August 30, 2023
Quite repetitive, but it gets the point across: capitalist interests, more than anything else, are tantamount in the development of industrial capitalist societies
February 13, 2015
Amazing book; it puts capital back in to the institutional approaches that narrow down the dimensions of state-society relations and neglects relations of power between social actors and institutions. Worth a read!
Displaying 1 - 11 of 11 reviews