Governing Firms: Production after the State

In the age of postwar industrial development based on import-substitution, until the 1980s, the state was the primary source of governance for manufacturing. State agencies would arrange long-term financing, manage capital-labour relations and mediate relationships between domestic actors and the international economy. Since the advent of neoliberal reform, however, the state has had neither the capacities nor the inclinations to expend resources and political capital in support of industrial investment. This paper discusses the sources of governance for private-sector industrial firms in a post-liberalization context, adjudicating between regional agglomerations, sectoral value chains, co-ethnic networks, multi-industry groups and perhaps even firms themselves. I use firm level data in India and Pakistan and secondary evidence in other world regions to assess the patterns of post-liberalization governance across the developing world and the economic and political implications of such patterns.