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Abstract

The study of the development in India is significant for several reasons. First, India has emerged as a fast-growing state during last three decades despite all pessimisms. Second, the rate of economic growth and poverty reduction were not similar in India’s subnational States. Although the Center has introduced and implemented several economic reforms since 1991 to enhance economic development, the results of implantation vary in different subnational States. The main question of this study is why Andhra Pradesh and Bihar -with relatively similar initial institutional and economic conditions after independence, and with experience of strong subnational movement which finished the hegemony of the Congress party in both States- did show a significant divergence in political and development trajectory after the 1990s? Since the main research focus of this thesis is the Indian States, this study uses the subnational comparative method and provides an in-depth comparison as opposed to cross national comparisons. Moreover, this study concentrates on the strategic choices of the regional leaders and its interactions with the institutional setup. Therefore, the analytic narrative approach is used as the proper research methodology. The thesis delineates how in the post one dominant party system and post liberalization era, in the framework of India’s federal institutions, the regional leaders as the rational actors confirm or rebel against the policies and decisions of the Center (mainly economic reforms). Based on the neo-institutional model of governance and polycentric hierarchy model the current thesis investigates how the federal design of India’s political system provides room to maneuver for the elite agency at the State level. The study proposes a multi-level polycentric model to analyze the strategic choices of regional leaders, especially their economic policy choices after the liberalization. This model enables us to analyze the strategic choices of regional leaders to cooperate or confront the Center via analysis of horizontal and vertical interactions in a multi-level system.