ABSTRACT
Is the central state able to craft new institutions and reshape existing ones in order to suit its goal of establishing a managed market for cotton? The previous chapter suggested that an answer in no small part depends on the local social and political contexts in which these institutional changes evolve. The central state’s capacity at institution-building was circumscribed by local resistance and societal institutions which sometimes diluted or distorted formal, state-set institutions. If this was the case for institutions such as the licensing system which aimed at directly regulating market access, what about more indirect means which the central state devised to macro-manage the economy? We take up this question by looking at the central state’s efforts to influence corporate finances and business practices to contribute to economic transformation in the cotton industry.
