ABSTRACT
This chapter analyzes some empirical materials from India that shed light on the broader question of how much room for economic policy choice a developing country leader has, especially in a democratic setting. The impressive economic performance of the newly industrializing countries, mainly of East Asia but also of Latin America, has given rise to a challenging new idea: state-induced market-like competitiveness may be the secret for facilitating rapid economic growth. The chapter argues that the immediate and most sustained push for liberalization has come from a group of technocratically inclined leaders who have come to control the levers of India's economic policymaking. Within India's international context, a number of factors loom large that have inclined its leaders toward liberalizing the controlled economy. The economic policy shift under Indira Gandhi is thus best understood as an integral aspect of her overall political strategy.
