SOAS Research Online

Abstract

The emerging literature on institutional functionalism opens opportunities for historically- and socially-sensitive analysis of institutions, especially if it is complemented by a material understanding of institutions and their location within the wider social structure. This paper engages constructively with the ‘credibility’ thesis in institutional economics by developing an alternative materialist conception of labour market institutions (LMIs) and applies it to the debates on the Indian industry. Empirical observations collected from field research in various industrial sites in India show that changes to institutional forms have almost always involved labour unrest and conflict, but not always in accordance to the alleged form-function relations. The credibility thesis opens a way for debates on LMIs to move away from the central focus on their forms by evaluating the extent to which institutions are contested within specific socio-historical contexts. Also, the alternative conception suggests that labour, capital and the state may have perspectives on functions of LMIs that may not always coincide, which relate to different types of development. This is of particular interest in the context of India where the on-going policy debates on labour market reforms have primarily focused on ‘form’ variables. The implication is that the ongoing debates in India focusing on policies that attempt to engineer changes to forms of LMIs may be misguided and ineffective.