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Black, Anthony, Roy, Pallavi, El-Haddad, Amirah and Yilmaz, Kamil (2020) The political economy of automotive industry development policy in middle income countries: A comparative analysis of Egypt, India, South Africa and Turkey. Manchester: Effective States and Inclusive Development Research Centre (ESID).

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This paper examines the political economy of development policy through the prism of four country case studies (Egypt, India, South Africa and Turkey) of the automotive industry. The objective is not simply to examine the developmental impact of automotive policy, but to illustrate how the policy regime has been the outcome of a contested process. Early growth in the auto sector in the four case countries was enabled by rents from protected markets. The emergence of competitive firms is critically dependent on the nature of state–business relationships and the net outcome of the rent-seeking process in the sector. This hinges on the bargaining power of business, foreign or domestic, vis à vis the government. If firms capture subsidies in return for support to weak and vulnerable ruling coalitions, the auto sector in that country can become the classic case of an infant industry remaining stunted. Where the distribution of power is such that ruling coalitions are able to discipline firms in the auto sector, so that they become globally competitive, developmental outcomes have been positive.

Item Type: Monographs and Working Papers (Working Paper)
Keywords: Automobile industry, protection, rents, developing countries, exports, state-business relationship, political economy.
SOAS Departments & Centres: Departments and Subunits > Department of Politics & International Studies
Departments and Subunits > Interdisciplinary Studies > Centre for International Studies & Diplomacy
ISBN: 9781912593538
Date Deposited: 26 May 2020 14:48
Funders: Other

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