"FDI, Poverty, and the Politics of Potable Water Access." Economics & Politics 30.3 (2018): 366-393.
By - Rudra, Nita, Meir Alkon, and Siddharth Joshi.
How does foreign direct investment (FDI) affect the wellbeing of the poor? We address this question by analyzing the impacts of FDI on access to potable water. We predict that higher levels of greenfield FDI in water‐intensive sectors slow the rate of access to potable water in developing countries, with these adverse effects conditional on subnational politics. We hypothesize that this is more likely to occur in polities marked by relatively large poor and marginalized populations, where regulatory capture is more likely to occur. To test our intuition, we analyze subnational data on greenfield FDI in India, confirming that multinational investment in “thirsty” manufacturing sectors are negatively associated with improvements in potable water access. We then present a controlled comparison case study of two Indian states, Kerala and Rajasthan, highlighting the political mechanisms conditioning FDI's effects on potable water.
"Trade, poverty, and social protection in developing countries." European Journal of Political Economy (2018).
By - Desai, Raj M and Rudra, Nita.
How do shifts in trade affect social protections for the poor? Although the fraction of the world's population considered the “extreme” poor has fallen by over one-half over the past quarter century, many of those lifted above the global poverty line remain vulnerable to shocks that could place them back into poverty. These are the groups that require social protection to stabilize their incomes. Among the shocks to which the absolute poor have been exposed are those created by trade liberalization, particularly of the agricultural sector. The resulting risks, uncertainties, and threats to social stability from this type of trade require that the poor be provided with some forms of adjustment assistance. We examine the effects of trade components on several dimensions of social protection in developing countries, including spending, coverage, and adequacy over the past two decades. We find that, contrary to previous studies, disaggregating trade may be a key to determining which international market variables drive expansion of social protection. Disaggregating trade balances in agricultural vs. manufactured goods reveals that net food and agricultural exporters provide better social protection than countries that report agricultural trade deficits. Meanwhile, countries with manufacturing trade surpluses tend to experience reduced social protection coverage. We reason that governments of net agricultural exporters face incentives to invest in social programs that extend eligibility to the rural poor. Manufacturing export-driven economies, on the other hand, are likely participants in global production chains that limit the capacity of the public sector to extend social protection.
"Reassessing the links between regime type and economic performance: Why some authoritarian regimes show stable growth and others do not." British Journal of Political Science 45.2 (2015): 253-285.
By - Chandra, Siddharth and Rudra, Nita.
This analysis challenges claims that regime type determines national economic performance, and hypothesizes that the level of public deliberation, rather than broad categories of regime type, is the driver of national economic performance across political systems; specifically, that negotiations, disagreements, and compromises between decentralized decision-making partisans (e.g., citizens, business representatives, professional associations, labor, and public administrators) are the underlying causal mechanism explaining the non-monotonic relationship between different types of political system and economic performance. Countries with high levels of public deliberation more often experience stable growth outcomes, while other countries can make radical changes in economic policy with uncertain outcome. The variation in public deliberation within regime type is significant, especially amongst authoritarian regimes. One startling implication is that, in certain situations, impressive gains in economic growth can be achieved only at the expense of active negotiation and participation in the policy-making process.
"Are developing countries really defying the embedded liberalism compact?." World Politics 66.4 (2014): 603-640.
By - Nooruddin Irfan and Rudra, Nita.
This study evaluates the embedded liberalism hypothesis in a broad swath of less developed countries (LDCs). The authors find that LDC governments pursue a distinct welfare state policy that protects citizens from economic insecurities associated with global market expansion. Specifically, governments use public employment—and particularly employment in civil services and administration—to foster domestic stability alongside market expansion. However, such jobs are targeted to politically salient groups, not poorer groups that might also face increased economic uncertainty postopenness. In turn, public employment shores up public support for openness. The authors' findings suggest that free traders have reasons both to celebrate and to bemoan this LDC embedded liberalism compact. On the positive side, LDC governments are working hard to maintain political support for free trade; on the other hand, the compromise of protecting privileged groups at the expense of others in society raises questions about the long-term sustainability of their strategy.
"Globalization and the politics of natural resources." Comparative Political Studies44.6 (2011): 639-661.
By - Rudra, Nita and Nathan M. Jensen.
Much political science scholarship, including important work in this journal, has explored the implications of natural resource endowments— particularly oil and other highly valuable export commodities—on political and economic outcomes. Although the first wave of literature emphasized the negative effects of these resources, more recent work emphasizes how domestic institutions can condition the relationship, sometimes leading to positive effects. In this special issue, the authors expand this literature in two important ways. First, they renew attention on the international dimensions of this relationship, exploring how trade, migration, foreign investment, and other global forces influence the effects these resources have on countries. Second, they link the study of the globalization—natural resources nexus to broader debates in international and comparative political economy, such as how domestic institutions shape the impact of globalization and how economic factors affect the political survival of regimes and individual leaders. The five studies in this collection use a variety of research methodologies (formal models, country case studies, and large-N empirical analyses) to examine several different international economic factors linking resources with politics. The findings provide new insights into the politics of natural resources, expand the traditional focus of the resource curse literature to include other natural resources (e.g., water), and shed light on whether globalization has the ability to improve natural resource governance around the world
"Why international organizations should bring basic needs back in." International Studies Perspectives 10.2 (2009): 129-150.
By - Rudra, Nita.
An important milestone in the development debate is the recognition of poverty as a multidimensional phenomenon via the capabilities approach. However, a challenge remains in that many governments in less-developed countries continue to avoid prioritizing issues of absolute deprivation. This paper demonstrates how and why existing efforts to operationalize capabilities may distract policy makers from giving sufficient weight to issues of basic survival. We propose that international organizations can address this challenge through a method of triangulation: (1) identify how countries rank on universal goals of human development; (2) identify how countries rank on universal goals of basic needs provision; and (3) promote participatory poverty assessments. This approach ensures that absolute deprivation issues are addressed, and it establishes an acceptable (and necessary) balance between standardization and local complexity.
"Welfare states in developing countries: unique or universal?." The Journal of Politics 69.2 (2007): 378-396.
By - Rudra, Nita.
Do varieties of welfare capitalism exist in the developing world? This analysis challenges scholars of comparative political economy and international political economy who treat the political economies of less developed countries (LDCs) as more or less identical to one another or, at the other extreme, as nations marked by tremendous diversity. This paper is one of the first attempts to highlight systematic differences among the political economies of the developing world, particularly with respect to their distribution regimes. Using cluster analysis, the results illustrate that welfare efforts in LDCs are either directed towards promoting market development (a productive welfare state), protecting select individuals from the market (a protective welfare state), or both (a dual welfare state). The discovery of distinct patterns of welfare regimes in LDCs presents hitherto unknown implications for the influence of domestic politics and policies in late twentieth-century globalization.
Globalization and the Strengthening of Democracy in the Developing World American Journal of Political Science 49.4 (2005): 704-730.
By - Rudra, Nita.
Scholars and policy makers have long assumed that trade and financial liberalization encourages developing countries to become more democratic; yet no one has developed formal hypotheses about the causal relationship between globalization and democracy. This article shows that these two trends are indeed related, but not necessarily in the direct manner that has commonly been postulated. Combining theories of embedded liberalism and conflict‐based theories of democracy, the model presented here depicts the process that affects decisions to strengthen democracy as trade and capital flows increase. I argue that increasing exposure to international export and financial markets leads to improvements in democracy if safety nets are used simultaneously as a strategy for providing stability and building political support. Empirical evidence is provided by econometric analysis covering 59 developing countries for the time period 1972–97.
"Globalization and the decline of the welfare state in less-developed countries." International Organization 56.2 (2002): 411-445.
By - Rudra, Nita.
Why have trends in government welfare spending in developing countries diverged from those in developed countries? I address this question by investigating the effects of capital and trade flows on government welfare spending in fifty-three developing countries. Using an original measure of labor power in developing countries, I test the links between international markets, labor's political strength, and the welfare state. I argue that labor's collective-action problems, caused by large populations of low-skilled and surplus workers, offset labor's potential political gains from globalization. I show that when the proportion of low-skilled workers in a nation is high, globalization will lead to a decline in welfare spending. Most significantly, the results suggest that in nations where labor-market institutions are not yet well developed, government social-welfare spending is constrained by international market, forces.
“David and Goliath? How Small Developing Economies Respond to Large Emerging Markets International Studies Quarterly. Forthcoming
By - Daniela Donno and Nita Rudra
Has the rise of large emerging economies influenced the foreign economic policies of smaller nations? Many of the BRICS’ (Brazil, Russia, India, China, South Africa) dominance in export markets for low-skilled goods pose a particular challenge for ‘surplus labor’ countries characterized by large populations of unskilled and under-employed labor. We theorize the incentives of firms and governments in surplus labor countries to form south-south preferential trade agreements (SSPTAs) as a means of diversifying and expanding trade relationships in the face of this enduring challenge. Of all the BRICS, our findings show that the countries forming the most South-South agreements are those whose exports have been most displaced by China. We verify this pattern using both systemic and country-specific measures of the China ‘shock’. Imports from China, in contrast, have no significant effect on SSPTA formation. Our account, which helps resolve the dual puzzle of declining trade with rich countries and the proliferation of SSPTAs in recent decades, underlines the implications of China’s rise on the developing world.