Research News

The first results from a major international project investigating state-business relations across India and a range of countries in sub-Saharan Africa are published today (12 January 2010) by the DFID-funded Research Programme Consortium on Improving Institutions for Pro-Poor Growth (IPPG).

The findings, which range from a new index that compares the effectiveness of state-business relations in Indian states, to a study of institutional weakness in post-apartheid South Africa, share the aim of identifying the political and economic factors affecting the relations between states and businesses and which shape the institutions (both formal and informal) which govern them.

Research highlights include:

• A new state-business relations (SBR) measure for the 16 major Indian states has discovered that top economic performers such as Gujarat, Maharashtra and Haryana, failed to make the top half of the table. Southern Indian states Tamil Nadu, Karnataka and Andhra Pradesh lead the rankings in terms of the measured effectiveness of state business relations, followed by Rajasthan, in fourth place, leading the Northern states.
• A new study by officials in the Zambia Revenue Authority explores how different interest groups in Zambia influence the adoption of pro-poor budgets. The paper examines the role non-state actors can play in shaping tax and expenditure policies through institutional arrangements which allow their participation in the budget process.
• An investigation of why South Africa's economic performance following fifteen years of democratic government has failed to meet expectations, with a particular focus on the emergence of politically well-connected black corporate elites.

The state-business relations research involves teams from Ghana, Mauritius, South Africa, Zambia, India and the UK from the research programme consortium, Improving Institutions for Pro-Poor Growth (IPPG). The initiative is unusual in involving both economists and political scientists working on state-business relations issues, as well as peer-to-peer working across the Southern hemisphere.

"Through this wide-ranging comparative research we learn some valuable lessons about how generalists and specialists, businesspeople and government, can work together politically to remove obstacles to economic growth and find solutions which are pro-poor," said IPPG co-director Dr Adrian Leftwich. "We also see what happens when state-business relations goes wrong."

• IPPG research papers on state-business relations are available on the IPPG website, or on R4D.
• Project record for IPPG.