India's Economic History

India's economic history has been a case study for economists of the "Public Choice Theory" school. The maxim held by all free market economists is that people are motivated mainly be their self-interests. Although people often do act based on their concern for other people, the basic motive behind a person's actions is typically a concern for their own self. Public Choice theorists take this self interest and ascribe it to the people in power. Public Choice economists believe that people acting in the political marketplace are motivated by self interest, whether they be voters, politicians, lobbyists or bureaucrats (Shaw). The Indian economy has been thoroughly dominated by the Indian bureaucratic class for over two centuries. Its economic policies have served to keep the vast majority of the country in poverty. In modern history, the policies implemented by the Indian Government and its bureaucrats were brilliant only in the manner in which they maintained the power and influence of the Indian elites.

Until the last decade, India had one of the worst economic systems in the world for almost two centuries. It was an economy that was built from the corrupt foundations laid by the British Empire. The British imposed their "permanent settlement" in 1793, promising it would bring huge economic and social benefits to the impoverished colony. When the British Enquiry Commission reviewed the results of the settlement, they found that "'the settlement fashioned with g

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Category: Foreign - I