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India’s political economy and economic policies can no longer be understood in a purely domestic-oriented or closed economy framework. This paper offers an “India in the world” framework that analyzes how traditional borders of domestic political economy and international politics interact in shaping domestic policy and political economy. In contrast to existing political economy approaches on India, such a framework pays attention to the changing nature of domestic political economy but also how international factors affect and shape domestic imperatives and goals. Simultaneously, domestic developments have important global consequences in terms of increasing (or decreasing) global attention and external economic flows to India, which must be attended to in understanding India’s domestic political economy. I also suggest that the global world is not only a set of exogenous structures and constraints, but rather, the changing global order is deployed and used by state actors to refurbish their political and state power to achieve both domestic and global aims. However, if state actors fail to renew the domestic sources of growth or contribute to crony capitalist or debt-laden domestic growth, then, even attending to global alliances may fail to renew the economic sources of state power and create serious contradictions in India’s domestic and global strategies despite new realignments favoring India at the global level. These ideas help us understand Modi regime’s political economy in a new way.

Since the Second World War, Africa and especially Sub-Saharan Africa (SSA) has had the poorest economic performance of any region in the world. Ironically, many African countries had set out with high hopes once they had thrown off the yoke of colonial rule but it was not long before disaster struck. Against the background of an expanding world economy Africa experienced ‘a chronic failure of economic growth’ (Collier and Gunning, 1996), so that by the end of the 20th century incomes per capita were little better than they had been at the time of independence, and in some cases a good deal worse. The main problem was the failure to improve the efficiency of resource use; in contrast to the position in many other developing countries total factor productivity was either static or negative for much of the time (Ndulu and O'Connell, 1999; Crafts, 2000). Thus while poverty was declining elsewhere, it was increasing steadily in SSA. By the turn of the century two-thirds of the population were estimated to be living at subsistence or below the absolute poverty line, while nearly one-half the world's poor lived in Africa (United Nations, 1997).

There are of course many factors which can explain this remarkable state of affairs, but the one we shall focus on this chapter is Africa's great weakness in statecraft, by which we refer to political systems, bureaucracies, administrative organizations, property and legal rights and general issues of trust and contract enforcement. In other words, it is a question of good governance as opposed to bad governance and corruption. The general argument here is that with few exceptions African countries have lacked a sound social and political base which would favor growth and development and that this base has tended to deteriorate over time.