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Abstract
Economic reforms sought to replace the Indian statedominant economy with a liberal, competitive market economy. However, a plethora of recent scams indicate that collusive rentsharing arrangements between business and policy makers are prevalent. A nexus has developed, linking politicians and business, as well as the bureaucracy. These trends signal a breakdown of competitive markets and the accumulation of wealth via corruption. This paper explains crony capitalism within a framework of interaction between four stakeholder groups whose motives and behaviour have altered in the recent context. These are political executives, political parties, business entities and the bureaucracy. Using the coal mine block allocation controversy as a case study, we examine the modus operandi of crony capitalism as a capture of the policy process. We examine the limitations of the present corrective political and legal processes.
The paper concludes with a set of recommendations for curbing crony capitalism via reform of :
(a) the political funding system,
(b) the policy process,
© the audit institution and
(d) the business environmentLinks