Public participation is generally assumed to be a necessary if not fundamental condition for development. Most studies do not, however, question the kind and level of collective action that would be desirable. This paper provides a novel empirical analysis of the impact of collective action on economic development using data for South India. The paper models collective action as endogenous to economic development and distinguishes between its static and dynamic properties. The results show that while excessive activism may harm state income, collective action in the context of responsible bargaining systems may contribute toward increased economic development.
Collective action is typically understood as a concerted effort by individuals or groups to attain certain objectives (see Tarrow, 2003). This is the view adopted in public economics (see Esping-Andersen, 1990 and Olson, 1971), work on the action of labor unions (see Freeman & Medoff, 1984), interest group theories (Buchanan & Tullock, 1962), research on common resource management (see Meinzen-Dick & Di Gregorio, 2004), work on collective violence (e.g., McAdam, 1982, Tilly, 1993 and Tilly, 2003), theories of democracy formation (e.g., Przeworski, 1985) and recent research on public action if there is development (Drèze & Sen, 1991). In particular, the participation of the poor in the process of development is viewed by many as an essential element of successful development strategies (Ahmad et al., 1991, Drèze et al., 1995 and World Bank, 2001). Participation in social and political decisions provides individuals with a sense of value and identity and is an important means to voice the needs of vulnerable population groups. However, the development literature rarely asks what type or what level of participation is desirable, and very little work exists that establishes empirically the impact of public participation and collective action on economic development.1 In particular, there is an absence of empirical evidence on whether that impact is direct or whether it depends on specific transmission mechanisms, what the static and dynamic properties of those mechanisms are and whether collective actions act as an external shock to the economy or are endogenous to the process of economic development. This paper addresses these gaps in the literature using empirical evidence from South India. The paper compares and contrasts two concrete forms of collective action (industrial strikes and politically motivated riots) used as forms of public activism to exert political pressure. The paper revisits the “development model” of the south Indian state of Kerala and asks whether and how collective actions affect the development of poor economies.
Most development texts, including recent World Bank and United Nations publications, argue that public participation in the process of decision making is necessary, if not fundamental, for the implementation of successful development strategies. These studies do not, however, consider that collective action can take different forms and be based on different motivations. Moreover, the development literature rarely provides rigorous, empirically based analysis, of the extent and importance of public participation on economic development. This paper examined empirically the impact of collective action and public participation on economic development in South India. Our analysis uncovered important aspects of that relationship, notably the endogenous nature of collective action and its different static and dynamic effects. The paper entails, therefore, substantial implications for the understanding of the relationship between collective action and economic development.
