State intervention in India has persisted but has proved far from immune to critiques of traditional dirigisme. An examination of the power sector shows that waves of reforms since 1991 have together created a hybrid and regionally differentiated state-market system. Blurring the public-private boundary, this reinvented "state capitalism 2.0" displays both refurbished modes of intervention and new governance arrangements with private players. Nonetheless, as the power sector's continually dismal condition suggests, this state-capitalist hybrid has not (yet) provided a coherent alternative to older dirigisme or the Anglo-American mode of "deregulatory" liberalization. Instead, between 1991 and 2014 its ad hoc, layered emergence generated distinctive forms of dysfunction.Coupled with competitive politics, its ever-increasing institutional complexity rendered it internally incoherent and vulnerable to rent seeking on multiple fronts.Power sector evidence suggests that state intervention in India has remained simultaneously indispensable and dogged by persistent administrative and financial difficulties. Examining its internal institutional transformations helps to explain the apparently contradictory nature of the contemporary Indian state: at once business-friendly, populist, and often underperforming.
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Reinventing state interventionIn recent years state intervention has enjoyed a renewal of academic interest. Scholars wrote of the "flexible" or "hidden" developmental states of pre-recession Ireland and the United States (Ó Riain 2000; Block 2008), the rise of a more "regulatory" form of state activism in China (Yang 2004; Hsueh 2011), and the "new", "liberal", or "renewed" developmentalism of Brazil, then still growing strongly (Ban 2013;Trubek 2013;Hochstetler and Montero 2013). This nascent literature suggested that the state activism of the twenty-first century was far from a return to the old centrally planned dirigisme of the twentieth: the state's forms and activities had been transformed in the face of changing economic and political contexts.According to this interpretation, the second generation of state intervention has two interrelated "vocations" (Levy 2006: 368). It is corrective, seeking to repair ineffectual elements in older national models-often in line with Washington Consensus-style critiques.But it is also constructive, oriented towards creating, supporting, and adjusting rather than dominating markets. As such it is characterized by new forms of public-private governance arrangements and the increasing exposure of state agencies to the discipline of market competition, however asymmetric in practice (Trubek 2013;Musacchio and Lazzarini 2014).This fusion of dirigisme and liberalization has many labels, but perhaps the most catchy and evocative is "state capitalism 2.0". 1 For a brief moment in the aftermath of the 2008 global financial crisis, state capitalism 2.0 captured attention as a possible alternative to the Anglo-American deregulatory model. India often featured as a marginal example i...