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First Nature and the State
The process of policymaking in India has largely ignored the nature of the interaction between nature and institutions. One aspect of this interaction, that is, the consequences of the efforts of the state to overcome the constraints posed by nature is discussed in this essay. It does so by taking William Cronon’s concept of first nature to the southern Karnataka district of Mandya to argue that, despite the success of the Krishnaraja Sagar dam, small peasant agriculture that was the consequence, at least in part, of first nature limited the growth of agrarian capital in the district, leaving it dependent on state capital.
Among the less debated aspects that influence the devel-opment of economic policy, in a country that is as regionally diverse as India, is the importance of thegeographical features of each region in determining the trajectory of a regional economy. In a milieu where a great deal of emphasis, in policy documents at least, is placed on the development of appropriate institutions, we do not find similar sensitivity to regional variations. Indeed, there are instances of development of national economic institutions being carried out in a way that deliberately glosses over the demands ofregional variation. Arguably, the most striking case of this trend has been the sacrifice of regional stock exchanges at the altar of the two stock exchanges in Mumbai. The implicit view in policy circles would appear to be not just that institutions are more important than the geographical and other specificities of a region, but also that in the development of national institutions, regional institutions must, if need be, give way.
This dominance of institutions over geographical considerations in economic policy is not entirely endorsed by academic discourse. There has been a continuing spirited debate over whether it is institutions or local geography that can be considered the dominant factor in economic growth (Acemoglu et al 2002; Easterly and Levine 2003; Sachs 2003). It is notentirely surprising that evidence has been found for both sides of this argument. It is only to be expected that if resourcesembedded in local geographies can be important players in the growth process, much would also depend on the effectiveness of the institutions that enable the use of these resources. Rather than looking at the relative importance of geography and institutions, the more relevant questions would be: How do institutions and geography interact with each other in the growth process? Can institutions overcome the challenges posed by geography that go beyond the availability of resources? In the context of policymaking, what are the consequences of the efforts of the state to overcome the constraints posed by nature?
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