The Ethical Dimension in Political Market Orientation: A Framework for Evaluating the Impact of India’s Look East Policy on Regional Income Convergence

Abstract

In this paper, we employ what we term as 'the ethical dimension in political market orientation (PMO)' framework to underline how an integration of information from relevant stakeholder groups can inform the formulation of market-oriented, yet ethical policies. Against the backdrop of India's Look East Policy (LEP), we undertake a critical analysis of historic economic data from 1980 to 2014 in the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura, often termed as the Seven Sisters because of their interdependence. Our analysis of the data, using time-series methods, reveals that policy changes ensuing from the economic reforms of 1990s and the initiation of the LEP in 1991 have resulted in regional income convergence in North-Eastern India. A key contribution of our work emanates from the fact that we determine two structural breaks endogenously from long time-series data, thereby identifying three distinct policy regimes, rather than specifying exogenous breaks based on historic and theoretical conjectures. Overall, our work offers both conceptual insights into processes that enable ethical and inclusive policy making, as well as empirical evidence emerging from stochastic convergence of incomes per capita for the Seven Sister states in the North-Eastern region in India, to illustrate how regional economic inequality can be reduced through targeted market-oriented policies.

The Three Decades of Look East Policy and India’s Northeast Region

“…The people affected by the past and present road projects have common perceptions about corruption, difficulties in getting compensation, soil erosion, rampant cutting of hills, and landslides. There are doubts about the proper utilization of the funds allocated for different projects (Choudhury et al 2021: 358–359). Although several years have passed, the outcome of the policy is still unclear.…”

“…By doing so, India is keen to project itself as a ‘regional power in the Indo-Pacific region and to respond strategically to the rapid expansion of China’ (Yumnam 2020: 104). Unlike other regions of the country, the northeast region is an integral part of the policy since the latter is strategically ‘significant and vital’ for India’s economic growth and for its aspirations to assume global leadership (Choudhury et al 2021: 358).…”