Jump to ContentJump to Main Navigation
Show Summary Details
More options …

Law and Development Review

Editor-in-Chief: Lee, Y.S.

2 Issues per year

See all formats and pricing
More options …

Informal Institutions in the Regulatory State: The Case of Bureaucracy in India

Yugank Goyal
  • Corresponding author
  • Economics and Law, O.P. Jindal Global University, Jagdishpur Village, Sonipat - 131001, India
  • Email
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
Published Online: 2017-05-06 | DOI: https://doi.org/10.1515/ldr-2017-0004


Development narratives have often hinged on the idea of regulatory governance, particularly in developing countries where the regulatory agencies are generally dysfunctional. The paper argues that inefficient performance of regulatory agencies of poor countries can be explained, inter alia, by the existence of informal institutions that are embedded in these ‘formal’ organizations. Presence of informal networks in a regulatory governance structures may often erode the independence of the agency while benefiting the network. As an important factor overlooked in literature, informality in regulatory bodies breaks the mainstream narrative of regulatory bodies. I use the example of India and examine the institutional endowments of informality and its stickiness through time in regulatory frames. I show how the informal network of civil servants permeates every regulatory agency in the country and undermines an independent functioning. Policy conclusions follow.

Keywords: bureaucracy; informal institutions; civil services; IAS officers; regulatory agency


  • Arthur, W.B., Increasing Returns and Path Dependence in the Economy (Michigan: University of Michigan Press, 1994).Google Scholar

  • Ayres, I. and J. Braithwaite, Responsive Regulation: Transcending the Deregulation Debate (Oxford: Oxford University Press, 1992).Google Scholar

  • Bardhan, P., Corruption and Development: A Review of Issues, 35 Journal of Economic Literature, no. 3 (1997).Google Scholar

  • Bardhan, P., Scarcity, Conflicts, and Cooperation: Essays in the Political and Institutional Economics of Development (Cambridge, MA: MIT Press, 2005).Google Scholar

  • Bhattacharya, A.K., “Why Non-IAS Experts Feel Unwelcome in Government-run Bodies”, Business Standard, available at: <http://www.business-standard.com/article/opinion/a-k-bhattacharya-the-outsider-113111700724_1.html>, accessed 16 February 2017.Google Scholar

  • Braithwaite, J., Responsive Regulation and Developing Economies, 34 World Development (2006).Google Scholar

  • Braithwaite, V. and M. Levi (eds.), Trust and Governance (NY: Russell Sage Foundation, 2003).Google Scholar

  • Brown, A., J. Stern, B. Tenenbaum and D. Gencer, Handbook for Evaluating Infrastructure Regulatory Systems (Washington, DC: World Bank, 2006).Google Scholar

  • Burke, J., “India’s Rulers Lose £22bn in Massive Mobile Phone Scam”, The Guardian, 16 November 2010, available at: <http://www.theguardian.com/world/2010/nov/16/india-corruption-government>, accessed 25 December 2014.

  • Christensen, T. and P. Lægreid, Regulatory Agencies – The Challenges of Balancing Agency Autonomy and Political Control, 20 Governance (2007).Google Scholar

  • Cohen, M.D., J.G. March and J.P. Olsen, A Garbage Can Model of Organizational Choice, 17 Administrative Science Quarterly (1972).Google Scholar

  • Cook, P., C. Kirkpatrick, M. Minogue and D. Parker, “Competition, Regulation and Regulatory Governance: An Overview”, in P. Cook, C. Kirkpatrick, M. Monogue and D. Parker (eds.), Leading Issues in Competition, Regulation and Development (Cheltenham: Edward Elgar Publishing Limited, 2004).Google Scholar

  • David, P., Clio and the Economics of QWERTY, 75 American Economic Review, no. 2 (1985).Google Scholar

  • Dani Rodrik, Goodbye Washington Consensus, Hello Washington Confusion? A Review of the World Bank’s Economic Growth in the 1990s: Learning from a Decade of Reform, 44 Journal of Economic Literature, no. 4 (2006).Google Scholar

  • Deepak, J.S., “Retired, Not Tired”, Times of India, available at: <http://articles.timesofindia.indiatimes.com/2014-01-07/edit-page/45954479_1_civil-servants-bureaucrat-post-retirement>,accessed 16 February 2017.

  • Dempsey, P.S., Market Failure and Regulatory Failure as Catalysts for Political Change: The Choice between Imperfect Regulation and Imperfect Competition, 46 Washington and Lee Law Review, no. 1 (1989).Google Scholar

  • Denzau, A. and D. North, Shared Mental Models: Ideologies and Institutions, 47 Kyklos (1994).Google Scholar

  • Dewey, C., Anglo-Indian Attitudes: Mind of the Indian Civil Service (London: Bloomsbury Publishing, 1993).Google Scholar

  • DiMaggio, P. and W. Powell, The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality, 48 American Sociological Review (1983).Google Scholar

  • Dubash, N., The New Regulatory Politics of Electricity in India: Embryonic Ground for Consumer Action, 29 Journal of Consumer Policy (2006).Google Scholar

  • Dubash, N., Independent Regulatory Agencies: A Theoretical Review with Reference to Electricity and Water in India, 43 Economic and Political Weekly (2008).Google Scholar

  • Dubash, N. and B. Morgan, Understanding the Rise of the Regulatory State of the South, 6 Regulation and Governance, no. 3 (2012).Google Scholar

  • Dubash, N. and D.N. Rao, Regulatory Practice and Politics: Lessons from Independent Regulation in Indian Electricity, 16 Utilities Policy (2008).Google Scholar

  • Ferguson, J. and S. Hasan, Specialization and Career Dynamics Evidence from the Indian Administrative Service, 58 Administrative Science Quarterly (2013).Google Scholar

  • Fukuyama, F., The Origins of Political Order: From Prehuman Times to the French Revolution (London: Profile Books, 2011).Google Scholar

  • Gilardi, F. and M. Maggetti, “The Independence of Regulatory Authorities”, in D. Levi-Fair (ed.), Handbook on the Politics of Regulation (Northampton, MA: Edward Elgar Publishing, 2011).Google Scholar

  • Godbole, M., Electricity Act, 2003: Questionable Wisdom, 38 Economic and Political Weekly (2003).Google Scholar

  • Goyal, Y., “Independence and Competence of Regulatory Institutions: Select Cases from India”, in P. Mehta (ed.), Competition and Regulation in India 2015 (Jaipur: CUTS International, 2015).Google Scholar

  • Hancher, L. and M. Moran, Capitalism, Culture, and Economic Regulation (Oxford: Oxford University Press, 1989).Google Scholar

  • Harari, Y.N., Sapiens: A Brief History of Humankind (London: Random House, 2014).Google Scholar

  • Helmke, G. and S. Levitsky, Informal Institutions and Comparative Politics: A Research Agenda, 2 Perspectives on Politics (2004).Google Scholar

  • Hochstetle, K., Civil Society and the Regulatory State of the South, 6 Regulation & Governance (2012).Google Scholar

  • Iyer, L. and A. Mani, Is There a Political Cycle in Bureaucrat Assignments? Evidence from the Indian Administrative Service, Warwick Research Archive Portal, available at: <http://www2.warwick.ac.uk/fac/soc/economics/staff/faculty/mani/iyer_mani_cswep_submission1.pdf>, accessed 16 February 2017.

  • Jordana, J., D. Levi-Faur and X. Fernandez i Marin, The Global Diffusion of Regulatory Agencies: Institutional Emulation and the Restructuring of Modern Bureaucracy, presented at a conference organized by the European Consortium for Political Research and the Centre for the Study of Regulated Industries on ‘Frontiers of Regulation: Assessing Scholarly Debates and Policy Challenges’ (Bath, UK, 7–9 September) (2007).Google Scholar

  • Kodwani, D., Infrastructure Regulation and Institutional Endowments in India: Comparative Analysis of Telecom and Electricity Regulation Policies, in International Society for New Institutional Economics Conference (Boulder, USA, 20–24 September 2006).Google Scholar

  • Krishna, A., Continuity and Change: The Indian Administrative Service 30 Years Ago and Today, 48 Commonwealth & Comparative Politics (2010).Google Scholar

  • Ledeneva, A.V., How Russia Really Works: The Informal Practices that Shaped Post-Soviet Politics and Business (Ithaca: Cornell University Press, 2006).Google Scholar

  • Leftwich, A., Governance the State and Politics of Development, 25 Development and Change (1994).Google Scholar

  • Levi-Faur, D., The Global Diffusion of Regulatory Capitalism, 598 The ANNALS of the American Academy of Political and Social Science (2005).Google Scholar

  • Levi-Faur, D., Handbook on the Politics of Regulation (Cheltenham: Edward Elgar, 2011).Google Scholar

  • Levitsky, S. and M.V. Murillo, Variation in Institutional Strength, 12 Annual Review of Political Science (2009).Google Scholar

  • Levy, B. and P. Spiller, The Institutional Foundations of Regulatory Commitment: A Comparative Analysis of Telecommunications Regulation, 10 Journal of Law, Economics and Organisation (1994).Google Scholar

  • Luce, E., In Spite of the Gods: The Strange Rise of Modern India (London: Little, Brown Book Group, 2006).Google Scholar

  • Majone, G., From the Positive to the Regulatory State: Causes and Consequences of Changes in the Mode of Governance, 17 Journal of Public Policy (1997).Google Scholar

  • Majone, G., Nonmajoritarian Institutions and the Limits of Democratic Governance: A Political Transaction-Cost Approach, 157 Journal of Institutional and Theoretical Economics (2001).Google Scholar

  • Majone, G. (ed.), Regulating Europe (London: Routledge, 2002).Google Scholar

  • May, R.J., Disorderly Democracy: Political Turbulence and Institutional Reform in Papua New Guinea, discussion paper in State Society and Governance in Melanesia (Canberra: Australian National University, 2003/3).Google Scholar

  • Misra, B.K., Indian Administrative Service (New Delhi: Rupa Publications, 2012).Google Scholar

  • Moran, M., Publication Review: Oxford Handbook of Regulation, 4 Public Law (2011).Google Scholar

  • Morgan, B. and K. Yeung, An Introduction to Law and Regulation: Text and Materials (Cambridge: Cambridge University Press, 2007).Google Scholar

  • Mukherji, R., Managing Competition: Politics and the Building of Independent Regulatory Institutions, 3 India Review (2004).Google Scholar

  • Mukherji, R., The Politics of Telecommunications Regulation: State-Industry Alliance Favouring Foreign Investment in India, 44 Journal of Development Studies (2008).Google Scholar

  • Nelson, H., Papua New Guinea: When the Extravagant Exception Is No Longer the Exception, working paper in State, Society and Governance in Melanesia Project (Canberra: Australian National University, 2003/2).Google Scholar

  • North, D., Institutions, Institutional Change and Economic Performance (Cambridge: Cambridge University Press, 1990).Google Scholar

  • North, D., J. Wallis and B. Weingast, Violence and Social Orders (Cambridge: Cambridge University Press, 2013).Google Scholar

  • OECD, “Government Capacities to Assure High Quality Regulation in Brazil”, in OECD Review of Regulatory Reform: Brazil (Paris: OECD, 2008).Google Scholar

  • Ostrom, E., Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge: Cambridge University Press, 1990).Google Scholar

  • Peisakhin, L. and P. Pinto, Is Transparency an Effective Anti‐Corruption Strategy? Evidence from a Field Experiment in India, 4 Regulation & Governance (2010).Google Scholar

  • Pejovich, S., The Effects of the Interaction of Formal and Informal Institutions on Social Stability and Economic Development, 2 Journal of Markets & Morality (1999).Google Scholar

  • Peltzman, S., Toward a More General Theory of Regulatory Regulation, 19 Journal of Law and Economics, no. 2 (1976).Google Scholar

  • Phadke, A. and S.C. Rajan, Electricity Reforms in India: Not Too Late to Go Back to the Drawing Board, 38 Economic and Political Weekly (2003).Google Scholar

  • Pierson, P., Increasing Returns, Path Dependence, and the Study of Politics, 94 American Political Science Review, no. 2 (2000).Google Scholar

  • Potter, D.C., India’s Political Administrators: From ICS to IAS (New Delhi: Oxford University Press, 1996).Google Scholar

  • Prado, M., Challenges and Risks of Creating Independent Regulatory Agencies: A Cautionary Tale from Brazil, 41 Vanderbilt Journal of Transnational Law (2008).Google Scholar

  • Prosser, T., Theorising Utility Regulation, 62 Modern Law Review (1999).Google Scholar

  • Prosser, T., Regulatory Contracts and Stakeholder Regulation, 76 Annals of Public and Cooperative Economics, no. 1 (2005).Google Scholar

  • Purkayastha, P., Power Sector Policies and New Electricity Bill E from Crisis to Disaster, 36 Economic and Political Weekly (2001).Google Scholar

  • Radaelli, C.M., Diffusion without Convergence: How Political Context Shapes the Adoption of Regulatory Impact Assessment, 12 Journal of European Public Policy (2005).Google Scholar

  • Reddy, G.P., Danes are like That: Perspectives of an Indian Anthropologist on the Danish Society (Mørke, Denmark: Grevas forlag, 1993).Google Scholar

  • Rodrik, D., Institutions for High-Quality Growth: What They are and How to Acquire Them, 35 Studies in Comparative International Development (2000).Google Scholar

  • Rudolph, L. and S. Rudolph, “Redoing the Constitutional Design: From an Interventionist to a Regulatory State”, in A. Kohli (ed.), Success of India’s Democracy (Cambridge: Cambridge University Press, 2001).Google Scholar

  • Silbey, S.S., Taming Prometheus: Talk of Safety and Culture, 35 Annual Review of Sociology (2009).Google Scholar

  • Silbey, S.S., R. Huising and S. Coslovsky, The Sociological Citizen: Recognizing Relational Interdependence in Law and Organizations, 59 L'Année Sociologique (2009).Google Scholar

  • Spiller, P. and M. Tommasi, “The Institutions of Regulation: An Application to Public Utilities”, in C. Menard and M. Shirley (eds.), Handbook of New Institutional Economics (Dordrecht: Springer, 2005).Google Scholar

  • Sriram, J., “Revenge of the Babus: Liberalisation Has Expanded the Power of Bureaucracy, Creating a Permanent Establishment that Never Retires”, India Today, 27 September 2013, available at: <http://indiatoday.intoday.in/story/revenge-of-the-babus-liberalisation-expanded-power-of-bureaucracy/1/312039.html>,accessed 16 February 2017.

  • Stern, J. and S. Holder, Regulatory Governance: Criteria for Assessing the Performance of Regulatory Systems, 8 Utilities Policy, no. 1 (1999).Google Scholar

  • Stigler, G., The Theory of Economic Regulation, 2 Bell Journal of Economics and Management Science (1971).Google Scholar

  • Stiglitz, J.E., “Formal and Informal Institutions”, in I. Serageldin and P. Dasgupta (eds.), Social Capital: A Multifaceted Perspective (Washington, DC: World Bank, 2000).Google Scholar

  • Stiglitz, J.E. “Is There a Post-Washington Consensus Consensus?”, in Narcís Serra and Joseph E. Stiglitz (eds.), The Washington Consensus Reconsidered: Towards a New Global Governance (Oxford: OUP, 2008).Google Scholar

  • Tanzi, V., “Corruption: Arm’s Length Relationships and Markets”, in G. Fiorentini and S. Peltzman (eds.), The Economics of Organised Crime (Cambridge: Cambridge University Press, 1997).Google Scholar

  • Thatcher, M., The Third Force? Independent Regulatory Agencies and Elected Politicians in Europe, 18 Governance (2005).Google Scholar

  • Thiruvengadam, A.K. and P. Joshi, Judiciaries as Crucial Actors in Southern Regulatory Systems: A Case Study of Indian Telecom Regulation, 6 Regulation & Governance (2012).Google Scholar

  • Trubek, D.M. and A. Santos, The New Law and Economic Development: A Critical Appraisal (Cambridge: Cambridge University Press, 2006).Google Scholar

  • Vaishnav, M. and S. Khosla, The Indian Administrative Service meets Big Data, Carnegie Endowment for International Peace (2016).Google Scholar

  • Wilkinson, S., The Politics of Infrastructural Spending in India, Department of Political Science, University of Chicago, mimeo (31 July 2006).Google Scholar

  • Williamson, C., Informal Institutions Rule: Institutional Arrangements and Economic Performance, 139 Public Choice (2009).Google Scholar

  • Williamson, J., Democracy and the “Washington Consensus”, 21 World Development, no. 8 (1993).Google Scholar

  • World Bank, The World Bank’s Role in the Electric Power Sector: Policies for Effective Institutional, Regulatory, and Financial Reform (electricity sector reforms) (Washington, DC: World Bank, 1993).Google Scholar

  • World Bank, Toolkits for Private Participation in Water and Sanitation (water and sanitation sector reforms) (Washington, DC: World Bank, 1997).Google Scholar

  • World Bank, Economic Growth in the 1990s: Learning from a Decade of Reform (Washington, DC: World Bank, 2005).Google Scholar

  • Zachariah, M., The Durability of Academic Secondary Education in India, 14 Comparative Education Review (1970).Google Scholar

About the article

Published Online: 2017-05-06

Published in Print: 2017-06-27

Citation Information: Law and Development Review, Volume 10, Issue 1, Pages 147–177, ISSN (Online) 1943-3867, ISSN (Print) 2194-6523, DOI: https://doi.org/10.1515/ldr-2017-0004.

Export Citation

© 2017 Law and Development Review.

Citing Articles

Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.

Yugank Goyal
American Journal of Economics and Sociology, 2018, Volume 77, Number 2, Page 541

Comments (0)

Please log in or register to comment.
Log in