Closed Loop, Open Borders: Wealth Inequality and Uneven and Combined Development In India

Abstract

Abstract The purpose of this article is to offer an alternative perspective to worsening wealth disparity in India. It does so by critically applying the framework of uneven and combined development in a novel way. It develops two analytical constructs based on internal and external forces that collectively contribute to increasing wealth inequality. The internal force is a closed loop in which the state privileges rent-seeking activities as a response to uneven development in the first place. The external force comprises open borders that not only facilitate wealth and capital flight, which is linked to rent-seeking activities but also deprives the economy of critical resources for development. Together, the specific institutional arrangements associated with the closed loop and the siphoning off of wealth under open borders in the form of capital flight to the global economy exacerbate wealth inequality.