Governing Through Markets: Multinational Firms in the Bazaar Economy

Abstract

This article highlights a counterintuitive dynamic of neoliberal globalization. India has controversially liberalized foreign investment rules in the politically sensitive food retail sector. Critics argue that India bowed to pressure from multinational corporations, consistent with a common view that under neoliberalism markets eclipse state power. We suggest by contrast that policymakers seek multinational firms to strengthen their capacity to govern food markets that for centuries have been dominated by networks of local traders. These traders use informal conventions of market governance that have long proven resistant to centralized state control. Global retailers promise to transform these opaque, “traditional” systems into transparent, “modern,” supply chains that comply with liberal rule of law principles. Thus we argue the turn to multinational capital should neither be understood simply through the logics of state capture or welfare economics, but rather also as a political governance project that illustrates how different kinds of markets produce different conceptions of the state.