This book is both empirically and theoretically rich and original. Adnan Naseemullah conducts impressive field-level interview research that ranges across pharmaceuticals, auto-components, and textiles, among other sectors, which is carried out across an eclectic mix of states, not just the industrial heartland of Gujarat and Maharashtra but also Uttar Pradesh and especially some of the big cities of Pakistan. Such comparative work across borders is very unusual and extremely welcome. Naseemullah also demonstrates his methodological adeptness by combining this with a statistical-econometric analysis of a large dataset of more than 8,000 firms. This diversity in method is coupled with very engaging critical reviews of a wide-ranging academic literature on the political economy of growth and industrialisation from both India and Pakistan.

Naseemullah’s theoretical contribution begins with an empirical insight. “Time and again, I encountered similarly sized firms in the same industries and the same regions and cities that have established and maintained markedly and consistently different practices with regard to the core challenges of industry: acquiring capital and recruiting and retaining workers” (p. 28). He argues that this is evidence against the standard assumption from institutional economics, that firms are profit maximisers and are subject to externally created institutions, i.e., that they are “institution takers.” Instead he argues that firms can be framed as a “site of institutional dynamics” and “there may be agency at the firm level” so that firms themselves may become “institution makers.” His study focuses on India and Pakistan post-liberalisation and argues that two types of institutional creativity have emerged for firms. The first are firm-created institutions that organise and coordinate the acquisition of capital and training, recruitment- and retention of workers through formal rules, such as a Human Resources Department, incentive and productivity based pay, and in-house training. The second are institutions that accomplish the same goals through informal-personal networks such as community, labour contractors- and raising capital through family and networks to engage with labour and capital respectively. Crucially the key influences on the evolution of this firm-level institution making are mainly internal to the firm, the education, family background, work experience of manufacturers, and age of the firm (p. 52). This generates the empirical insight about the diversity of institutional organisation of firms in the same location and industry.

Were this to be the first big picture book focused on the political economy of growth and industry that the reader encountered, it would be a wonderful introduction to much wider debates. There are extensive and engaging critical guides to a rich body of related work concerning, for example, the state in the Indian economy (pp. 65–95), the colonial background (pp. 98–102), the debate about globalisation and the nation state (pp. 179–184), and the background to industrial statism in Pakistan (pp. 210–217), among various others. However, though engaging for the new reader (especially concerning the India-Pakistan comparative focus) I would have preferred less background and more direct confrontation with alternative schools of thought. Naseemullah’s work is provocative and exciting but he too often shies away from engaging with others.

An interesting aspect of this book is that its point of departure is to explain relative industrial success (not the more typical perception of failure) in both India and Pakistan. The metric is a bit limited—rapid industrial growth over 20 years to 2012 (p. 1) in India and also Pakistan (p. 208) that is not supplemented by enough discussion of exports, upgrading, or diversification—but this is an intriguing start. Naseemullah notes that this is a puzzle, given the manifest state failures in the provision of infrastructure and the failure of India to improve on indices such as the World Bank Doing Business index. This is a statist book so it is not surprising that he sees this as a puzzle. He argues that “industrial production is only possible if firms are able to overcome coordination challenges relating to labour and capital to enable the provision of trained workers and ‘patient’ finance at a big enough scale and for long enough to arrange and deploy manufacturing processes” (p. 5). Such challenges were overcome in the years before liberalisation, he argues, by “Indian or Pakistani ‘Statism’. The puzzle then is how to explain industrial growth that continued at an annual average of 6–7% in the years of post-statist liberalisation. This unchanged growth rate is evidence to Naseemullah that liberalisation can’t be the explanation for post-1980 or post-1991 industrial expansion, especially since market-supporting institutions such as the enforcement of property rights remain weak. This argument avoids engagement with the emerging body of similar firm-level studies that seeks to demonstrate how liberalisation in the 1990s changed corporate behaviour in India in a more competitive, productive, and dynamic manner, and so led with a lag to rapid economic growth after 2003. Why no critical engagement with works by Anusha Chari, Laura Alfaro, Kunal Sen, Arvind Panagariya, and Jagdish Bhagwati, among many others?

Naseemullah focuses on development after statism, or how the industrial governance of firms has been reconstituted in an era of liberalisation. Other scholars have instead emphasised arguments that could be called development because of statism. Jyoti Saraswati conducted an in-depth study of the software sector in India and argued that state-induced capability building in the 1970s was crucial to continued growth of the sector in the era of liberalisation/globalisation. Other scholars have conducted similar studies of the pharmaceutical or auto-components sectors. Aseema Sinha back in 2005 wrote a widely cited study of the political economy of federalism in India, arguing that state-level governance in India helps explain both development outcomes. Naseemullah’s notes highlight his disagreement with these arguments. He notes that the populist states of Tamil Nadu, Maharashtra, and Andhra Pradesh have had twenty years of similar growth rates to Gujarat with its powerful statist development model (p. 44). Also he notes that we should expect to see distinct differences in firm-level debt-capital ratios influenced by state-level industrial governance regimes—that we don’t is evidence against the importance of state level governance. Against the mass of interview and statistical evidence that Sinha brings to bear to support her thesis of the importance of state-level governance, however, the contrary evidence in Naseemullah seems rather slight. Naseemulah argues that with the era of liberalisation, firms sought to make their own governance institutions and that this led to a bifurcation of governance into formal and informal institutional structures. He argues that in “India from independence to the 1980s, state agencies collectively enforced industrial investment priorities, maintained labour quiescence through either state-driven corporatism or through state-enforced fragmentation of labour representation and deployed trade policy regimes that protected domestic firms while managing the transfer of technology” (p. 38). Highlighting the importance of liberalisation in this way would jibe with scholars such as Jan Breman who have argued that liberalisation stimulated a casualization and informalisation of the labour market. But how to reconcile the argument with the work of scholars such as Ronald J. Herring, who has argued that the bureaucracy, instead of collectively enforcing investment priorities, could in practice always be accessed by selective capitalists through ties of particularism such as family, school, marriage, and caste? Barbara Harriss-White, in decades of field-work, has long highlighted an incredible diversity of industrial structure and governance (in the same industrial sectors) that continued across the eras of statism and liberalisation.

As well as not taking his provocative argument into battle with alternative views of political economy, Naseemullah misses an opportunity to highlight its relevance for contemporary India. The conclusion looks inward and re-states the key arguments of the book then briefly casts its net wider to discuss the relevance of industrial governance beyond South Asia. How does the argument relate to big debates in contemporary India concerning Modi and his smaller government and more governance agenda, the statist response in India (or donor rescue in Pakistan) to the global financial crisis, or the current economic slowdown?

The book is original, stimulating, and provocative but I would have preferred more head-on engagement with alternative political economy perspectives.