POLITICAL PLURALISM, PUBLIC POLICIES, AND ORGANIZATIONAL CHOICES: BANKING BRANCH EXPANSION IN INDIA, 1948-2003

Data on the expansion of 94 commercial banks in India from 1948 to 2003 were analyzed to test the proposition that political pluralism-wherein competing parties control the state and national governments of a nation-can promote business expansion. The results confirm that such political pluralism reduces the power of either government to constrain business decision making but that pluralism might at times lead to unhealthy competition between parties, harming local expansion opportunities. The data show that, in India, banks selectively exploit political pluralism to guide their expansion decisions.