Does competition help co‐operation?

Abstract
Co‐operative sugar factories in western India are economically successful even though rife with factional politics. Since they are not heavily subsidised, what makes them operate efficiently? Political competition between elected leaders of neighbouring factories drives them to compete economically. This in turn drives them to expand, innovate and diversify production. Nothing in the standard rhetoric of co‐operation explains this tendency toward competitive risk‐taking. Likewise, standard economic theories of competition overlook the political forces which drive these industrial leaders.

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