The (State–Private) Ties that Bind

Governments often collaborate with the private sector to design and implement major economic initiatives. In studying such state–society collaborations, sociologists tend to focus on how institutional contexts drive outcomes. Although this institutional approach has proven generative, it can overlook important micro-level interaction patterns between state and private-sector actors that could also affect economic outcomes. In this study, we examine how bureaucrats in the Indian government interacted with private-sector representatives to design and implement an industrial crafts park. Using ethnographic observations, interviews, and supplemental survey data, we show how bureaucrats’ status biases in favor of certain private-sector actors led to interaction patterns that blinded them to fatal flaws in the project design and ultimately contributed to its dramatic failure. Bringing an interactionist lens to state–society economic engagements, this study reveals how interaction patterns can aggregate to influence large-scale development outcomes. More broadly, it highlights an important but undertheorized pathway by which bureaucrats may inadvertently cement social stratification through the very projects that aim to alleviate economic inequality. We propose that an interactionist approach to state–private collaborations and policy design can contribute to solving global poverty.