A sophisticated economy is one in which business relationships are defined by formal legal contracts. When extreme events — such as Covid-19 — impact such an economy, there is a greater disruption. In India, a large part of the economy is held aloft by family relationships or friendship, and the good behaviour of a repeated game.
The residual states of the incomplete contracts are dealt with through pragmatic renegotiation. In such an environment, extreme events are handled in a more sensible fashion. This will help the non-modern part of the Indian economy come back better ...
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