Social democracy, it is often said, is nice but pricey. Whatever its merits in the rich countries of Western Europe, social democracy is frequently dismissed as an infeasible model for developing countries. Based on generosity towards the poor and protection against market competition, the...

This paper is a revised version of an Economic History thesis submitted to the London School of Economics in September 2000.The main text assumes analytical rather than chronological form, and, to avoid breaking the flow of the argument, it refers to persons, Labour Party structures and...