Columbia International Affairs Online: Working Papers

CIAO DATE: 08/2010

The Formation of Preferences in Two-level Games: An Analysis of India's Domestic and Foreign Energy Policy

Joachim Betz, Melanie Hanif

July 2010

German Institute of Global and Area Studies


This paper examines the formation of India’s energy‐policy strategy as an act of doubleedged diplomacy. After developing an analytical framework based on the two‐level game approach to international relations (IR), it focuses on the domestic context of policy preference formation. India’s energy strategy is shaped by a shortage of energy and the scarcity of indigenous reserves; these problems have together resulted in a growing import dependence in order to sustain economic growth rates, outdated cross‐subsidies, overregulation, and nontransparent bureaucratic structures which are adverse to private investment. The Indian government still dominates the energy sector, but large electoral constituencies within the country exert a considerable indirect influence. The paper analyzes how all these domestic necessities combine with India’s general foreign policy goals and traditions to form an overall energy strategy. We finally discuss how this strategy plays out in a competitive international environment where global resources are shrinking (with most claims already distributed) and environmental concerns are on the rise.