I am most grateful to the chairman and trustees of the Prem Bhatia Memorial Trust for doing me the honor of delivering the Prem Bhatia Lecture for 2007. It is a singular honor and I am most beholden to all of you, as especially to the Bhatia family: to Shrimati Shakuntala Bhatia for the care and affection with which she has planned my visit; to Anand who I am meeting for the first time, to my very dear friend, Shyam, with whom I briefly overlapped at Oxford and whose career as a journalist I have watched with much admiration; and to Pratima, who I last saw as a young girl, also at Oxford. Thank you all.
Sadly I never had the good fortune of meeting the late Prem Bhatia in person and yet I feel I have known him all my life. When as a graduate student I was beginning my research on India I was first introduced to his writings. I remember the excitement with which I devoured his columns in different newspapers and journals. In many ways he was one of my early teachers who stimulated my passion for India, and what little I know about India, I owe a huge debt to him. It is therefore a particular privilege for me today to pay my homage to this great soul.
Prem Bhatia folded many lives into one. He was a soldier, a consummate diplomat, a columnist and editor, a broadcaster, an institution builder and a sage who counseled prime ministers and statespersons. He was a Nehruvian democrat; intellectually a liberal to the core; and with a passionate commitment to social justice, liberal parliamentary democracy, and a plural and secular India. He was an Indian patriot and a nationalist but his humane outlook embraced the whole of South Asia. He wrote with a rare feeling and empathy for the people of the region that so endeared him to his readers in countries as far apart as China, Bangladesh, Nepal, Pakistan and Sri Lanka.
He had many friends and admirers; but if you read his writings he did not go out to win friends or influence people by pandering to their prejudices or mouthing prevailing wisdom. He spoke truth to power and often swam against current; he was fair but often scathing in his criticisms of the failings of the government. And yet he was sought out by a succession of prime ministers and such was the trust that he enjoyed that more than one of them confided in him; they invited him to accompany them on their travels; and he often served them as their eyes and ears. It was his integrity, his love for the people and his ability to empathize with the pain of the nation that endeared him to so many and won the respect of even those who did not see eye to eye with him. To the end he remained faithful to his journalistic credo of discovering truth and that remains his enduring legacy to posterity. At a time when the media and journalism are becoming highly commercial and where truth has become a casualty, he remains a shining example of journalistic integrity and a role model for all those engaged in what many of us regard as the noblest of professions and the watchdog of democracy.
But the most remarkable thing about him was his humanity which is constantly borne out in his writings. He wrote with ease and elegance and with a rare sensitivity; his prose was always erudite and learned, nuanced and balanced but he did not allow his writings to be encumbered by the weight of his scholarship; he avoided clichés, banalities or generalizations; he always stuck to the evidence that was often backed by his instinctive intuitions and insights derived from varied experience. While he was no ideologue, he was willing to chance his arms, make bold propositions and stand up for his convictions. He was truly, in every sense of the word, a public intellectual and a public servant par excellent. It is no exaggeration to say that Prem Bhatia belongs to that rare breed of devoted public servants who have made India the great country that it is. His integrity, his sense of fair play and his deep love for the people of India are to me his defining characteristics and the hallmark of his enduring legacy. It is therefore with some trepidation that I stand before you to honor this great man with my humble offerings. It is only appropriate that that I speak today on the challenges of democratic governance in the Twenty First Century – a subject close to his heart.
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Government is, and will remain, central to our society. An efficient, effective and inclusive government is the best guarantor of social justice and an orderly society. Government consists of both the processes and the institutions that manage and control the will and the collective affairs of the society. The societal primacy of government is also inextricably linked to what is virtually a universal aspiration for democratic governance. As to why we aspire for a democratic government, the answer is unequivocal. We know from experience that democratic governments are (or at least they should be) participatory, transparent and accountable, they respect plural and diverse perspectives, they promote gender and social equity, and they allow freedom of choice, expression and beliefs. There is no question that a democratic government that reflects the popular will is better equipped to ensure social justice, to create an even playing field that allows its citizens the freedom to realize their full potentials and creativity; and to deliver the services and opportunities that people need.
In the last quarter of the Twentieth Century there was a crisis of governance as democratic governments failed to live up to popular expectations. There was not only cynicism and skepticism about the ability of the government to serve its citizen; but there was also a general erosion of the legitimacy of democratic government itself. Some of the criticism may not be entirely true or perhaps exaggerated. But the fact remains that there is disillusionment with government and many of the criticisms are for good cause. Some of these dissatisfactions relate to the very fundamentals of democratic government itself. Others arise from government’s inability to adjust to compelling changes taking place globally and nationally that is impacting on the very nature and character of the state and the government. There is plenty of evidence, that democratic governments, institutions and processes are under stress; and that they are not working as they should, both in the developed and developing societies. The skepticism is being manifested in a variety of ways:
More and more people do not trust their governments.
There is a stigma attached to government services. In many countries government has become synonymous with corruption; cronyism and misrule.
Governments no longer attract the best, the most talented or the idealistic people – in many countries governments are finding it difficult to recruit competent and trained people. Those already in the government are often disillusioned, cynical and marking time.
The citizens are becoming apathetic; and the number of citizens who turn out to vote is declining in many countries – both in developed and developing societies.
The governments were not always so unpopular or in such low esteem as they are today; nor were their record always so lackluster. Through out much of the 20th Century the government was called upon to solve the biggest and the most challenging problems of the society. During the Great Depression it was the government that pulled the economies out of the quagmire and put millions of unemployed people back to work. After the Second World War the people of Britain and several other European countries turned to the governments to ‘create a home fit for the heroes’ by establishing a welfare state with universal health care, housing, education, and social security nets. And throughout the century the governments have spearheaded efforts to abolish illiteracy and safeguard public health by fighting pestilence and plagues. They have led in eliminating deadly diseases like small pox, guinea worms, and polio; they have opened up new frontiers of knowledge by funding research and building new universities. And while governments have been unable to eliminate poverty and inequality, they endeavored to create an even playing field through an equality of opportunities. In the post-War years and with the end of formal European imperialism, the people of the newly independent countries looked to their governments to fulfill the promise of the liberation struggle for prosperous and egalitarian societies. In varying degrees the post-decolonized states have sought to end underdevelopment and dependence caused by long periods of colonial exploitation. Much has been accomplished; and a lot more has to be done.
For democratic government to survive and retain its universal appeal, it must revitalize and adapt to the changing circumstances and needs of the society. Securing the future of democracy is the most important governance challenge in the twenty first century. It will call for careful nurturing of democratic institutions, a fresh vision, imagination; and an ability to adapt and innovate. However, the very tradition of government is against innovations; and possibly with good reasons. The most important concern of those involved in public management reform has been to curb the discretionary powers of public officials. Governments in most countries invariably control the largest public resources and unless constrained by laws and procedures there is nothing to prevent wanton greed, avarice, nepotism and corruption. Preventing public officials from abusing their power is the first order of business in public management.
But like all desirable objectives when applied mechanically, the letters of the law acquire greater significance than the spirit behind the law. The insistence of the public sector reformers to define precise rules for the disbursement of public funds and for appointments, transfers, promotions, entitlements etc. might have kept avarice and nepotism in check but it stifled initiative, creativity, and plain common sense. With such hide bound rules, playing by the book became a virtue in itself; and many public servants forgot the very purpose for which they were being paid by the tax payers. The loss of public service ethos was the death of public service itself. Not surprisingly, governments have become inefficient, irresponsive, rigid, bloated and wasteful. Power corrupts and absolute power corrupts absolutely.
A vigorous debate was unleashed about the role and function of the governments; and voices both on the left and the right of the political spectrum clamored for a fundamental overhauling of the government. To be sure in the past couple of decades many of the governments have responded to the challenges by what is popularly referred to as ‘reinventing government’. The dilemma for the government is real: how to thus regain its legitimacy. In the changed environment, government must rethink its role, be innovative and find new, flexible and alternative ways of doing business; and it must provide better and more extensive services with diminished resources. President Bill Clinton summed up the challenges succinctly:
‘The era of big government is over, but the era of big challenges is not. People want smaller government, but they want active and effective national leadership. They want government that provides them the means and opportunities to meet their responsibilities and solve their own problems.’1
The obvious recognition that ‘government’ and ‘governance’ is not the same thing helped to reinvent or reengineer the way government functions without altering its public purposes. Governance is not the exclusive preserve of the government; nor even that of the inter-government international organizations. Governance of the society is much larger than the government. Governance consists of both the processes and the institutions that manage and control the will and the collective affairs of the society. At its broadest, governance includes the activities of the institutions of the government, the civil society organizations and the market. They may include civil society organizations like churches, the non-governmental organizations (NGO), private and commercial firms working for profit; the networks and associations, the trade unions and so forth. These organizations all function within the laws laid down by the government, sometimes in collaboration with, and at other times independently of the government; and not infrequently even against the government. The re-conceptualization of government has enabled us to govern or conduct governance in ways very different from the past. The appropriate role of the state is to regulate, facilitate, and create an enabling environment that fosters development and empowers citizens but does not stifle initiative or enterprise, leaving citizens the room to manage and shape their own communities.
The public purpose of the government, i.e. solving public problems, remains the same as before. But the government in the Twenty First Century has to solve them in ways that does not create bureaucracy. The era of hierarchical government bureaucracy, the predominant organization model used for delivering public services and fulfill public policy goals is now slowly coming to an end. In a fast changing world, power is more dispersed; the boundaries are more fluid, and populations more diverse and mobile – they defy simple, one-size-fits-all solutions. Governance is no longer top-down execution by government fiat. The old style bureaucratic structures no longer fit the needs of the societies and governments have to build networks of capacities, in which the combined resources and expertise of many agencies – governmental and non-governmental – and individuals are brought together to address a particular public problem. Hierarchical governments are being replaced by interlinked webs or networks of agencies within the government and often linked beyond it to the civil society organizations and the market. Rigid bureaucratic systems, command and control procedures, and silo-like departmental organizations cannot deal with problems that defy solutions within departmental boundaries. The core responsibility of the government has shifted from managing people and programs to coordinating resources for producing public value. In the new governance paradigm, governments have moved away from being operational agencies to regulatory and enabling authorities.
There has also emerged a broad societal consensus that the orderly and effective governance of our society requires a multi-sector approach in which the government, the market, and the civil society each perform a different role, sometimes independently of each other, and sometimes in support of each other; and at times in opposition to each other. The acknowledgement that public problems are best solved by combined societal effort has transformed our views of how society is governed; and it has opened up enormous new possibilities and opportunities. In this multi-sector governance each sector should do those things that it does best but without detracting from the government’s role as the guarantor of social justice. Many, but not all, traditional governmental functions can now be left to the market and the civil society. However, it should be acknowledged that each sector has its comparative advantages in which they perform the task better, more effectively and cheaply.
Neither the market nor the civil society can be a substitute for the government. Each sector must recognize that society is complex and solutions to the problems confronting it calls for a more concerted and integrated approach. No sector or agency of the government has all the resources or expertise to solve a problem. The governments have to build network of capacities, in which the combined resources and expertise of many agencies (governmental and non-governmental) and individuals are brought together to address a public problem. This has come to be known as the network of capacities or networked governance. The OECD calls this ‘distributed public governance’. Here governance is ‘co-produced’; i.e. government is the product of joint public and private effort by government ministries.
This networked governance or New Public Management has helped to cut the cost of government, has made governments more citizen friendly, and has harnessed technology to bring the government to the doors of the citizens improving the quality and delivery of services and increasing citizen satisfaction. Through New Public Management, governments have been transformed from an operational state to a regulatory and facilitating government. These are essential and important elements of good governance.
In this lecture I will discuss how the New Public Management constitutes a radical departure from the way in which societal governance has been delivered although the purpose of the government remains the same. The concepts, principles, and the methods of New Public Management will require making democratic governance and the political processes more effective; the constitutional, institutional, and structural arrangements will have to be modified to enable more effective participation by all citizens; and most importantly, NPM must ensure that social justice remains at the core of the government. I will also argue that democracy is not only valuable in itself but also because democratic governance has the best potential for advancing human welfare, development, and social justice and for distributing the benefits of development. Efficiency on its own is not sufficient to justify the authority of the government or endow it with legitimacy.
The discourse on New Public Management (NPM) has focused largely on efficiency, transparency, and cutting the cost of the government. It does not adequately address the concerns of developing societies; nor has enough attention been paid to strengthening democratic institutions, processes and institutions. This is scarcely surprising since much of the ideas for the NPM came from the experiences of the developed society where the existence of strong democratic institutions and rule of law is taken for granted. An explicit effort to ensure that the disadvantaged groups are not excluded from the purview of the government must remain integral to any government reform. The economic well-being of the citizens still remains a responsibility of the government but with economic liberalization becoming the accepted orthodoxy, that role of the government is being neglected.
Although the criticisms of the failure of the government came from both the liberals and the conservatives, much of the impetus for the New Public Management reflected the ideological preference of the conservatives. The conservatives particularly object to the role of the government as the guarantor of social justice; and consider that it is not the business of the government to redistribute wealth or interfere with the market forces. They accused the governments of using progressive taxation as a means of promoting a redistribution of wealth. To them the market is the most efficient allocator of resources and therefore the government should not interfere with the invisible hand of the free market. Free market has become a sine qua non for the membership in the international economic community, for attracting foreign investment, and for securing jobs and markets. The uncritical enthusiasm for market based reform of the government, and the shifting of large areas of governance away from control and oversight of the elected officials may have actually weakened the democratic accountability of the government and in the process has also diluted a central role of the government as the guarantor of social justice.
The conservatives have a distinctly different view of societal order. They do not distrust governments but they fear that governments are using their authority to stifle individual freedom and entrepreneurship for the benefit of those groups who do not contribute to the making of national wealth. They oppose government’s role in social engineering; and have consistently argued for a minimal government. In fact they remain wedded to the nineteenth century Gladstonian dictum: “Government that governs least, governs best.” They advocate a return to a modified form of the laissez faire doctrine where government responsibilities were confined to providing peace and stability and the citizens were left alone to advance their own interests. The emphasis was on individual rights and entrepreneurial spirit. The community and group interests were left undefined; and the care of the poor, the needy and the disabled was left to the charitable instincts of those who were better off. Mrs. Margaret Thatcher was a powerful advocate of this view:
‘There’s no such thing as society. There are individual men and women and there are families. And no government can do anything except through people, and people must look after themselves first. It is our duty to look after ourselves and then, also, to look after our neighbors.’2
And across the Atlantic, Ronald Reagan had thundered that “the problem of the government is the government” and he would “get the government off the back of the people” if elected as the President. The Thatcher-Reagan views resonated with all those who were unenthusiastic about the welfare state; and together they provided the most powerful articulation for a ‘minimal government’.
There is no doubt that the introduction of certain market principles and practices into the functions of government has been beneficial in introducing flexibility, cost consciousness, and responsiveness to the needs of the citizens. While selective use of market practices has certainly helped to make governments more efficient and responsive, the pendulum is in danger of swinging too far to the other side. The market too has to be kept in check to prevent it worst excesses.
The invisible hands supposedly regulating and self-correcting the market forces is nothing more than a fiction. Markets cannot function without government regulation. For its effective functioning, the market must rely on the government to protect private property rights; to enforce contracts; to provide arbitration in the event of disputes; to manage and regulate patents and trade marks; to facilitate the exchange of goods and services by setting standards for measurement; to create the conditions for international trade; to protect against theft and fraud; and most important of all to control the money supply through manipulation of interest rates. There is clearly no such thing as unfettered free market. Nor can any society leave the market uncontrolled. ‘To allow the market mechanism’, as Karl Polanyi pointed out, ‘to be the sole director of the fate of human beings and their natural environment … would result in the demolition of society’. This may be a slight exaggeration but the truth is that markets based on short term profit maximization cannot be a sound or desirable principle for societal organization.
Just as the powers of the government have to be tempered to make it responsive to the wishes of the people, there is a need to be cautious about the dangers of rolling back the government too far in favor of the market. The sustained roll back of the welfare state, the onslaught on affirmative action, and growing role of the special interest groups and campaign finance in determining the outcome of the election results, ensured that the democratic government became a corporate project. It is no surprise that the last two decades of the 20th century witnessed the largest economic expansion in history of the West but the benefits barely accrued to the poor. In fact 90% of the increased wealth was concentrated in the top 10% of the population; and according to some studies not only has the polarization between the rich and the poor became wider but also in real terms the poor actually have been further impoverished. According to Anuradha Mittal of the Oakland Institute, 45 million people (or 17 percent) of the American population are living below the poverty line. She writes:
“The top 2.7 million people [in the US] have as much income as the bottom 100 million. In other words, the richest 1 percent of Americans is projected to have as much income as the bottom 38 percent. Wealth is even more concentrated, with the wealthiest 1 percent of the households owning nearly 40 percent of the nation’s wealth. The bottom 80 percent own just 16 percent of the nation’s wealth. To further widen this inequality, CEOs of U.S. corporations pocketed 419 times the average wage of a blue collar worker in 1998.” 3
In fact, the polarization between the rich and the poor has appears to be increasing unchecked. Even the Economist, the champion of free market, acknowledged:
The top thousandth of population are seizing the lion’s share of globalization gains. … The mix of technology and economic integration transforming the world has created an unparalleled prosperity. In the past five years the world has seen faster growth than at any time since the early 1970s. In the world the labor’s share of the GDP has fallen to historic lows, while profits are soaring. The typical worker in the United States has been stuck, with real wages growing less than half as productivity. … If you look back 20 years, the total pay of the typical top American manger has increased from roughly 40 times the average – the level for 4 decades – to 110 times the average now. 4
Limited government and economic liberalization have come to be viewed as the panacea for the economic problems of the developing societies; and the speed with which countries liberalize their economies appears to have become the measure and yardstick for sound economic policy and progress. But such claims proclaimed from the pulpits and repeated by the pundits are not borne out by evidence. Indeed at an aggregate level the developing countries have done well with the speeding up of economic liberalization. However, if one were to take away the contributions of China and India (neither of which played by the rules of economic liberalization and whose economic success precedes their belated and selective liberalization policies) from the global aggregate, the performance of the developing countries attributed to the policies of free market begins to looks rather questionable. This has important policy lessons for the developing countries beyond India and China. The reality is that India’s success is owed much more to its democratic institutions and processes and less to the external stimuli provided by the globalization.
In 2006 the Foreign Affairs declared India as a ‘roaring capitalist success’5. But like many commentators, unburdened by knowledge of the past, it failed to acknowledge India’s success was not just the product of globalization and its policy of economic liberalization. And, even though the world appears to have discovered India only in the last decade or so, the country was well on its way to becoming a major power prior to the globalization fever that gripped us all. Much of what is happening in India today should have been apparent to any discerning analyst a long time ago. India’s economic growth record has been quite impressive over a very long period of time. The country has been steadily marching forward since independence almost six decades ago. India is one of the few developing countries that have enjoyed sustained growth in per capita incomes since 1950. The economy of the country has been growing 6 percent since the 1980s; in the 1990s it averaged nearly 7 percent and after 2002 it began to gallop forward and all the indications are that the growth of the economy will accelerate compared to the past. Most noticeable are the expansion and diversification of food production, the adoption of new technologies and modern management, and advances in science, medicine, engineering and software development.
The macro-economics fundamentals are also sound. Domestic savings reached 29 % in 2004; the combined fiscal deficit of the Center and State governments although higher than it should be, has been falling and is manageable; the inflation is moderate despite the sharp increase in international oil prices; and foreign exchange reserves are at a very comfortable level of $155 billion. Much of the impetus for economic growth has come from domestic sources. Direct Foreign Investment has of course increased from $3.7 billion in the period 1997 -2001 to $5.4 billion in the period 2002 to 2005.6 But the level of DFI is small; it is almost a fraction of what goes into China; even India could absorb at least three times the amount that is currently flowing into the country. It is important therefore not to exaggerate the importance of global integration. India’s impressive economic growth combined with its large middle class consumers with substantial purchasing power; the existence of English speaking and scientifically trained manpower; and not least, the resilience of Indian democracy should have been obvious even in the early 1980s. The fundamentals in India, as the market makers like to say, have been sound for a very long time but only the hype was missing.
The euphoria and adulation that India has evoked, both at home and abroad, is every bit well deserved, but there is an important reason to be cautious about such a narrow business-centric view of India. It tends to obscure important issues and real challenges that lie ahead. India’s achievement at an aggregate level is certainly impressive; but it begins to look rather different when the figures are disaggregated. Indeed globalization may have brought plenty of glitter and glamour to India’s large urban centers. However, one does not need to be reminded that the country’s destiny cannot be realized so long as it is the home to half of the world’s destitute and illiterate, and when a third of its population lives below the poverty line.
Globalization has done little to lift the rural areas. It has left the vast majority of Indians unaffected. Pankaj Mishra makes the point most tellingly:
‘…business-centric view of India [he writes] suppresses more facts than it reveals. Recent accounts of the alleged rise of India barely mention the fact that the country’s $728 per capita gross domestic product is just slightly higher than that of sub-Saharan Africa and that, as the 2005 United Nations Human Development Report puts it, even if it sustains high growth rates, India will not catch up with high income countries. … . Nor is India very fast on the report’s Human Development Index, where it ranks 127, just two wrung above Myanmar and more than 70 below Cuba and Mexico. Despite recent reduction in poverty levels, nearly 380 million people live on less than a dollar a day.’ 7
There is another narrative, and another India. In this narrative it is the best of times and it is the worst of times. There is affluence and poverty, beauty and squalor; and opulence and deprivation. There are the well-heeled, western educated, and savvy global business persons notching up the global ladder of the wealthy and powerful; and then there is the India where women are the beasts of burden, where children suffer malnutrition, and where indebted farmers are committing suicide by the thousands. Pankaj Misra’s characterization of ‘two India’s’ is not far off the mark. There are two sides to almost every generalization that one can accurately make about India. On the one hand India has achieved remarkable expansion in food production, and famines and famine deaths have been virtually eliminated. Yet, 55% of children under five years old remain malnourished – nearly twice the levels reported in many parts of sub-Saharan Africa. Similarly, there has been a rapid expansion in the physical provisioning of schools, and close to 95% of the villages have a primary school within walking distance of one kilometer. Yet, adult literacy in 2001 was only about 61%, and close to two-thirds of Indian women could not read and write. Again, while life expectancy at birth has doubled from around 31 years in 1950 to 62 years today, India’s maternal mortality rate – 410 per 100,000 live births – is almost 100 times the levels found in the West. Infant mortality rates almost have been halved to 74 per 1000 live births in 1950-1998. But close to 2 million infants die each year – and most of these deaths are avoidable. Public health care through primary health care centers has spread to most parts of India, but serious issues of quality, access, and efficiency plague the proper functioning of the system.
India’s development has been characterized by persistent inequality. Its record for dealing with the chronically poor and the historically disadvantaged while substantial is still far from satisfactory. Caste and class differentials are stark, as is discrimination against girls and women. Public provisioning in rural areas is far worse than in urban areas. The quality of life for a sizeable number of Indians still remains unsatisfactory. All the disadvantages are concentrated in the poor – they are the most illiterate, the least healthy, the most malnourished, the least secure, and without an effective voice. Vulnerable groups, especially those which have suffered historic discrimination, have received little or less than their fare share of the benefits of development. To a large extent all of them are often the same and they belong to overlapping groups. They are predominantly dalit and adivasi; and in every community the women are invariably at the bottom of the heap. To a great extent, modern development has bypassed these socially and politically disadvantaged groups.
It is true that poverty is declining but, as the Planning Commission acknowledges, ‘at a modest pace which is no longer acceptable given the minimalist level at which the poverty line is fixed.’ The same document further acknowledges that disparity is not only between the rich and the poor: Gender discrimination ‘begins with declining sex ratio and goes on to literacy differentials b etween girls and boys.…. The divide between urban and rural India has become a truism of our times. … [And] Regional backwardness is another issue of concern’. There is a clear congruence of all forms of disabilities in the same groups of people. The poor are not only the most illiterate, but also the least healthy, malnourished, and in secure. The quality of life for one third of people in India remains unsatisfactory on all counts.8 These inequalities are visible across states, between rural and urban areas, within communities, and most significantly between women and men.
Globalization, as we have all learnt, is at best a mixed blessing. It creates winners and losers, it brings hope and despair, and it creates opportunities for some and takes away the livelihood of others. Consequently it has the potential for ‘economic distortion, destruction of social safety nets, accelerated environmental dangers, loss of cultural identities, and the spread of disease and conflict’. Admittedly the lives of a great many people have clearly improved with the freer flow of goods, services, capital and information; there is a real improvement in wages; and India’s share of goods and services in global trade has increased; new technology and market liberalization has not only stimulated the economy but also created well paid jobs; but it is also hurting the poor, the vulnerable and the disadvantaged. There are now two distinct India’s – the ‘shining India’ of the affluent, mainly urban and that is fast becoming the destination for corporate outsourcing, research and development, and consumer markets; and then there is also, as the BJP discovered to its discomfiture during the last general election, the ‘dark’, the neglected and mostly rural India that has been left out of the embrace of the globalization process. I suggest that to be successful globally, India must address the problem of governance at home.
The contrasting fate of the rich and the poor challenges our belief in the centrality of government to our society as the custodian of social justice. It also raises a number of important questions. How is it that the Indian democratic governance has been so successful in bringing progress and affluence to some, while neglecting the others? Can India’s democratic institutions that have served some of the people so well be strengthened and reformed to empower the poor and those left behind? Does India have the political will to tackle poverty and bring the benefits of development and affluence to nearly a third of its population that is now living below the poverty line? I will argue that India’s prospect as an emerging global power cannot be de-linked from the fate of those people living below the poverty line. The quest for India’s destiny as a great power hinges crucially on its ability to address the question of social justice through equitable distributions of the benefits of development. The challenge for India is not economic but political. Economic growth and redistributive justice is not a zero sum game in which India must chose either to pursue a rapid and urban-based double digit growth or alternatively pursue a more equitable growth but be reconciled to accepting a slower economic growth. That is a false dichotomy. Growth and social justice are not mutually exclusive categories. India can do both and indeed must do both. The success of India is owed to the miracle of its democracy and its democratic institutions and processes that have empowered the great majority of its citizens to realize their capabilities and entitlements. The failures too, ironically, stem from what may be described as democratic deficit.9
Democracy has taken firm roots in the country. India has had uninterrupted democratic governance longer than Germany, Italy or Japan. Surveys indicate Indian citizens generally accept the legitimacy of the electoral system and there is a strong commitment to the principles of electoral democracy among the poor. India has retained a liberal constitution and federal political institutions. Popular and periodic elections to renew the mandate of the government have never been interrupted, not even during the emergency in the mid-1970s; the enthusiasm for the vote, as demonstrated by the voter turnout, is impressive even compared with older democracies; the elections have been mostly fair and free – ensured by the constitutionally autonomous election commissions. The legitimacy of popular legitimacy of elections and the right of the majority to rule by smooth transitions of power from the incumbent government to the opposition that win a majority in the elections – the acid test of the institutionalization of democratic institutions – has never been questioned and is well established.
The Indian voters have displayed their innate astuteness; and their judgment on critical electoral issues and their maturing voting preferences have belied the misgivings of the so-called ‘modernists’ of the linkage between literacy and the exercise of democratic choices. Furthermore the citizens have grasped the power of the vote, used it as an instrument for political bargaining to obtain their demands from the leaders seeking their votes, and have frequently voted out an incumbent government that had failed to deliver on their promises. Multiple competing parties, free press, an independent judiciary, a statutory election commission, a vibrant civil society and a professional bureaucracy have underpinned the vitality of democracy. No less importantly, the voters have used the ballot as an opportunity to empower their groups and interests. More over, the voters have defied those who thought democracy was suited only to people of European extraction.
Multiple competing parties, a free press (to the extent that press are free of the owners’ views, interests, and ideological preferences), an independent judiciary, and the existence of other democratic processes have ensured that voters are able to exercise their franchise effectively. Vibrant English and vernacular media, and a rich variety of social reform movements, non-governmental organizations and pressure groups, help to ensure some measure of government accountability and transparency.
Political participation and democracy have been strengthened considerably by constitutional amendments approved in 1993 that have created new democratic institutions for local governance. So far 2.5 million members have been elected to Village Councils (Gram Panchayats). Even more strikingly, the Constitutional Amendments have ensured reservation of one-third seats for women in elections to local level institutions of rural and urban governance. Several positive changes are beginning to be felt at the grassroots level with the induction of more and more women into public decision-making. In addition to enhancing women’s participation, the reforms have contributed to boosting their confidence, and improving their status and position in society.
Perhaps even more impressive is India’s political success. The tenacity of its democratic institutions and processes helped India to build a broad national consensus amongst its diverse and heterogeneous population; it legitimized the government’s centrally planned development in a mixed economy; and most important of all, it provided the political stability for initiating nation-building projects. In retrospect it is also obvious that long term investments in human resources that created India’s scientifically trained pool (second only to the United States); the construction of its massive industrial and manufacturing base under state sponsorship; the building of the communication infrastructure that knit together a vast and diverse country; and the rise of an affluent middle class market larger than that of the European Union would not have happened without the stability provided by its democratic institutions.
Indian democracy provided the political stability that has enabled the state to build institutions and to put in place long term policies that have enabled India to take advantage of the opportunities offered by globalization. Any one who doubts this claim should ponder over the experiences of the Philippines, Indonesia and Pakistan – all of which at one time had seemed to be faring far better than India but fell by the wayside because in the absence of democratic institutions they were unable to neither manage the change nor sustain progress. It is democracy that differentiates India from China; and it is the resilience of India’s democratic institutions that give us the confidence in the continuing progress of the country. Whether China makes the transition without a popular upheaval is an open question. But we can state with confidence that the resilience of India’s democratic institutions will ensure that progress is sustainable.
The Indian democratic institutions have served the country well and the country is now poised for growth and development that few could have imagined possible. However, the same democratic institutions have failed the most vulnerable and the historically marginalized groups and communities. How does one explain the persistent inequality that has characterized India’s development? Or put differently, why have the same Indian democratic institutions that have brought prosperity to so many and have made the lifestyle of Indian elite the envy of the world failed the poor so miserably? Let me now turn to the democratic challenges that India faces. The explanations are complex.10
Our emphasis on democracy is premised on a belief that it is the best guarantor of orderly society and social justice. While Indian democracy in many ways in one of the marvels of our time, it is also clear that the democratic institutions in India are not functioning optimally and their record in promoting social justice has only been partially successful. There is a gap between the rulers and the ruled, with little sign of that divide being bridged. The two – i.e. the rulers and the ruled – may live in the same country but often they traverse different universe. Between elections the poor have no mechanisms to hold their elected leaders accountable; and for all practical purposes they are voiceless and consigned to hibernate. The influence of campaign finance, special interest groups and the dominance of big business further constrains the freedom of action of the elected representatives; and has further undermined the government’s role as the guarantor of social justice.
Not surprisingly the benefits of the state are monopolized by the powerful; and indeed there is evidence to suggest that even those schemes designed for the poor are monopolized by those with access to the government.11 Likewise the distortion of the judicial and societal institutions, public health, and education means that the poor are excluded from the benefits of these state institutions. There is no denying that all governments work within a broadly based consensus which is negotiated through complex bargaining amongst numerous stakeholders and powerful interest groups who have strong vested interests in preserving the status quo. There is a limit to the ability of the government to persuade the groups that are entrenched in power and stand to benefit from the status quo to voluntarily give up their privileged position in the name of fair play or social justice. The entrenched group will resist any attempts by the government to alter the existing power structure.
On the other hand the poor are largely unorganized and cannot be mobilized easily despite their large numbers. In the abridged version, democracy is reduced to the right of electoral participation periodically; and for the rest of the time the citizens have come to be seen as bystanders in the game of politics. The governments, faced with the conflicting demands of the articulate sections and the voiceless poor, seek safety by siding with the powerful. The situation is being further aggravated by the fact that increasingly the governments are bowing out in favor of the market, the fate of the poor has become even more uncertain.
From the perspective of the poor the roll back of government’s operational role in the management of the economy does not augur well, at least in the short term. As the sphere of government is rolled back, it invariably follows that the government will be downsized and many of the state enterprises will be privatized leading to losses of jobs now reserved for the members of the disadvantaged group. It is true that as the economy expands and the privatized state enterprises flourish, new and better paid jobs will be created. But in a knowledge-based economy only those who are well educated, skilled, savvy, English-speaking and internationally connected will be able to take advantage of the opportunities. Without a commitment to affirmative action, the private sector jobs are unlikely to go to the rural, locally educated person from a disadvantaged background. Market liberalization without an adequate social safety net is widening the gap between the rich and the poor; and the possibility that the poor will be further marginalized is no longer a matter of speculation.
Today, around the world, nearly a billion adults are illiterate, about as many people (including 200 million children) suffer from malnutrition; and some 350 million women may die before they reach their 40th year. The horrendous reality is that half of all these destitute, illiterate and malnourished live in South Asia. This suffering can be avoided. The government must play a pro-active role in ensuring the poor do not get left in the cold.
The poor remain poor not because the solutions are not there or because of the lack of resources. They are poor because they are not empowered enough to enforce their ‘entitlements’12. The role of the government in establishing the entitlement of the poor has acquired a greater urgency, especially as many of the functions of the government are rolled back; and many of the activities that it performed in the past have been left to the market or to the civil societies. Our past experience has shown that democratic institutions, affirmative action, and decentralization are necessary but not sufficient to create an even playing field. Investment in human resources development is essential to enabling the poor to realize their entitlements and to develop their capabilities to take advantage of the opportunities offered by globalization. The government policies and programs have to be backed by mobilization of the marginal groups, community organization, advocacy and training and building human capacity. We have already noted that despite its best intentions, the ability or even the willingness of the government to alter the social and political power structure is limited.
For the benefits of economic development to be equitably distributed requires recognition of the entitlement; and we know that entitlements cannot be realized without developing adequate capabilities of the poor. The students of history have long known this. The industrial revolution in England in the Eighteenth century and later elsewhere in Western Europe dramatically increased the gross national product, aggregate income and total supply of goods. But for nearly a hundred years after industrialization, few benefits filtered to the masses. While the captains of industry amassed vast fortunes and lived in splendid grandeur, for the bulk of the workers, life was nasty, brutish and short. Living conditions in the slums were appalling and workers had to do long hours in monotonous work in which children and women were also forced to join. The reason for this is easily explained. The majority of the population had no political rights and hence no capability to enforce their entitlements. It took the French Revolution, the revolution of 1830 and 1848, and the Great Reform Acts of 1832 and 1867 to broaden political participation through the gradual extension of the franchise. The Russian Revolution of 1917 was the culmination of a process begun in 1789. It was only through the exercise of their new political muscle which the vote endowed, that British and west European workers were gradually able to secure a welfare state which distributed some of the benefits of economic growth to the population. Better governance and smarter public sector management, and not merely economic growth and market liberalization, is the answer. Economic growth is important but it is a means to an end and not an end itself. The end is, and must be, the quality of life and human well being. Only now – slowly, belatedly and reluctantly – the development community has begun to focus on the importance of the role of the government in the empowerment of the poor. In short, effective participation by the poor in the democratic processes is the essential precondition for the expansion of capabilities and entitlements without which the benefits of development will not percolate to the weaker sections of the population.
Democracy without adequate safeguards has not worked for the poor. The founding fathers who wrote India’s constitution were well aware of the distorting impact of the societal power structure and therefore had built into the constitution the provisions to create an even playing field. India was the first country in the world, even ahead of the United States, to build affirmative action into the constitution. Caste discrimination was banned; and numerous legal and administrative instruments were devised to accelerate the development of the historically disadvantaged groups, especially the dalit and the adivasi. Political participation by the marginal groups, as we noted earlier, has been further strengthened by constitutional amendments approved in 1993 that created new democratic institutions for local governance. By reserving one-third seats for women in the local level institutions the government helped to empower the women. Some one million women had been elected to village councils, a further 50,000 to higher-level councils. Several positive changes are beginning to be felt at the grassroots level with the induction of more and more women into public decision-making. Affirmative action, political organization, and collective mobilization are gradually transforming the status and position of many socially backward communities.
While criticism of government ineffectiveness, inflexibility, and waste might be largely justified, it should not lead us to conclude that government has become obsolete and is doomed to be replaced by other institutions. Government has not, and will not, become obsolete. Like the state itself, the government is undergoing a profound transformation and has to reinvent its role, structure, and character. Government is, and will remain, central to society. An efficient, effective, and democratic government, as was pointed out earlier, is the best guarantor of social justice and an orderly society. Significant strides have been made in the ‘reinvention’ of government; and the various innovations and reforms have done much to make governments more effective. The discussion about the ‘reinvention’ or the re-conceptualization of government is about better and more effective governance of society. It is not about its replacement by the market or the civil society.
We have seen that the aspiration for democratic government is almost universal. The expectations of the citizens have changed and they want a government that is responsive to their needs and wishes. An awakened and empowered citizenry considers the business of governance too important to be left entirely to the government. They are no longer content to be passive onlookers or to hibernate between elections. Nor are they merely content to let the state or the government do things for them; rather, they want government to enable them to do the things they want. Free and easy flow of information means that citizens no longer depend on the government as a source of information – censorship, the most potent instrument of tyrants, is obsolete – and the growth of an informed public has increased the pressures on governments to be more accountable and transparent.
The obituaries of the government are premature. It is naïve to think that government can be supplanted by the market or the civil society; but, this does not deny the fact that many of the functions historically performed by the government cannot be transferred to the market. Markets may be better at delivering services and catering to the citizens as clients. Moreover, in a competitive environment the market can be both cheaper and more effective than the government in providing certain types of services. But markets operate for profit, and must be regulated to decrease excesses.
Markets invariably produce winners and losers, and the market has no responsibility for those who lose. Governments, on the other hand, have broad responsibility towards their citizens. Unlike the market, they cannot ignore the weak, the vulnerable, the unemployed, the sick, and the destitute. They have a responsibility towards all of them as the guarantor of social justice. We have already noted that innovations in public management are changing the way in which government work; but it is important to emphasize that reinvention of government is a means to an end and not an end in itself. The end is its role as the guarantor of social justice13. It is also clear that if the government is to regain popular trust then it must not only become smarter, flexible, and more innovative but it must also proactively advance social justice. The focus of government and reinvention must put social justice at the heart of the discourse on governance. The ‘crisis of governance’ is real and just tinkering on the edges will not suffice.
A large part of the impetus for the new public management or governance has come from developed countries with mature democracies. In these societies it takes for granted the existence of strong and established democratic institutions and the rule of law. And because the debate has been mainly focused on efficiency, on the reduction of the cost of governance, and more generally to whittle down the role of the government, not enough attention has been paid to the question of social justice. More over the zeal for the pursuit of efficiency through adoption of market practices appears to have become an end in itself and has obscured the very purpose of good governance and the centrality of the role of the government as the guarantor of social justice. While the case for democratic governance has already been made, there is no denying that there is a large gap between the ideal and the reality.
In the last quarter of a century we have moved away from the concept of government to governance. In the new governance paradigm, and in large part reflecting the changed circumstances resulting from economic liberalization, technological advances, and the rise of market ideology, the governments are moving away from being operational agencies to regulatory authorities. This has indeed made governments nimble, cost effective and responsive. Governments now recognize that the appropriate role of the state is to regulate, facilitate and create an enabling environment that fosters development but does not stifle initiative or enterprise, leaving citizens the room to manage and shape their own communities. There is no doubt that the new mode of governance has helped to cut the cost of government, made governments more citizen friendly, harnessed technology to bring the government to the doors of the citizens, improved the quality and delivery of service. The new governance arrangements have also done much to make ‘government’ more efficient and cost effective. But efficiency in itself is not enough to legitimize the role and authority of the government; and nor does it adequately address the concerns of those who remain outside the domain of the market.
Our experience with economic liberalization and the shift to market economy shows that it has brought little cheer to the poor. Not only does a third of the world’s population live below the poverty line but more importantly, in the absence of any political entitlement they have not benefited from the growing affluence of the society. From the perspective of the poor, reliance on the market has led to distorted development and further impoverishment. However, the inability of government to tackle poverty is not due to any inherent defect of democracy but rather it is due to the weaknesses of political institutions and processes which have largely excluded the poor and vulnerable groups. The poor are poor because they are not empowered enough to establish their entitlements. Our evidence suggests that even democratic governments are constrained by the powerful elite and interest groups.
Government works within a broadly based consensus which is negotiated through complex bargaining amongst numerous stakeholders and powerful interest groups who have strong vested interests in preserving the status quo. There is therefore a limit to the ability of the government to persuade the groups that stand to benefit from the status quo to voluntarily give up their privileged position in the name of fair play or social justice. The entrenched group will resist any attempts by the government to alter the existing power structure. On the other hand the poor are largely unorganized and cannot be mobilized easily despite their large numbers. In the abridged version, democracy is reduced to the right of electoral participation periodically; and for the rest of the time the citizens have come to be seen as bystanders in the game of politics. The government faced with the conflicting demands of the articulate sections and the voiceless poor has often sought safety by siding with the powerful. From the perspective of the poor the combination of the failure of the government and the market has led to distorted development in which the rich have become richer and the poor poorer.
Markets operate for profit and are seldom benign; and we have also seen that even democratic governments are hamstrung by the constraints of powerful elite and interest groups. The vulnerable groups are unlikely to share in the rising prosperity of India if they are simply left to the mercy of the market. It is clear from the above discussion that neither the government nor the market left to their own devices is able to serve the needs of the poor fully. But unlike the market, the government cannot ignore its citizens just because they are poor. The poor, to be able to enforce their political and economic entitlement have to be empowered. This calls for mobilization, community organization, advocacy and training and building human capacity. The government cannot abdicate its responsibilities to the market; and if India is to keep its tryst with destiny, it must make its democratic institutions work for the poor as it has done for the others.
Blair House Papers, National Performance Review, 1997
Osborne, Peter. “Who inspired Thatcher’s most damaging remark? Tony Blair’s favourite guru” The Spectator, August 24, 2002.
Anuradha Mittal, Adjusting America, Unpublished Typescript
“Rich Man Poor Man”, Lead Article in the Economist, January 20,2007
Foreign Affairs (July/August 2006)
The figures are taken from the Government of India, Planning Commission, Towards Faster and More Inlcusive Growth. An Approach to the 11th Five Year Plan (June 14, 2006)
Pankaj Mishra, “The Myth of New India” in the The New York Times, July 26, 2006
Towards Faster and More Inclusive Growth.
Atul Kohli, Democracy and Dissent: India’s Growing Crisis of Governability (Cambridge University Press, Cambridge, 1990)
Myron Weiner, The Indian Paradox. Essays in Indian Politics (Sage, New Delhi, 1989)
Subrata Mitra, Power, Protest and Participation: Local Elites and the Plitics of Development in India (Routledge, London, 1992).
Amartya Sen, Poverty and Famines. An Essay on Entitlement and Deprivation (Clarendon Press, Oxford, 1981)
Towards Faster and More Inclusive Growth.