P olitics Trumps Economics is not a sledgehammer of book, which is what the title or the overview makes it out to be. Bimal Jalan, one of the editors of the volume, says that the book is on “ever-present politics”, or rather chaotic coalition politics, coming in the way of India’s economic potential.
But to be fair to the 12 eminent contributors (most of them economists), they do not reduce the publication to a ‘blame it on politics’ theme song – echoed by market makers and business show anchors during the UPA-II days. Their papers are generally nuanced and comprehensive, but with only the odd flashes of insight and inspiration.
The book is mercifully not on ‘policy paralysis’ -- the perceived inability of the last government to rustle up a set of incentives for investors to spur growth. The book rightly brushes it aside as a distraction and grapples with a larger problem -- the generalised and decades-old failure of the government to deliver basic services to the people. The topic is great, but at the end of the book one is left none the wiser on why implementation is such a disaster in India.
Like Humpty Dumpty in Alice in Wonderland , who said “when I use a word, it means just what I choose it to mean” politics seems to assume different meanings in the book. If Jalan sees politics as subterfuge enacted in the corridors of government and Parliament, Dipankar Gupta describes it as the protest of the ‘citizen’ against a non-performing state.
The first is anti-democratic, whereas the second embodies the spirit of Arab Spring. Their economic impact would widely differ, the latter leaving the masses better off.
What is the ‘economics’ the book talks about? If it is about delivery of basic services to the masses, it has got to be more about ‘inclusion’ than ‘growth’. Yet, some of the contributors vacillate between inclusion and growth concerns, a conceptual confusion that is evident in Jalan’s overview.
Jalan draws upon his experience as a Rajya Sabha member to explain how a fractured mandate can lead to a hijacking of agendas in Parliament. But a moment’s reflection would tell us that government functioning took a turn for the worse in the Indira Gandhi years, when the Congress enjoyed even bigger majorities than this government.
So, is he talking about inclusion or growth? It is possible that a cohesive government such as the present one works efficiently in the interest of investors and boosts growth, without, however, improving the delivery of basic services for the masses. The book misses out on an interesting question: With policy orientation being the same, is a coalition government worse than a majority one for achieving growth and inclusion? Or is it better for inclusion and worse for growth?
The book also succumbs to a major failing of our times – of not locating the problems of governance in a social, political and historical context. ‘Governance’ these days has been reduced to an anodyne management concept, outside of space or time -- and this book is no exception. Ashima Goyal falls back on flow charts to explain how the Indian state works.
Caste and community Meghnad Desai is an exception in that he celebrates the loosening of caste hierarchies in north India and argues that it has made the governments more responsive to those at the bottom of the social ladder.
Here, it would have been useful to have a contribution on south India’s experience. Having been through social movements that dismantled the upper castes’ hold on political power much earlier, its governments have done a better job of delivering social services to the poor.
Mandalisation, in other words, has improved equity, if not efficiency. The book completely overlooks regional disparities in delivery of basic services. Therefore, the ‘why’ of mal-administration remains unanswered.
However, Dipankar Gupta’s article on the impact of social pressures on the state is interesting.
He says that the influence of earlier specific interest groups, representing castes, religion and white collar workers, is generally on the decline, with broad-based citizen concerns taking their place. He traces the rise of the Aam Aadmi Party and the Anna Hazare movement to the collapse of caste and community into citizenry. Gupta attributes this to rapid urbanisation and migration.
But Gupta seems to be stretching the point. What we may see is a curious ebb and flow between citizen-led political mobilisations and community-based ones.
And, while every citizen experiences a common angst in dealing with the sarkar , for which ‘corruption’ has become the shared metaphor, the experience varies depending on one’s social station. Therefore, specific interest groups will continue to be important, and the citizen’s concerns may not always work as a rallying point. This also means that both individual and interest-group pressures, and not either of them, will shape governance outcomes.
Samuel Paul’s paper on corruption does not go into these dialectics. ‘Civil society’, that other bland, static term, is expected to knock processes of governance into shape, with the help of tools such as RTI. Like Goyal, he views governance as an abstract category. But, both society (civil or otherwise) and the state are rapidly changing, and this will impact governance in unforeseen ways.
Pulapre Balakrishnan’s article is among the best in the book. He sees the absence of inclusion as both a policy and implementation failure. Planners failed to realise the importance of boosting agriculture productivity and domestic markets as the twin pillars of inclusion, and instead focused on welfare schemes.
Higher agriculture productivity will reduce prices and release demand for manufactured goods. A governance failure on education has impacted agriculture and botched up the transition from farm to industry for a number of farmhands. But Balakrishnan does not delve into why governance is poor and how it can be improved.
The book carries useful papers by T T Ram Mohan, Sunil Mani, Govinda Rao and Deepak Mohanty on their respective domain areas: Corporate governance, innovation, fiscal consolidation and financial stability. But by and large, the why of poor implementation remains unanswered.
That’s not surprising. It is more a question for political scientists and sociologists than present-day economists in love with their Excel sheets. Nevertheless, the book is a welcome addition to the literature.