The economic angle to TMC’s win in Bengal

The assembly election results in West Bengal came as a surprise to many. Political pundits and commentators have attributed the landslide victory of the incumbent government to a wide range of factors — social, political, etc. But very few have looked at the victory from the lens of economic theory.

According to recent RBI data, the share of West Bengal in the country’s GDP has fallen from 6 per cent to 5.3 per cent between 2011-2019, the growth in the State’s tax revenue collection has also dropped — from 18 per cent in 2010 to 11 per cent in 2018 — and in terms of the unemployment rate, West Bengal is amongst the 10 worst performers.

The State has also failed to secure a place among the top 10 in the ‘Ease of Doing Business’ ranking and it is one of the lowest recipients of FDI. Surprisingly, all these economic indicators did not matter at all in the recently concluded assembly election. What explains this?

A new concept from the New Institutional Economics (NIE) literature may offer some insights. The notion of composite efficiency, which means the overall efficiency of an organisation should be measured not only by production efficiency but also by weighing the distributional efficiency of that organisation. For example, while comparing capitalist and cooperative enterprises it has been shown that cooperatives are existing not because of production efficiency but rather owing to distributional efficiency.

Economic efficiency

This argument can be easily extended from economic organisations to political parties. The economic efficiency of a political party in power can be conceptualised from the economic indicators of the State such as job creation, GDP growth, tax collection, etc.

On the other hand, the distributional efficiency can be gauged from social and developmental indicators like the performance of the State in terms of education, health, welfare policies, social security nets, etc.

Though in terms of production efficiency, the Trinamool Congress (TMC) led government suffered major setbacks, yet it performed exceedingly well in terms of distributional efficiency — better delivery of schemes for the poor, which influenced the overall composite efficiency, has played a critical role in this process.

Failures in implementing different pro-poor welfare schemes have always been a common issue for any government. There is a slip between the cup and lip when it comes to drafting a well-intended welfare scheme and then implementing the same. This institutional failure is attributed to factors like asymmetric information, bureaucratic red tape, corruption, lack of agency of the poor, etc.

But the TMC government in West Bengal has addressed this issue of implementation with efficacy. For instance, the new flagship programme, ‘Duare Sarkar’, which literally translates to ‘government at your doorstep’, has helped people receive benefits in days that otherwise took months to obtain. The importance of this cannot be undermined, especially for the poor in a State like West Bengal.

Our empirical findings suggest that the successful implementation of this programme proved to be a master-stroke. Under this targeted programme, the TMC has catered to all districts of the State with 11 different schemes and has tried to reach out to maximum number of people. The timing is also crucial since on the eve of the election, it reportedly benefited 1.95 crore people.

The graph depicts a positive association between district-wise share of beneficiaries from the ‘Duare Sarkar’ programme and vote-share margin in favour of the TMC. The size of the bubbles in the graph signifies seat share of the TMC and it also conforms to this trend. The programme is just an example of how distributional efficiency has helped garner the support of the electorate.

Other political parties, seemingly satiated with mere announcements of public schemes before election, need to pay attention to the very fundamental issue of distributional efficiency through better doorstep delivery. Reaching out to the public with efficient distribution of schemes gave the TMC the necessary margin and edge over the others.

Bhowmik is on the Economics faculty of Ramakrishna Mission Vidyamandira, Kolkata, and Paramanik is on Economics and Finance faculty of IIT Patna

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