governance, political economy, institutional development and economic regulation

Posts tagged ‘Gender’

Liberals; smell the coffee please

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(photo credit: http://www.thehindu.com)

Liberals and human rights advocates are a queasy bunch with no stomach to face up to the honest truth that effective governance implies a better informed and more intrusive government.

Light handed regulation” is the mantra of neo-liberal economics. But such regulation fails unless the regulator can monitor compliance with the rule of law by acquiring more and better, real time data on individuals and business entities.

Take the simple case of ensuring that shop workers are not exploited by owners and get at least one weekly holiday and enjoy restricted, daily, working hours. The “heavy handed” manner this is done is by shutting entire markets down on a specific day and prescribing shop opening and closing hours. The “light handed regulation” option could give shop keepers the liberty to set their own working hours. But to protect workers’ rights, effectively, it would need to generate a real time centrally networked, database of cash transactions- to validate shop working hours and a bio-metric clock- doing the same for employees working hours.  How does this square with the Liberal preference for “small government”?

Consider the case of self-assessment by tax payers. Regulation cannot get lighter than that. But to be effective, it has to be coupled with predictable and significant sanctions against deviant behavior. This means generating a database, on each tax payer, comprising an effective audit trail of all financial transactions and a tax agent randomly trawling this data, using “red flags”, so that deviance can be detected and brought to trial.

Tracking phone call, social media, emails and physical movement of individuals all becomes part of “Big data” which needs to be captured to provide the information required for credible sanctions systems. This is especially necessary, in democracies like India, where all sanctions are appealable and hence must be backed by “judicial quality evidence”.

“Big data” does have unintended but positive outcomes. The clamour, amongst the elite,  for the status symbol of publicly provided, security guards can be greatly reduced, if “security” comes with a GPS enabled, real time, tracking of location and real time reporting, via a smart phone app, of whom the VIP is meeting as a routine procedure.

No Liberal would object to the installation of CCTV cameras where they live, to protect their lives and property. But this comes with the potential downside of intrusive government. Taking cameras closer to people generates “Big data”. Its value lies in the ability to constantly trawl it to prevent crime (or even natural disasters), by identifying “hot spots” and patterns of criminal behavior and to bring criminals to book. Constraints on individual privacy are inevitable. Also there is bound to be misuse, despite checks to prevent gaming; for example the illegal use of individual information, acquired for security purposes, to black mail individuals. There will always be “insiders”, who could trade off any inherent inefficiency in keeping “big data” secure.

Is Edward Snowden a traitor or an American hero? His country folk were divided on the fine point of the “tipping point” between an “insiders” duty to guard official secrets versus the citizens moral responsibility to fight “Big Government”. There is a stark choice between ensuring security and preserving individual freedom. Too much individual freedom (say the right to religious beliefs which may even bar or restrict social integration, as is available in India and the US) can be as negative as too little individual freedom (China, Russia) in the name of national security.

But the flash points where security collides with individual freedom are more often due to “entrenched privilege” being threatened, than the high ground of morality being squashed.  Indian Liberals, who willingly submit to racial profiling and body searches at US and UK immigration, are outraged if an Indian security personnel, so much as dares to question them about what they are carrying in their bags, whilst boarding domestic flights, trains or buses.

Of course most Liberals in India belong to the elite. For them the State and its officials are only to be suffered, not recognised. There is an implicit sense of “entitlement” amongst the elite, who expect to be “served”, even if they dodge their taxes. Much of this springs from the unfortunate spectacle, of fawning subordinates around a preening public official, in much the same manner, as courtiers may have supplicated before our erstwhile Maharajas.

Liberals mourn that there is too little reliance on “trust” and too much emphasis on “surveillance”. But isn’t it ironic, that in the US: the birth place of Liberal policy practices and “small government”, it is “legally enforceable contracts”, which are the life blood of social and even personal interaction. A society governed by “contracts” by definition, is a society which does trust anyone, including the State, to do the right thing.

It is the same with the theory of incentives. The fundamental basis of neo-liberal policy practice is to embed the correct “incentives” in regulations, which then elicit the desired behavioural outcomes associated with the desired results. The provision of artificially embedded incentives, as neo-Liberal policy practice seeks to provide, inevitably come with intrusive metrics of measurement because what is not measured can neither be sanctioned nor rewarded. Regulatory intrusion, big data and “big” government are the inevitable consequence.

In direct contrast, are systems which rely on “belief”, “religion” or “spirituality”. These seek to bind people to a higher morality and blind them to the needs of individuality. Communism is one such “belief” which relies on the morality of the State and not contracts. Of course, it also comes with high levels of State control and intrusive oversight by a bureaucracy of the faithful, exactly as any other religion.

The Liberal position becomes even more laughable when we consider the available “best practice” on poverty reduction; a key objective for developing economies. “Tightly targeted, cash transfers” to the poor is the latest mantra. But these have to be preceded by identification of the poor; close monitoring of their locations and current incomes. In fact, what this requires is a national database of the entire population of India so that we can segregate the poor from the non- poor; citizens from non-citizens and similarly along any other targeted classification (gender, caste, religion or spatial location). 25% of the Indian population is migratory. This requires “spatial location” enabled assessment of their current economic status since poverty levels vary across states. You can’t get bigger data than all these demographics on 1.25 billion people.

The loss of individual privacy is embedded in the logic of extensive digitization of information. Think of the benefits from being able to identify people uniquely; record their demographics (age, marital status, gender, health and education metrics) securely; store transactions securely and access the stored information instantly. If it is alright for the government to be intrusive versus the poor, why is it so horrible for the “privacy” of the rest to be invaded? The much touted right of the individual “to be forgotten” can exist versus other individuals (though how even that could be enforced is not known) but it must never exist against the State.

“Big data” and a better informed government are here to stay. Liberals should wake up and smell the coffee.

Myopic Urbanization

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Divisive economics is worse than divisive politics. Proponents of Urbanization are the loudest proponents of economic divisiveness. The vision they subscribe to is of shinning cities connected by corridors of gold, glittering like diamonds in a waste land of the rest of Bharat. Their justification is that the rest of the World has adopted this approach. But India constitutes 17% of the World’s population and around 33% of the World’s poor people. It is for us to define “good practice” in development, not to blindly follow international examples, which do not relate to the context of India.

A second “best” defense of “urbanization wallahs” is that it is “inevitable” so best to plan for it. The “inevitability” is related, yet again, to the manner in which growth has happened in the past and not to the specific prospects for India in the future. The fact that even by 2039 only 50% of the population is expected to be in “urban areas” is glossed over, whilst making the inevitability argument. In any case we must not succumb, further than we already have, to the “everything is written” syndrome. It is for Indians to write their own destiny.

Here are three reasons why a divisive focus on urbanization is retrogressive.

First, people tend to fall into the category the State creates for them. Caste, gender, religion are traditional fault lines created by “Authority” such as it was defined since ancient times. None of these provide any progressive social value today. The modern World identity of Urban versus Rural is as corrosive.

The needs of a shopkeeper in a village or a city are much the same; a serviceable road linked to the habitations of their bulk suppliers and customers; electricity for extended business hours, storage of perishable goods and medicines; security of life and property; a collection service to collect the trash generated by customers and sanitation facilities; customers with money in their pockets and a bank in which to safely put her money and access credit; telecommunication links to remain in contact with current events and clean water. Why would we want to discriminate in the standards of supply of these public goods between urban and rural areas? By creating “urban” and “rural” labels we are perversely creating a modern fault lines around which antagonistic interest groups start to coalesce. Please stop this. We have enough fault lines as it is. It doesn’t help when power elites benefit from the touting of urbanization.

Second, sustainable development is indivisible. You cannot steal from the future to make the present pleasant. You cannot fatten the urbanite at the expense of the rural poor. In our democratic society, you cannot cordon-off urban development from rural prosperity as China can and does. Urban centric development is self-corroding due to unlimited in-migration from rural areas in much the same way as international immigrants storm the national borders of developed countries, spawning land and migration mafias and vote banks. Cities and rural areas are organically linked as a sugar factory is linked to the cane fields; a steel factory to the iron ore mines and an electric power generating station to the coal mines, the water or solar, wind or marine energy harvesting area.

 Area based “indivisible” development optimizing on the comparative advantage of each development area has been a standard development tool. Why have we abandoned it? Let us instead abandon the decrepit slogans of the past and opt for integrated development which maximizes value generation using resources which are available locally whilst benefiting from India’s vast, common, domestic market and the liberalization of international trade. Innovation in India need not be limited to cities it has to be a fundamental credo of growth.

Third, the literature tells us cities benefit from the economics of agglomeration. That is why incomes are higher in cities and businesses happy to locate there. Population density is higher so it is cheaper to provide public services. Product markets are larger so scale economies kick in for suppliers and effective competition can pass on the benefits to consumers. Finally, the human element; traditional identities (religion, caste and gender) are replaced by modern identities in the anonymity of cities; professional human networks leverage human capacity and aspirations change. In a recent survey, two thirds of Lady Shri Ram College alumni (admittedly an elite Delhi college for women pulling in the best) viewed their professional identity as the primary one, even over gender.

All these are indeed the virtues of cities, but should they also not make the cities self-financed? Do they justify the subsidies provided by the State to keep cities alive and humming at quality-of-life standards far above rural areas? Collection of user charges even in metros is rarely more than 40% of the cost of providing services. Revenue collected by cities from their own sources (by taxing residents and from their real estate and other assets) only meets slightly more than 50% of their expenditure. The rest is grants from the Government of the related State or the Government of India. Development schemes which are off-budget for Cities but are directly funded by the Central Government, like the Jawaharlal Nehru Urban Renewal Mission further add to their kitty of goodies. A full accounting of the actual distribution of the government’s resources between urban and rural areas, including expenditure on education, health, science and technology, industry would further skew the allocation in favour of cities, where the elite reside. This resource allocation bias for cities is indefensible.

Relying on urbanization for economic growth is an end-of-the-pipe option, like a housewife resorting to RO filtration to drink clean water as against the State cleaning the rivers and other ground water sources. It is expensive and exclusionary.

Ignoring the human cost of migration from the villages to cities, in search for work, including the life cycle social costs of predominantly male migration, in large numbers, is scary.

Lastly, in the context of the recent democratic trend of targeted social disruption as an instrument of political power, cities are powder kegs waiting to be blown up. A “soft” State, like India, cannot cope with the unleashing of such violent and disruptive, social pressures.   

 

Hypocritical India

 

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Indians are affably argumentative (Amartya Sen, 2005). Less likably, the Indian State is intensely hypocritical. It remains very medieval despite its veneer of modernism.

Examples of medievalism abound. We value Indian lives very low. No minister has ever resigned because citizens, in their charge, starved to death or died due to lack of emergency medical aid or if large numbers of students fail to pass in public schools. Corruption is a leitmotif of even the simplest public transaction like lodging a First Information Report at a police station (this is something which should even be possible by email or sms or whatsapp); avoiding getting arrested for drunk driving; getting a copy of case records from the lower courts or seeking protection from physical harassment and assault.

The best illustration of lingering medievalism and nascent modernism is the conscious use of hypocrisy by the State, to keep alive the hope of change without disturbing the status quo. There are many such State hypocrisies but five major ones stand out.

The biggest hypocrisy is the Constitutional provision that religion does not matter for State policy formulation and execution. Everything points to a different truth. The Shah Bano episode (1986) is the best example of how religion and politics have been inseparable. In this case the Supreme Court granted maintenance to a divorced Muslim woman (as is the right of any Indian woman) but the government rescinded this progressive judgment through a perverse, new law to appease orthodox Muslim sentiment. Meanwhile, to placate orthodox Hindu sentiment, which was being fanned by the Vishwa Hindu Parishad (a Hindu rights outfit), it also opened the gates of the disputed site of the Babri Masjid which had been locked by the government since 1885 to preserve the status quo on counter claims to possession rights by Muslims and Hindus. Incidentally 1885 is also the year the Indian National Congress was founded. By 1986 (a century later) the Congress was not averse to play the communal card with an eye to the 1989 elections.

Other more visible “red flags” of regressive religious politics are the low pan-Indian representation of Muslims in government; the increasing ghettoization of Muslims even in new urban areas; blatantly pro-Muslim or Hindu political parties and decreasing levels of productive social interaction between the two major communities since 1947. Let’s face it. The religious cleavage exists in an antagonistic form and is increasing. It is only once we accept this that we can get to talk about how to bridge it.

The second big hypocrisy is that all Indians are created equal. Democracy and the positive affirmation (reservations) policy have solidified caste much more than the dilution effect from urbanization. If Pandit Nehru saw Sardar Patel as a biased Hindu he would be shocked at the manner in which political leaders today pander to narrow interests of backward caste and Dalit vote banks. After religion, caste is the next most significant political identity of Indians. The majority of Indians wed within their caste and vote for caste candidates. Indians are not born equal. They struggle to overcome the inherited, rigid social and economic barriers of caste and very few succeed, despite the Constitution and a range of laws prohibiting caste based biases.

The third big hypocrisy (which we share with much of the World) is that women are treated equal to men. They are not and never have been. The good news here is that since this is an international problem, the state of play is fairly advanced. Policy, law and programs are working to empower women economically in the hope that social change will follow; to measure their levels of satisfaction; to assess results and to provide special protection to them in the transition period.

The fourth big hypocrisy is that poverty is reducing at a satisfactory rate. This is far from true. Even worse, asserting this statistically, as the government does, lulls us into believing that following the current path and simply doing more of what we do already, will get us to a poverty free India. It cannot.

Average per capita income needs to triple in real terms and inequality to reduce significantly before we can even claim to have found the correct direction. Some measurable indicators are a consistent growth above 8% per year; a more equal sharing between the rich and 70% of the rest, of the benefits of incremental growth (we don’t monitor this periodically) and the rate of job creation in the formal economy.

The fifth hypocrisy is that the existing governance architecture of Parliamentary Democracy is suitable for India. It is not. Both Parliament and Cabinet have ceased to play their intended role as checks on personal aggrandizement and protecting minority interests. This has been true for State Governments over the last three decades but over the past decade even the GOI Cabinet has become the poodle of Party bosses. The sanctity and effectiveness of Parliament is eroded by the behavior of lumpen elements, more familiar with brute force than reasoned argument or moral persuasion. Corruption vitiates executive decision making to the extent that the judiciary becomes the aam admi’s “de-facto government” for seeking redress.

How can this familiar tale of woe be altered?

First what is not measured and recorded cannot be dealt with. Enumerate caste/tribe and religion in the census so we know the numbers; the spatial distribution and their wellbeing. Map caste and religion data on a publicly available GIS down to the village and urban ward level so that government interventions can be calibrated to local social norms and results assessed by third parties. Assess poverty levels bi-annually using mobile based rapid data collection instruments to better relate schemes (like the Right to Food or the Right to Work) to poverty reduction outcomes.

Second review the existing incentive structures for diluting religion, caste, gender inequality, poverty and improving the functioning of the executive, parliament and judiciary.

Caste based affirmative action (reservations) clearly perpetuates an “us versus them” psychology. Diluting it by adding poverty criterion, requires more data and monitoring, but can lead to the dominance of more modern pressure groups like professional affiliations (farmers, business owners, employees), locational interests (Biharis or Mumbaikars) or ideological solidarity (environmentalists, big or small government advocates, gay rights advocates).

All government programs and projects should be evaluated for their poverty reduction potential before approval by the government and income enhancement targets fixed. Achievement against targets must be monitored by third parties with the results made public. This will reduce pork (roads to nowhere) and gold plating (capital heavy projects which do nothing for jobs-why not let private business do these?).

The Constitution should be revised to completely separate the Executive from Parliament. The PM and her deputy to be directly elected with minimum vote shares prescribed in each constituency to ensure inclusion. The ministerial executive team to be nominated by the PM and endorsed by the Parliament. The internal emergency provisions should similarly require the endorsement of parliament to protect state government autonomy from an aggressive PM. The 2014 elections are being fought in any case on the basis of “US President like” identities.

This simple change can ensure that the PM is popularly elected and is not just a “shoo-in”. It can also  improve the quality of MPs by getting rid of those who contest for Parliament seats (often by paying for them) only as an avenue for eventually getting into lucrative executive positions. Legislative ability requires skills in law and social sciences apart from a feel for the local interests an MP represents. Executive ability requires specialization and narrow experience. The system must present separate choices to the electorate and to those desiring to enter politics.

The bottom line is to transit from being an affable but hypocritical India to a more results oriented and honest India. In the modern world time is money and the long route to poverty reduction whilst changing incrementally is costly. Social stability is a merit good in the Indian plural context. But the price for social stability must be paid by the rich and not the poor or the marginalized.   

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