Tuesday, March 03, 2015
  Search 
Home
Opportunities
Partners
Publications
About Us
 
 
Please enter your email here, we would like to keep you informed.
 
 
Connect With Us - Facebook RSS
<March 2015>
SuMoTuWeThFrSa
1234567
891011121314
15161718192021
22232425262728
293031
Sections
Liberty In The News
Liberty Events
Conference Proceedings
Culture
Agriculture
Democracy
Development is the Key
Economic Freedom
Education for Life
Enterpreneurship
Environment
Freedom of Expression
Freedom to Trade
Globalization for the Good
Health is Wealth
Intellectual Property Rights
International Relations
Liberty is Security
Limited Government
Principles of Politics
Privatisation
Population - the ultimate resource
Property Rights
Regulatory Affairs
Rule of Law
Tax Freedom
Facts & Figures
Opportunities
Competitions
 Principles of Politics
 
More makes for merrier in politics
Mint
India
Tuesday, March 06, 2012

Barun Mitra

Intensely competitive coalitions have made politicians aware of the importance of growth for their survival, writes Barun Mitra in the Mint.

Indians across seven states are going to polls in 2012. This time developmental issues are firmly on the political agenda. Yet, this was not always the case. India, many believed, was paying a “democracy tax”, that political pluralism was at the cost of economic well-being.

Are the elections of 2012 turning out to be a watershed? Could the intense political rivalries among various political parties create an environment conducive for economic development?

While India earned its political freedom in 1947, many believe that 1991 marked the beginning of the journey for economic freedom.

The balance of payment crisis did provide the impetus for the economic reforms undertaken in 1991. But what has not really been understood is the political context of the economic changes. The increased political competition can be seen from the fact that no political party has been able to win a clear majority in the Lok Sabha since 1989.

Conventional wisdom has it that coalition dharma will hinder economic progress. In reality, one could argue that increased political competition has, for the first time, made many leaders and parties aware of the political need to perform, improve governance and the economy. Otherwise, they would have to bear the wrath of the electorate.

While India was politically stable in the first 40 years, except for the 1975-1979 period, the economy stagnated at the so-called “Hindu rate of growth”. But as coalition politics became the norm after 1989, the economy began to pick up.

As political competition increased, both at the state and national level, the growth picked up even more after 2000. The accompanying graph shows this clearly: in the first five general elections, the incumbents returned to power while growth remained lackadaisical. In contrast, in the last six elections, incumbents have lost regularly even as growth has assumed an upward trajectory. If anything, the country’s electoral history can be seen clearly through this lens.

Please See | Growth And Electoral Politics In India (PDF)

It would seem that the economic context in India is changing, quite irrespective of any particular political outcome in the elections.

The graph plots political outcome against its economic growth rate. The annual growth rate is calculated on the basis of 1993-94 prices on the Y axis. And political path is measured not by the victory or defeat of any party or coalition, but whether the ruling combination is re-elected (+1) or defeated (-1), on the second Y axis on the right. Given prevalent coalition politics, two other categories are also used to depict electoral changes. If the ruling coalition is re-elected broadly with the same features, it is given +0.5, and if it is defeated, -0.5.

The Congress lost power in 1977 to the umbrella coalition that made up the Janata Party in the aftermath of the excesses committed during the emergency rule of the previous two years in which elections and civil liberties were suspended.

The leaders of the Janata Party, in their zeal to defeat the Congress, attempted to prove to the people that they were the true socialists, and the Congress was only a pretender.

By the end of the 1970s, the economy had tanked and showed that economic reality does not respect political ideology. While it is true that man does not live by bread alone, it is even truer that he cannot live by ideology alone. 

The new Congress administration seemed to have learnt at least one lesson—that the economy needed more attention than politics.

Political fragmentation in the 1980s and 1990s was characterized by identity politics. With every party trying to consolidate its own social base, none was in a position to ensure victory based on any narrow identity, particularly at the national level.

Political pundits coined the term “anti-incumbency” to reflect the popular mood to bring about political change through the ballot. The alternatives did not necessarily perform any better, but the desire for change was almost irresistible.

In 1991, politics was in turmoil and the economy was facing its most serious crisis. The prevailing wisdom is that the economic crisis necessitated the reforms adopted by prime minister Narasimha Rao and finance minister Manmohan Singh.

While the 1990s was politically tumultuous, by the end of the decade it became clear that identity politics had run its course. This allowed for a degree of political consolidation.

As the credibility of political alternatives on offer increased, the agenda slowly shifted towards developmental issues as most major political parties realized that mere rhetoric would be insufficient to gain or hold power. It was during this phase that bijli, sadak, paani entered the political lexicon.

In 2012, there are no big emotive issues to colour these elections and all the major contestants are focusing on development.

With greater political competition, the need for economic policy that works becomes critical for retaining credibility with the voters. So it appears that this competition has created the condition for economic reforms that in turn encouraged competition and improved economic growth. This is clearly a key part of the political narrative in India since the 1990s, as illustrated by the upturn in the trend line in the graph.

Economic competition has been good for Indian consumers. Six decades after independence, perhaps the time has come to reap the economic dividend from a truly competitive political democracy.

Increasing political competition has opened new opportunities for the voters not only to demand performance, but drive economic changes as their aspirations rise. This is forcing politicians to explore new ideas that might meet these demands.

This article was published in the Mint
on Tuesday, March 06, 2012. Please read the original article here.
Author : Mr Barun Mitra is the director of Liberty Institute, an independent public policy think tank in New Delhi.
Tags- Find more articles on - democratic dividend | economic growth | Indian democracy | Indian election | Indian politics | political competition | political economy

Post your Comments on this Article

Name  
Email    
Comment  
Comments will be moderated

RELATED ARTICLES
Diminishing electoral dividend for the political dynasties
The rise and decline of regional parties in the North East
Is Democracy about Majority Rule?
Nagaland Assembly Election 2013: Post Election Analysis
Tripura Assembly Election 2013: Post Election Analysis
Meghalaya Assembly Election 2013: Post Election Analysis
Indian Budget 2013 One step forward, One step backward
India's Democratic Dividend: Lessons from UP Election
Democratic Dividend: Economic benefit from political competition
Can one buy an election?
More Related Articles
Principles of Politics
Role of Businessmen Takes Center Stage in the US Presidential Race Ads
Cheer-up, America! The Case for American Optimism
Gandhism redux? Wanna be Gandhis and the original Gandhi
Political Poribartan in West Bengal: A blueprint for ushering in real change
India’s own politics of denial
Please don't be silent, Prime Minister
Prospect of liberal politics in India today
More Articles

Liberty Initiatives
   Save the Tiger Initiative
   Protecting Property Right
   Challenging Climate
   Wealth to Health
   Asia Fighting Malaria
   Miracle of Democracy
   Ayn Rand in India
   Empowering India: Making Democracy MeaningfulRight to Property - Implementing the Forest Rights Act" style="color: #990033; text-decoration: none;">20-22 July: Shanghai Austrian Economics Summit
 
  9th International Conference: Property Rights, Economics and Environment, June 20-23, Aix-en-Provence
  Alternate Solutions Insitutte
  Atlas Economic Research Foundation
 
  Freedom to Trade
  Friedrich Naumann Stiftung - Für Die Freiheit.
  India FNF Alumni Network
  Initiative for Public Policy Analysis
  Inter Region Economic Network (IREN)
  International Policy Network
  Liberty New Central
  Minimal Government Thinkers, Inc.
  The Adventures of Jonathan Gullible: A Free Market Odyssey
 
An Initiative of
LIBERTY INSTITUTE, INDIA
All rights reserved.