Wednesday, Oct 01, 2014

Failed politics, winning economics

Pervasive petty corruption infuriates voters. Major scams since 2010 have ignited firestorms in the media. ( Source: AP ) Pervasive petty corruption infuriates voters. Major scams since 2010 have ignited firestorms in the media. ( Source: AP )
Written by James Manor | Posted: May 24, 2014 12:27 am | Updated: May 24, 2014 12:30 am

UPA could not hold on to these groups. Economic trends do not explain the election result.

And yet, still the economists chant their mantra. Some even simplify further by saying that election results follow economic growth rates. That is nonsense. Both the Congress in 1989 and the NDA in 2004 lost despite high growth rates.

They also overlook another trend. Growth may have decelerated, but government revenues have not. A marked surge in revenues has been underway since 2003 and it has persisted, despite the recent slowdown in growth. Revenues increased by over 20 per cent in the last fiscal year. This enables governments to spend generously on all sorts of programmes to cultivate popularity — among rich and poor, urbanites and rural dwellers. But despite this patent economic reality, the UPA lost.

That result is mainly explained by other things. Pervasive petty corruption infuriates voters. Major scams since 2010 have ignited firestorms in the media. Bureaucrats and politicians have been paralysed by fear ever since. An official in the prime minister’s office who jotted a question to a superior on a tiny post-it note in 2011 was hauled up and told to “put nothing on paper”.

More well-known failings could be cited. But the key point is that most of the things that explain the UPA’s demise have to do with politics, which the economic determinists largely disregard.

The writer is a professor in the School of Advanced Study, University of London

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