It is ideas,interests and institutions that shape policy choices
What accounts for the policy choices a government does,or does not,make? In particular,what may explain the spurt of economic policy reform that unshackled the Indian economy starting in 1991 and the fact that reform has been,by and large,conspicuous by its absence since 2004? And why do Indian politicians of all stripes today seem complacent in the face of a plunging growth rate?
Recently,in these pages,Adam Roberts (Generation exit,April 18) has proposed the novel explanation that the ageing character of Indian political leadership may account for these policy failings. He writes: The chance to eradicate poverty in a generation is being thrown away,as growth is allowed to slide. A younger leader of any party who felt more closely connected to the tens of millions of Indians without jobs,might feel more pressure to do something quickly about this.
But how plausible is this explanation? It suggests that a political leaders age has something uniquely important to say about the policies she may pursue. Yet,appealing though it sounds,there is scant evidence in support of this hypothesis. Rather,there are perfectly plausible conventional explanations that help us explain the facts.
In particular,political economy theory points to the constellation of the three Is to help explain policy formation. These are: ideas,interests and institutions.
The first I refers to the ideological framework or,if you prefer,cognitive map of the political leader or party in question. Thus,for instance,a party ideologically committed to small government and free markets is,other things equal,more likely to pursue economic reform than one committed to socialism and redistribution.
This explanation fits the experience of India in the early years after Independence. With its overwhelming domination of the polity,the Congress party could,arguably,have pursued the economic model of its choice. Yet,the socialist leanings of Prime Minister Jawaharlal Nehru decisively shaped Indias turn toward Central planning and away from a market-oriented system,the consequences of which we are still living with. Whether you agreed with him or not,Nehru was an idea politician who chose a state-led economic model for India because he fervently believed in it himself,quite apart from the political benefits or costs to himself or his party.
The second I refers to the self-interested calculation of their own interests that a leader or party will engage in,and the impact this will have on their chosen policies. Thus,as an example,a party whose votes come from the working classes and which receives money from trade unions will,other things equal,be likely to pursue policies that favour the interests of labour.
The Congress Party,after PM Indira Gandhi broke up the party,is a perfect illustration of the potency of self-interest in the determination of government policy. Pitching herself as the champion of the poor,downtrodden and marginalised,Indira Gandhi succeeded in sweeping to power by winning votes handsomely among the rural poor and minority groups,and repaid her constituency by further socialising the economy and widening the scope of redistribution.
Yet,few would suggest this turn in the partys policies even further to the left than Nehru reflected ideological zeal on her part. Rather,it was Machiavellian power politics at its most brilliant,reflecting the primacy of interest or what we in India loosely call vote-bank politics.
The third I refers to the political and other institutions through which political activity and decision-making are filtered. Thus,for instance,policies will be formulated differently in a presidential system as compared to a parliamentary system. Even among parliamentary governments,Westminster systems,with first past the post elections in individual constituencies,will generate different outcomes than European-style proportional representation systems where parliamentarians are picked from party lists.
The importance of our inherited political institutions is self-evident in the lead-up to next years general elections. As much as the media,or perhaps even the public,would like the contest to be a Rahul Gandhi vs Narendra Modi presidential battle royale,the reality will be that whichever political grouping manages to stitch together a viable coalition before and crucially,after the elections will end up in power,irrespective of the individual nominally at the helm during the campaign. A Westminster system simply will not give you the fireworks of Barack Obama vs Mitt Romney,as in last years election campaign in the US.
In reality,of course,different combinations of the three Is,along with other factors,will help determine the choices politicians make. The opening up of the Indian economy after 1991,as has been observed by many,occurred in an ambience of crisis and at the point of a gun.
Yet,the subsequent pursuit of policies that ended the worst excesses of the licence raj and ushered in an era of rapid economic growth represented at least some measure of conviction by P.V. Narasimha Rao and most notably,Atal Bihari Vajpayee and the BJP-led NDA government,who accelerated reforms during their time in office.
On the other side,the stalling or outright abandonment of reform under the Congress-led UPA since 2004 reflects as much an opportunistic calculation of where the votes do and do not lie as it does an underlying lack of faith in markets and clinging to the old socialist ideology of the partys earlier incarnations.
Likewise,the complacency of all major political parties in the face of the ongoing growth debacle may well be explained by the sheer political calculus that hand-wringing about the poor state of the economy in advance of the elections is unlikely to be a major vote-getter,mixed in with an underlying suspicion that halfway complete economic reform has brought us mostly crony capitalism,rather than a genuinely thriving market economy.
So whats age got to do with it? Not much,if anything. Rahul Gandhis youth hasnt led him to profess ideas or policies markedly different from the elderly leadership of his party. Nor could one plausibly argue that Manmohan Singhs advancing years account for his failures as an economic reformer. After all,neither Rao nor Vajpayee were spring chickens when they jump-started Indias economic rise.
In politics,age is,after all,a number. It is ideas,interests and institutions that reign supreme.
The writer is an economics professor at Carleton University in Ottawa,Canada and co-author of Indianomix: Making Sense of Modern India