Right and wrong4 min read . Updated: 03 Jul 2011, 08:33 PM IST
Right and wrong
Development economics is a fuzzy field of economics. Approaches range from the fully theoretical to the almost completely anecdotal. An empirical method, popularized by the Abdul Latif Jameel Poverty Action Labs of the Massachusetts Institute of Technology, is in vogue today. In India, the father of this field of study was Prasanta Chandra Mahalanobis, a brilliant statistician, who contributed the Mahalonobis two sector model to India’s second Five-year Plan in 1955. That approach, a variant of a Soviet economic model, emphasized the importance of physical capital in eventually building up domestic consumption. Over the decades since then, India has meandered in its economic development focus with an emphasis on “schemes" to alleviate poverty. With its back to the wall in the balance of payments crisis of 1991, it opened the economy to domestic competition and with open borders. That approach, which lasted for a little over 10 years and is credited with India’s strong economic growth, has gradually given way to a rights-based approach.
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A rights-based approach uses a social science framework of development, which, at its root, argues for a minimum threshold level of food, clothing, shelter, health, education, employment, gender equality and so on. The argument goes that the promulgation of these rights empowers targeted citizens (the owners of the rights) and establishes accountability with government (duty bearer) for delivering these rights. This approach gained currency around the world especially with the declaration of the United Nations (UN) Millennium Development Goals at the turn of the century and the subsequent desire to mainstream human rights in all the work of the UN.
The apostle of the rights-based approach in India is the National Advisory Council (NAC). The vision statement of NAC reads: “NAC has been set up as an interface with civil society. NAC would provide policy and legislative inputs to government with special focus on social policy and the rights of disadvantaged groups." NAC was constituted shortly after the United Progressive Alliance (UPA) came to power in 2004. The Mahatma Gandhi National Rural Employment Guarantee Act, the National Rural Health Mission, the Right to Education and the National Livelihood Mission are examples of schemes implemented by the UPA government that attempt to deliver on rights. Draft Bills on food security, land acquisition and on communal violence are in the works.
Is a rights-based approach right for India’s development? Did the electorate vote for a change of development model? Is there a difference between rights and entitlements? How do we gauge the cost of entitlements? How do we guarantee delivery of the promised rights? Many questions arise about the stealthy change in development approach that India seems to have adopted.
A rights-based approach is the wrong development model for India. At the very least, it is premature and incomplete. Today, India has neither the money nor the capability to deliver on promises made to its citizens. Rather than fix the problems with delivering on existing promises, we are stacking up new ones. While a lot of energy goes in designing new rights, little is being done to ensure that delivery is guaranteed. All the schemes proposed for delivery are launched with great fanfare. None come with expiry dates.
India should concern itself with increasing the size of the pie and allowing free access and opportunity to all on the path to the pie. Of course, that is easier said than done. But legislating that pieces of the pie will be cut out to feed the newly granted rights holders, disincentivizes the rest and makes addicts out of those who receive the entitlements. If rights represent a “contract" between the Union and its citizens then it cannot be distinguished from an entitlement. And entitlements cost money. The prevailing philosophy of paternalistic intervention is better replaced with the principle of open competition, where citizens are provided with choice and where the duty bearers enforce fair play. The inability of government to ensure fair play is often used as justification for intervention. There is a good reason that India enshrines (only) six rights as fundamental in her constitution. These are universal and basic to any free country. These fundamental rights are not linked to any particular scheme for delivery. They are integral to every aspect of the way we are expected to behave.
India runs three major deficits—a fiscal deficit, a current account deficit and an implementation deficit. When a country is in trouble with these three deficits at the same time, it is better to work within its limitations and not add to its burden. The corporate and consumer sectors are net savers and the government a net dis-saver. Why not enable the corporate and consumer sectors to make the investments?
PS: “Rights that do not flow from duty well performed are not worth having," said Mahatma Gandhi.
Narayan Ramachandran is an investor and entrepreneur based in Bangalore. He writes on the interaction between society, government and markets. Comments are welcome at email@example.com