The recent incident near Delhi where a Muslim man was lynched to death on suspicion of eating and storing beef has once again underlined the lack of liberal values in our country.
It is likely that the mob that carried this vigilante action was confident of escaping punishment for its actions. After all, perpetrators of many communal riots have not been punished till date in the country.
Such facts stand in sharp contrast to the fact that India is among a handful of developing countries that has maintained its track record of having free and fair elections since Independence (barring a brief two-year period during the Emergency). So, what explains this irony?
A recent research paper by economists Sharun Mukand and Dani Rodrik of the University of Warwick and Harvard University, respectively, provides one possible answer to this question. Mukand and Rodrik distinguish between two kinds of democracies: electoral democracy and liberal democracy.
The difference is on account of three categories of rights: property rights to protect asset holders against expropriation of property, political rights to guarantee free and fair elections and policy sovereignty for those elected and civil rights to ensure equality before law and guarantee justice. Electoral democracies can guarantee the first two sets of rights, but only a liberal democracy would ensure that civil rights are honoured as well.
“The distinctive nature of liberal democracy is that it protects civil rights (equality before the law for minorities) in addition to the other two,” write Mukand and Rodrik. “Democratic transitions are typically the product of a settlement between the elite (who care mostly about property rights) and the majority (who care mostly about political rights). Such settlements rarely produce liberal democracy, as the minority has neither the resources nor the numbers to make a contribution at the bargaining table.”
Mukand and Rodrik argue that the chances of the emergence of a liberal democracy in a country depends on the nature of dominant cleavages in the social mobilization that ushered in democracy: whether it was class-based (elite versus non-elite) or identity-based (majority versus minority).
“In the West, the transition to democracy occurred as a consequence of industrialization at a time when the major division in society was the one between capitalists and workers,” they write. “In most developing nations, on the other hand, mass politics was the product of de-colonization and wars of national liberation, with identity cleavages as the main fault line. Our model suggests that the second kind of transition is particularly inimical to liberal democracy.”
Mukand and Rodrik point out that while the majority would like to have a transition to electoral democracy as it gives them control over policies such as taxation and provision of public goods, it might not always be interested in liberalism. This is because the majority stands to increase its gain by denying civil rights to the minority once it has captured political power through universal suffrage in an electoral democracy.
However, the authors acknowledge that ground realities might be more complicated than their binary assumptions of elite versus non-elite and majority versus minority divisions in a society.
Mukand and Rodrik’s research follows a growing body of work by institutional economists such as Douglass C. North whose work has sought to examine the institutional determinants of political and economic outcomes in a country. A 2011 research paper by North, John Joseph Wallis, Steven B. Webb and Barry R. Weingast at Washington University, University of Maryland, World Bank and Stanford University, respectively, might help in a better understanding of political processes in societies with multiple divisions.
North and his co-authors divide all countries into two categories: limited-access orders and open-access orders. Their argument is that with the exception of countries in the modern developed world, all countries could be put in the former category. Countries in the limited-access order category are further divided into fragile, basic and mature categories. Afghanistan would be a fragile case, Bangladesh a basic case, whereas India and China would qualify as mature limited-access orders. As is obvious from the examples, limited-access orders includes both democracies and non-democracies.
The difference between limited-access and open-access orders stems from the method applied to control violence which, according to the authors, is inextricably linked to the functioning of the economy and society. While limited-access orders offer rents of various kinds to rein in groups capable of unleashing violence, open-access orders use open access and competition to control it.
The former succeed because of a realization by stakeholders that violence would lead to a reduction in realization of rents and the latter succeed because of the state’s monopolization of violence.
The authors warn that any imposition of institutions successful in open-access orders in limited-access orders may prove counter-productive. Such acts can foster greater opportunities of rent-seeking within the new institutional set-up, undermining the process of institutionalization, or create enclaves of reformed institutions amid unchanged rent-seeking practices elsewhere. When development policy advice “threatens the logic of stability in limited access orders, these societies often resist or sabotage the recommended measures”, the authors argue.
These findings can help answer why Iraq plunged into chaos even after thousands of lives were maimed and sacrificed, and billions of dollars were spent on a war to remove the dictatorship of Saddam Hussein and bring democracy. The exogenous shock of the war disturbed the equilibrium that existed among forces capable of unleashing violence under Saddam’s regime.
The reason why open-access orders are able to maintain open access and competition, according to North and his co-authors, is because of Schumpeterian principles of creative destruction under capitalism. The question that arises then is what prevents similar processes in the rest of the world, despite the near-universalism of capitalism today? This was the promise indeed, when Francis Fukayama declared the “end of history” and victory for liberal democracy after the collapse of Soviet-style communism. Capitalism’s triumph was expected to not just guarantee civil and political rights but also economic well-being for all and eradication from poverty and under-development.
In their2005 bookEconomic Origins of Dictatorship and Democracy, Daron Acemoglu and James Robinson, economists at MIT and Harvard University, respectively, argue that the ability of democracy to transform society might not be what it had been in the past. Acemoglu and Robinson argue that the ability of elites to influence political parties, irrespective of their ideological nature, has remained intact. Elites are, therefore, effective in preventing policies that could harm their interests. Also, with globalization, the power of trade unions and of political parties sympathetic to such groups has declined, with fewer voices for lower classes.
If globalization and plutocracy have limited the transformative ability of democracies for the majority population, why is there no mass upsurge for communism? Probably because the actual communist regimes were a poor caricature of what Karl Marx envisaged in his works. Political freedom was the biggest casualty in such regimes.
In his 1966 classic Social Origins of Dictatorship and Democracy: Lords and Peasants in the Making of Modern World, Harvard University sociologist Barrington Moore Jr. put it succinctly. There was a difference between repression by communist regimes and Western liberalism. While the former was primarily directed against its own people, the latter had been directed heavily outward—both in its pre- and post-imperialist phases—against others, he argued. Five decades later, Moore’s thesis remains as valid as it was then.
Moore’s work led to an intense debate on these issues. Among the most polarizing of his conclusion was the necessity of violence to disempower the existing conservative elite for ushering democracy, a view he shared with Marx.
Mukand and Rodrik do not consider violence necessary to blunt elite capture but they stress the role of countervailing forces that can thwart elite interests. The reason why countries of Western Europe have liberal democracies is because liberalism—a product of events such as Protestant reformation and resultant acceptance of ideas of tolerance and equality despite religion—preceded a democratic transition. In contrast to this, democratic transition in most developing countries was achieved after an anti-colonial struggle in which identity rather than class occupied centrestage.
Mukand and Rodrik are unambiguous in concluding that liberalism (protection of civil rights) must have political legs in addition to normative appeal. Their research challenges the notion that economic growth alone can serve as the panacea for tackling rising intolerance in the country.
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