Reform by stealth?

Print edition : August 19, 2000
C.T. KURIEN

Democratic Politics and Economic Reform in India by Rob Jenkins; Cambridge University Press, Cambridge, 1999; pages x+250, Rs.595.

THE economic reforms introduced by the P.V. Narasimha Rao government in 1991 and continued in spite of several changes of government have come in for a great deal of criticism, both substantive and procedural. In terms of the latter, the criticisms have been essentially that the reforms have violated democratic norms; that there were no discussions about them in Parliament or even in the Cabinet; that they were pushed through by bureaucratic decisions; that the follow-up measures were not transparent; t hat the governments have tried to distract the people's attention and implement the reforms and have resorted to the tactics of "divide and rule"; and that in terms of some specific measures such as protecting the poor, the actual beneficiaries were not the targeted ones. And many more.

The book under review, written by one who teaches Politics and Sociology at Birkbeck College, University of London, admits that these criticisms are valid and provides empirical evidence to substantiate many of them. But it does more. It claims that such approaches were necessary to initiate and sustain the reforms. Going a step further, it argues that these are, indeed, ways in which democracy brings about change; not the democracy of the textbooks, but actually functioning democracy. Descriptively, th en, the book is an account of the political processes that have sustained economic reforms in India since 1991. It tries to explain why Rajiv Gandhi's much trumpeted "new economic policy" virtually collapsed within a couple of years. It also tries to sho w why a left-of-centre government that was formed in 1996 (with the support of the Left parties, which are opposed to the economic reforms initiated in 1991) and the right-of-centre government that assumed office in 1998 (one of whose major components cl aimed to be committed to the principle of "swadeshi") not only continued with the reforms, but pushed them further. At this level the argument of the book is that "the unseemly underside of democracy", hidden by theories such as the application of ration al choice in politics, has been a major factor in sustaining economic reforms.

At a deeper level, the book also purports to be a pragmatic critique of many romantic theories of democracy and some rigid theories of the state. Theories of democracy that accommodate the presence of diverse interest groups tend to project the view that conflicting interest groups will thwart attempts to bring about change through democratic processes (thus implying that autocratic regimes are more successful in bringing about change). Theories of the state that see the state as the executive of the ru ling class would argue that only changes desired and supported by that class have a chance of success. Jenkins' position is that in practice, the state, any state, has a greater measure of autonomy than is conceded by some theories and that while democra cy certainly consists of diverse interest groups, actually functioning democracies such as the one in India must be viewed as an interlocking network of frequently changing interest groups which can, therefore, be made to see new possibilities and to bec ome implicit, if not explicit, supporters of changes that are autonomously initiated. The author, however, is eager to emphasise that he is not providing a generalised account of the working of democracies. His limited objective is to show how resilient Indian democracy of the 1990s has been in accommodating, supporting and sustaining changes that have been radical departures from the economic order that had prevailed for four decades since Independence. From the readers' point of view, an irritating as pect of the book is the author's repeated statements, from beginning to end, of what the book is about and what it is not about.

Among factors that have sustained economic reforms in India, Jenkins lists the following: the suddenness with which they were initiated; the initiative taken by the bureaucracy (demonstrating the autonomy of the state); the many behind-the-scenes activit ies and decision-making processes, and the clandestine methods frequently resorted to ("stealthily introduced reforms succeeded largely because of the stealthy means through which they were introduced"); the absence of any grandiose statements about the final objectives and concentration on processes one after the other; the sense of gradualness, frequently of hesitation and willingness to withdraw and revise; the strategy of selective compensation that reinforced the malleability of interest groups; "a talent for obfuscation, the use of intentional ambiguity, and the exploitation of other politically expedient means..." (all of which) "disrupt and complicate the utility-calculating capacity of interest groups"; the deliberate use of distractions (such as the Ayodhya episode of 1992) to push the reforms.

These strategies and measures are based on the underlying features of an actually functioning democracy. For instance, they recognise the need that the ruling elites - politicians and senior bureaucrats - have for patronage so as to broker agreements. Re forms certainly did away with some avenues of patronage, but introduced new ones. A consequence of this has been unpredictable political realignments and the eagerness of politicians to get a share in power at the Centre by splitting parties, starting pa rties and entering and leaving coalitions.

Reforms have also relied on the democratic use of institutions "as voltage transformers, or substations dispersing energies through a national power grid". Among these institutions the most powerful is the formal federal polity. The strategy used by the reformers at the Centre has been to win support for specific aspects of reforms from different State governments, including the government run by the Left in West Bengal, by means of measures that have been beneficial to them. In this process the conflic t between the Centre and the States has come to be diffused by inter-State rivalries. The nebulous and informal nature of political parties has also been skilfully utilised to garner support for the reforms. The author's claim is that the initial misgivi ngs about and opposition to the economic reforms have been considerably reduced and a national consensus in favour of the reforms appears to have been established. However, he is not willing to speculate about the future course of reforms, but is willing to concede that the dynamics of democracy and the changing position of interest groups may lead to further changes in economic order and policies. Towards the end of the volume the author says: "What this study has argued is that democracy per se need n ot be viewed as an impediment to large-scale shifts in policy direction simply because it must contend with avaricious politicians, demanding electorates, and rent-seeking interest groups."

That claim may not be contested. But several questions have to be raised about Jenkins' treatment of the course of economic reforms in India. Sure enough, there have been many clandestine features to economic reforms. But it is a distortion of facts to c laim that the reforms were stealthily introduced except in the sense that they were not brought in after a national debate and vote in Parliament. Immediately after the reforms were suddenly introduced, there was a well-orchestrated publicity campaign th at uncritically and inappropriately repeated the "from centralised planning to the market economy" slogan of the East European countries where the thrust of economic reforms was on a shift from socialist ownership and operation of the economy to a capita list market economy. Forgetting that the Indian economy was based substantially on private ownership of resources and the market was a functioning and growing reality, in the early years of reform the reformers indulged in rhetoric in favour of private e nterprise and the market. Jenkins completely overlooks the external and "global" factors that favoured the introduction of reforms in 1991 and their continuance. From this perspective, his evaluation of Rajiv Gandhi's liberalisation attempt is less than adequate. True, there were internal factors, economic and more so political, that prevented that attempt from taking off. But the global scene in 1991 was markedly different from what it was in 1985. The few years between these two dates had witnessed t he collapse of East European socialist regimes with even the Soviet Union on the verge of collapse. These events were heralded as the victory of capitalism over socialism. With China also opening up its economy to foreign capital, the early 1990s had pro vided an immense psychological advantage to those who wanted not only to sing the praises of the "market economy" but to argue that economic reforms of the kind launched in 1991 were inevitable. The clever use of the vagueness of the concept of the marke t economy and the notion of inevitability made a big contribution to the acceptance and continuance of the 1991 reforms.

Some of the internal factors also fail to get the attention they deserve. As already noted, Jenkins considers the federal structure of the polity as an important institutional factor that has sustained economic reforms. But a major transformation that th e federal polity came to have in the 1990s and which has a bearing on the reforms does not find place in the analysis. This is the change that happened after the 1996 elections which threw the Congress(I) out of power. Jenkins takes note of the fact that after the elections a coalition government assumed office and that the new Prime Minister was the Chief Minister of a State who brought with him to the Centre some of the concerns of the States. But the crucial factors that have effectively contributed to the continuance of reforms - that the government at the Centre was not constituted by the Members of Parliament but was put together by over half-a-dozen influential Chief Ministers leading regional parties, that the minority coalition that assumed of fice was critically dependent on the support of the Congress(I) from outside, that within the coalition too there were many Congressmen who had left the party only on the eve of the elections, that the new Finance Minister was one among them and was an a rdent supporter of the reforms - do not form part of the analysis. Though the author insists on the role of contingent factors in the working of a democracy, his analytical frame prevents him from bringing in these significant factors into the analysis.

Finally, it must be noted that Jenkins deals only with the continuance of the economic reforms, and not with their content. That a democratic polity has not prevented the reforms from surviving is his thesis. Fine. But is a democratic polity also interes ted in knowing and assessing whether the reforms have been worthwhile? That question, however, cannot be answered without specifying and critically analysing the contents of the reforms and, more important, without specifying from which interest group's perspective the answer is being attempted. Of course, an author can say that these issues do not form part of his enquiry. But that is not among the many disclaimers that Jenkins makes. It would appear that he uses contextual tactical skill (which, accor ding to him, is a characteristic of successful politicians) to pretend that such issues are not important for actually functioning democracies.

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