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The democracy penalty

R Jagannathan | Thursday, December 17, 2009
<a href='/authors/r-jagannathan' style='color:#731643;#000;'>R Jagannathan</a>
R Jagannathan

The Centre’s statement on the creation of a separate Telangana state has set off a free-for-all that borders on the ridiculous. Every two-bit politician or group of vested interests has hopped on to the bandwagon and we seem to be on the threshold of a major atomisation of the polity.

The move towards smaller states offers the prospect of greater administrative efficiency and political responsiveness to people’s needs, but the mere splintering of big states into small will not by itself ensure happy results.

The broad experience with smaller states is this: those carved out of already efficient units (Punjab, Haryana and Himachal, for example) have functioned well post-split; those culled out of dysfunctional ones (Bihar and Jharkhand) seem to court failure. The jury is out on Chhattisgarh and Uttarakhand. The results will depend on the kind of political leadership these states throw up in their early stages of statehood. In the latter two, we have not seen the kind of instability we saw in Jharkhand, where the Kodas and Shibu Sorens used power for personal aggrandisement.

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Broadly speaking, carving Telangana out of Andhra Pradesh or Vidarbha out of Maharashtra should work; both would have had the advantage of emerging from fairly well-administered states. The carving of several micro-states out of an already splintered north-east may not, however, have the same beneficial effects, for they border two other failing states — Myanmar and Bangladesh. Both are enormous sources of instability.
Is there a way to create smaller states without each one carrying the baggage of the past or the handicaps of geography? Should the splintering of states be a mindless exercise or something purposeful?

One thing is clear. Leadership makes a difference — this is the advantage India had over Pakistan and Bangladesh in the formative years —but we also need the right institutional arrangements so that even average leaders can deliver reasonable results. The only way to come up trumps is to use the Telangana crisis as an opportunity to renew the Indian federation through constitutional change. Splitting states cannot just be about regional appeasement.

Let us understand what works for us and what doesn’t. The first thing is democracy. We have managed diversity sensibly and we have our democratic institutions to thank for that. On the other hand, we have not managed the unity in our diversity well. We are diverse, but seldom united. In the economic sphere, we continue to pay a democracy penalty in terms of our growth rates and policy formulations. We have also failed to achieve our social goals: despite quotas, Dalits remain backward; every third Indian lives below the poverty line.

Liberals will dispute the democracy penalty theory, but evidence is mounting worldwide that social change happens faster under authoritarian structures, especially in developing countries. There is a reason for this: social, political and economic modernisation needs a concentration of power to defeat the traditional social order where caste, feudal or peasant hierarchies resist change.

Modernisation needs these forces to be neutralised or defeated. The whole of east Asia modernised and lifted people out of poverty through authoritarian capitalism. Latin America did the same. China is now proving the same point. In his insightful book, Political Order in Changing Societies, the late Samuel Huntington, better known for his later work on the “clash of civilisations”, underscores the same point.

“Diffusion of authority”, he says, “is incompatible with political modernisation. Modernisation requires authority for change.” Explaining why the framers of the US constitution opted for a diffusion of power among various arms of the state — the presidency, the legislature, and the courts — he adds: “In modernising societies, the centralisation of power varies directly with the resistance to social change. In the US, where resistance (to change) was minimal, so also was the centralisation.”

It follows, that in India, where the resistance to change is high from casteist, linguistic and religion-based groups, we need more centralising powers in our Constitution at this stage in our development process even while we decentralise decision-making to smaller states. One way to achieve this is to shift to an executive-driven state, which allows individuals to run for the presidency through something like the French electoral system.

This will allow people to directly elect a president (and state governors). The chief executive thus elected should also have the veto powers of the US president, who can have his own executive cabinet. This will truncate the powers of the legislature to block sensible legislation. Currently, legislatures shy away from good legislation and the courts have to intervene to ensure sound law.

The second reform should be to devolve more economic power to the states, which should be split through a new states reorganisation commission. This approach will be relevant not only to a Telangana or a Gorkhaland, but also Kashmir. It will enable all of us to renew the federation that is India, where we have unity as much as diversity.

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