All the reforms the government can get away with

Common Maximum Programmes, whatever they are called.

Amit Varma is right. Ravikiran Rao’s post on why we reformed what we did is excellent.

If you want to test out the efficacy of a drug, you split a population into two, give one of them the drug and the other a placebo. If the group that receives the drug improves and the control group that received the placebo does not improve, we know that the drug makes a difference.

You cannot take the drug’s lack of effect on the control group to claim that it isn’t effective, can you? But that is exactly what I’ve been hearing for the past ten years that I’ve been following this debate. It is bad enough that we are conducting this cruel experiment – where the rich and the middle-class are administered the medication while the poor are given the placebo. What is worse is that we’ve been ignoring the results of those experiments on the ground that the supporters of these experiments wear supercilious smiles on their faces…

We get the reforms that the government can get away with. If anyone tried to liberalize the product market, they’d face the unions, the “small scale” industrialists, the communist parties in a shameful alliance with them, and the conscience of an entire nation that still feels guilty about abandoning Gandhianism. [IEB]

The most pernicious manifestation of stealth-mode reforms is the monstrosity called the common minimum programme, which itself is a misnomer. Because the agenda of recent Indian governments has been based on the lowest common denominator of allies and partners, progress on any meaningful reform process is circumscribed. The correct term for coalition manifesto is common maximum programme. That too, maximum not in what it will deliver, but maximum that it will attempt.

5 thoughts on “All the reforms the government can get away with”

  1. Dunno who said it but the saying goes in economics that “the benefits of free trade are diffuse whereas its costs are concentrated”. Hence, one’s likely to see concentrated opposition to reform or any change in status quo.
    The poor and the agriculture sector is best helped by access to micro-credit and by prompt registration and passing of title of property, esp. land. That way, there is security and collateral and thereby access to credit and a better life for our farmers.

  2. A small quibble.

    What we followed in effect was mostly Nehruvianism a irrating mutant of socialism.

    Gandhism in spirit was abandoned long back.

    Regards

  3. I think your last line sums it all; “maximum that it will attempt to deliver”. The democracy tax has had a huge impact on what successive Prime Ministers (and in turn, their Finance Ministers) have been willing to do. Providing “stable governance” has been their mantra rather than doing (or trying to do) the utmost possible for the people who voted you in. We really need people like Ariel Sharon & Shimon Peres, who are ready to take a gamble & are ready to stand by their convictions, even if that means loss of the chair.

    India’s strategy of “reforms with a human face” has only meant that enterprise will continue to find ways to grow despite the government’s policies rather than because of them.

  4. Its frustrating – much of our population is poor because they are denied access to economic reforms …… and yet they are told that they are poor because of economic reforms – because of the the dreaded LPG (liberalisation, privatisation and globalisation)…..

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