Friday, April 27, 2012

India and Its Psephocracy

India and China are giants, both in terms of their economies and their populations. Both are pursuing paths intended to grow their economies and provide their citizens with prosperity comparable to that enjoyed by the developed nations such as the US and EU countries. By all manner of reckoning, China seems to be moving faster and along a surer path than India. Yet, economists persist in assuming that India will be the stronger economy in the end. This faith is based on two things: the belief that a democracy will always outperform a state-guided economy, and the fact that India will benefit from having many more working-age people in the future. 

Basharat Peer provides an article in Foreign Affairs that provides us with an update on how India is doing. His title provides a clue: India’s Broken Promise: How a Would-Be Great Power Hobbles Itself.

While many vaunt India as the world’s largest democracy, Peer introduces the term psephocracy and suggests it is more descriptive and accurate. This is presumably a new term that has yet to make it into mainline dictionaries. One has to wonder if perhaps it wasn’t created to encompass the uniqueness of the political situation in India. In Wiktionary one can find a definition that clearly intends to differentiate between what a psephocracy is and what most would assume to be a democracy. Both involve ballots to select from candidates to determine a representative for the voting public. The implication is that in a psephocracy the elected representatives then ignore the needs of those they are supposed to represent and pursue their personal interests—at least until the next election.

According to Peer’s narrative, the hallmarks of India’s psephocracy are corruption, ineffectiveness, and a lack of focus on national problems. The result is a growing economy where wealth is accumulating in the hands of a few and most are seeing little benefit.

"According to a recent Organization for Economic Cooperation and Development report, inequality in earnings has doubled in India over the last two decades."

"Chief among the factors that contribute to inequality in India are prejudice and corruption, both of which undermine meritocratic advancement and stymie upward mobility. Although economic liberalization has provided socially disadvantaged citizens with more opportunities than they had in earlier eras, intense discrimination persists against Indian Muslims and lower-caste Hindus, such as Dalits, or ‘untouchables’."

"Although those groups on the social margins continue to face the most difficult odds, frustrations have also begun to mount across a wider spectrum of Indian society, as a restless, young, educated population finds its expectations thwarted by the corruption that permeates all levels of government in India. In August and September of last year, India was convulsed by massive anticorruption protests triggered by a series of scandals, including the sale of millions of dollars' worth of cell-phone spectrum at below-market rates to well-connected telecommunications companies and outrageous graft and fraud in construction contracts for the Commonwealth Games held in New Delhi in 2010. The scandals involved lawmakers; high-profile politicians from the ruling party, the Indian National Congress; and business tycoons."

Corruption seems to be an intrinsic component of India’s economy and of its society. Although the least wealthy endure the most severe effects from the practice, they also recognize that it provides a well-trodden path out of the slums and into a better life.

And how do the youth who are to fuel India’s explosive growth in the future fare under India’s political system?

"In 2010, India spent $28.6 billion on antipoverty programs. But last year, a World Bank report revealed that 59 percent of the grain allotted for public distribution to the poor in India does not reach its intended recipients; instead, it is siphoned off by middlemen and crooked government officials and then sold on the black market. This is one reason behind the grim precariousness of life in India. Four hundred and sixty million Indians are between the ages of 13 and 35, and by 2020, the average age in India will be 29....But a vast number of the boys and girls who should become part of India's work force in the coming decades are instead dying of undernourishment. According to UNICEF, malnutrition is more common in India than in sub-Saharan Africa. One in every three malnourished children in the world lives in India. More than 2.1 million Indian children die every year before reaching their fifth birthdays; half of those die within a month of birth."

India seems to be developing into a bimodal society and a bimodal economy. The wealthy get wealthier and experience declining fertility levels (as in most developed countries), while the poor stay poor and maintain their traditionally high levels of fertility. Good luck with making that work! And good luck with finding jobs for hundreds of millions of poorly-nourished and poorly-educated youths.

And as for the fruits of psephocracy:

"Today, no Indian politician or political party inspires public confidence, as the task of governance recedes amid the ceaseless campaigning and electoral machinations that consume the country's political classes."

"The resulting paralysis is one reason India's rulers have been unable to make progress on the violent domestic conflicts that have cost thousands of lives and hundreds of millions of dollars: the occupation of disputed Kashmir, the insurgencies in the northeast, and the Maoist-led rebellion across the forests of central India. Nor have they been able to overhaul the country's crumbling infrastructure, increase its agricultural productivity, expand health care to its most vulnerable citizens, or reform its brutal police departments and inefficient criminal-justice system."

If India and China are in a competition, a wise betting person would place their money on China.

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