Over the past 15 years, economies ruled by dictators have grown two and ahalf times as fast as the economies of democratic countries, according to amuch-discussed article posted on American.com, an online “magazine ofideas,” as it calls itself. If this claim is true, should people living inthe grip of despotism therefore ditch their aspirations for politicalfreedom? Not according to Independent Institute Senior Fellow Alvaro VargasLlosa. Rapid economic growth under dictatorship, he argues in his latestsyndicated column, does not provide an economic justification ofdictatorship. In addition, reports of fast growth under dictatorshiptypically paint a distorted picture of the underlying realities. “Any political system, free or unfree, that removes some obstacles toentrepreneurship, investment and trade, and makes a credible commitment tosafeguard property rights to a certain extent will trigger a virtuouseconomic cycle,” Vargas Llosa writes. However, removing anti-growthobstacles can at most create a short-term economic growth spurt; long-termgrowth requires strong pro-growth institutions—such as secure propertyrights, incentives to save and invest, and a culture of entrepreneurship—notedicts issued from on high. “First, history indicates that the combination of political, civil andeconomic freedom is a better guarantee of ever-increasing prosperity than acapitalist dictatorship,” Vargas Llosa continues. “Second, there aresufficient examples—Portugal or the Baltic countries—of underdevelopedcountries that have generated stable and reliable environments throughpolitical freedom to invalidate the notion that a country should be kept inpolitical and civil infancy until it reaches economic maturity.”
<http://www.independent.org/newsroom/article.asp?id=1984> “AreDictatorships More Successful Than Democracies?” by Alvaro Vargas Llosa(6/13/07) Spanish<http://www.elindependent.org/articulos/article.asp?id=1984> Translation
Monday, June 25, 2007
Monday, June 11, 2007
Ministries we don't need!
Hi interns!
I am attributing the lack of activity on the blog to the fact that you are probably keeping busy with your internship research and field work!
From now on, the blog will be more abuzz with activities as we get started with more weekly readings and internship experiences!
To get you started, why don't you read up the coverstory in the latest India today about the ministries that we don't need! You could put your comments about improving the system on the blog! :) The issue is available in the CCS library, and for those who want to read it online, the subscription ID will be emailed to you!
Also, EXTERNS, we want to know your experiences during field research, people you have met, situations you were in and so on, so why not, update us on the blog?? INTERNS in turn will share their experiences too!
Happy Blogging!
Renu
I am attributing the lack of activity on the blog to the fact that you are probably keeping busy with your internship research and field work!
From now on, the blog will be more abuzz with activities as we get started with more weekly readings and internship experiences!
To get you started, why don't you read up the coverstory in the latest India today about the ministries that we don't need! You could put your comments about improving the system on the blog! :) The issue is available in the CCS library, and for those who want to read it online, the subscription ID will be emailed to you!
Also, EXTERNS, we want to know your experiences during field research, people you have met, situations you were in and so on, so why not, update us on the blog?? INTERNS in turn will share their experiences too!
Happy Blogging!
Renu
Monday, May 28, 2007
3 Points
Since it's 4 in the morning, i am just writing what i can write in sleep: my 3 points for a good research paper.
1. What are the questions?
2. Don't get it right, start writing.
3. Tell me your story.
these do seem a little inconsistent in the way they are worded, may be i need to spend a little bit of waking hours to figure out a consistent phraseology.
1. What are the questions?
2. Don't get it right, start writing.
3. Tell me your story.
these do seem a little inconsistent in the way they are worded, may be i need to spend a little bit of waking hours to figure out a consistent phraseology.
Monday, May 21, 2007
A Review on ‘People are People: The Elements of Public Choice’
‘People are People: The Elements of Public Choice’ deals with what Public Choice is and its effect upon democratic processes. The author thinks of Public Choice as a relatively new discipline, the students of which, contrary to the traditional view, hold that the government does not seek to maximise the welfare of the nation as a whole; instead it serves the individual interests of government officials. Collective welfare of all the citizens in a nation is merely a by-product of the process by which private individuals and government officials maximise their interests in commodity, factor and ‘political’ markets.
The author traces the historical roots of this assumption. From the time of Aristotle and Plato, it was believed that political economy was the science of “right” action. Businessmen and civil servants were told what was morally correct and they had to do it. David Hume and particularly, Adam Smith removed this moralistic perception. They held that private individuals, at any rate, maximised their own utility in the market place. However even Smith held that public interest governed public policy. This was the difference between homo politicus and homo economicus. Homo politicus thought of maximising the public interest. A contradictory bifurcated view sprang up. This held that the same people that participate in market activities engage in public policy making as well- either directly or indirectly. Thus government officials too maximise their own interest in formulating public policy.
This assumption is far more realistic than that held in traditional thought. It follows that the government isn’t altogether efficient and is no champion of equity and equality. This also implies that government intervention isn’t a necessary cure for market failures. Unfortunately, the author does not investigate as to whether market failure is a sufficient condition for government intervention, which it may as well be, especially in case of what Sen and Dreze consider as ‘errors of omission’.[1] For instance, in the case of a famine that has originated due to a lack of purchasing power to buy food grains, the market has committed an error of omission. It hasn’t generated enough purchasing power. Thus this is a sufficient condition for the government to start an income and employment generating relief programme. As far as Public Choice is concerned, students of this discipline will hold that politicians would propose this programme in order to get re-elected. It is in their self interest. This assumption is a practical one.
The author holds that the asymmetry of information problem is far more acute in the case of political markets. While one is likely to research the features of an automobile one would like to buy, one’s vote would merely be one in a million while electing a political leader. Thus one would not have an incentive to research the integrity and efficiency of that leader. While markets target well informed consumers, politicians target badly informed citizens. This deduction has an inherent flaw- it has not considered the role of the media. After all, the media provides a fairly researched insight into the activities of various political figures. If a politician is caught taking bribes or politicising economic decisions (locating PSUs in their own constituencies) the media is quite likely to inform the public of it. However, it may sensationalise facts to serve its profit motive but this will only bring short-term profits. In the long run and in a fairly competitive market, the media’s consumers will not like being misinformed.
The author gives the impression that students of public policy are cynical about the role of the government. Thus they believe that government functions should be privatised, as in, contracted out. Also they should be decentralised. Instances of each have been provided. The efficiency of contracting out is evident in that the United States’ privatised military procurement has proved to be more efficient than the military’s production of its own material. This is possible even in India and is now being carried out in the form of PPP (Public Private Partnership). As per decentralisation, a lot of community members often get together and take decisions on the administration of the community schools, hospitals etc. They also decide upon issues like how late an individual may play music or what colour each individual should paint her fence. This internalises externalities and would be particularly effective in India. If the teachers of a rural school were responsible to the parents rather than to the State Ministry of Education, teacher absenteeism and poor teaching quality would be greatly reduced.
Thus Public Choice is a discipline with a largely realistic outlook. However, it is far too cynical about the government. In a country like India, government investment is highly important, especially in fields like education, health and infrastructure provision where there is scope for positive externalities and where the asymmetries of information are many. A poor woman, who takes her child to a not-so-well-known private clinic as she cannot afford to go to a private clinic or hospital of repute, may not know whether she or he is being injected with plain water instead of vaccine. Surely, it is in the interests of the clinic to inject the child with plain water as this minimises costs. In case of a government clinic however, the treatment is more likely to be of a particular standard. Thus government investment in improving the condition of these clinics is a must.
[1] See Sen and Dreze, ‘Development and Participation’, Chapter 2.
Ruchira Sen
The author traces the historical roots of this assumption. From the time of Aristotle and Plato, it was believed that political economy was the science of “right” action. Businessmen and civil servants were told what was morally correct and they had to do it. David Hume and particularly, Adam Smith removed this moralistic perception. They held that private individuals, at any rate, maximised their own utility in the market place. However even Smith held that public interest governed public policy. This was the difference between homo politicus and homo economicus. Homo politicus thought of maximising the public interest. A contradictory bifurcated view sprang up. This held that the same people that participate in market activities engage in public policy making as well- either directly or indirectly. Thus government officials too maximise their own interest in formulating public policy.
This assumption is far more realistic than that held in traditional thought. It follows that the government isn’t altogether efficient and is no champion of equity and equality. This also implies that government intervention isn’t a necessary cure for market failures. Unfortunately, the author does not investigate as to whether market failure is a sufficient condition for government intervention, which it may as well be, especially in case of what Sen and Dreze consider as ‘errors of omission’.[1] For instance, in the case of a famine that has originated due to a lack of purchasing power to buy food grains, the market has committed an error of omission. It hasn’t generated enough purchasing power. Thus this is a sufficient condition for the government to start an income and employment generating relief programme. As far as Public Choice is concerned, students of this discipline will hold that politicians would propose this programme in order to get re-elected. It is in their self interest. This assumption is a practical one.
The author holds that the asymmetry of information problem is far more acute in the case of political markets. While one is likely to research the features of an automobile one would like to buy, one’s vote would merely be one in a million while electing a political leader. Thus one would not have an incentive to research the integrity and efficiency of that leader. While markets target well informed consumers, politicians target badly informed citizens. This deduction has an inherent flaw- it has not considered the role of the media. After all, the media provides a fairly researched insight into the activities of various political figures. If a politician is caught taking bribes or politicising economic decisions (locating PSUs in their own constituencies) the media is quite likely to inform the public of it. However, it may sensationalise facts to serve its profit motive but this will only bring short-term profits. In the long run and in a fairly competitive market, the media’s consumers will not like being misinformed.
The author gives the impression that students of public policy are cynical about the role of the government. Thus they believe that government functions should be privatised, as in, contracted out. Also they should be decentralised. Instances of each have been provided. The efficiency of contracting out is evident in that the United States’ privatised military procurement has proved to be more efficient than the military’s production of its own material. This is possible even in India and is now being carried out in the form of PPP (Public Private Partnership). As per decentralisation, a lot of community members often get together and take decisions on the administration of the community schools, hospitals etc. They also decide upon issues like how late an individual may play music or what colour each individual should paint her fence. This internalises externalities and would be particularly effective in India. If the teachers of a rural school were responsible to the parents rather than to the State Ministry of Education, teacher absenteeism and poor teaching quality would be greatly reduced.
Thus Public Choice is a discipline with a largely realistic outlook. However, it is far too cynical about the government. In a country like India, government investment is highly important, especially in fields like education, health and infrastructure provision where there is scope for positive externalities and where the asymmetries of information are many. A poor woman, who takes her child to a not-so-well-known private clinic as she cannot afford to go to a private clinic or hospital of repute, may not know whether she or he is being injected with plain water instead of vaccine. Surely, it is in the interests of the clinic to inject the child with plain water as this minimises costs. In case of a government clinic however, the treatment is more likely to be of a particular standard. Thus government investment in improving the condition of these clinics is a must.
[1] See Sen and Dreze, ‘Development and Participation’, Chapter 2.
Ruchira Sen
The Advent of Delhi Metro in Chandni Chowk
One would think that the metro line through Chandni Chowk would have brought in streams of shoppers and tourists. After all, it makes the famed Chandni Chowk far more accessible-even to those from areas as far away as Rithala and Shahadara, Dwarka and Indraprastha, Central Secretariat and Delhi University- incidentally, the metro terminals as of today. Earlier the lure of kaju paranthas, kareem kababs, phirni and desi ghee sweets could still be passed over in lieu of massive transportation trouble and costs. However, considering the new accessibility of the famed paranthewali gali, jewellery and sari markets, as well as Red Fort and Jama Masjid, it is a wonder that business in the transport and food markets has not boomed.
It is of course, not surprising that ‘Phatphat Sewa’ has seen a 50% decline in revenue as per the estimates of the van drivers. Though this stream of taxi vans, which picks up various passengers along established routes, provides a cheaper travelling alternative to passengers from Shahadara, Maujpur, Krishna Nagar, Selampur, Bhajjanpur and Connaught Place, it is far slower and less comfortable than the Metro. The Phatphat Sewa line of taxi vans that once ran from Connaught Place to Chandni Chowk had to be disbanded altogether due to lack of demand. Evidently, commuters prefer the Metro.
However, a rickshaw puller claimed that his returns have increased so much so that he earns Rs. 20 more than he did before the ‘Yellow Line’ became operational. This is primarily because rickshaws complement the Metro unlike Phatphat Sewa, which acts as a substitute. Most commuters leave their vehicles behind in metro station parking lots, take the metro to Chandni Chowk and then climb into rickshaws. Thus this approximate increase of Rs.20 per day in returns, and hence profit on the part of the rickshaw puller is a small wonder indeed.
As per the food market, one particular trend may be observed. The shops closer to the metro station have by and large, experienced larger increases in returns than shops that are further off. Chaina wala may have been recognised as the best sweet shop in 2006 by The Times Group and it may have won the Times Food Award for three years in succession, but it has experienced no significant increase in returns. Bikanervala which is slightly closer, reports a 2-4% increase. However, the far more proximate Vishal Mava Bhandar estimates a 25-30% increase, despite the fact that it is only 20 years old while Bikanervala is 44 and Chaina wala, 59. Another beneficiary, in terms of returns, is Tewari and Sons which has estimated a 10-15% increase in profits. However, it is a deviation from this trend as it is closer to the Metro station than Vishal Mava Bhandar, and just as old. Of course, this observation need not hold true at all, as the profit figures might have been either overestimated or underestimated by the shopkeepers, for various reasons. The owner of Bhikarams chose to lay the blame for his less than significant increase in returns upon the fact that Chandni Chowk has far too much rush and bustle and far too many strikes, to attract customers. According to him, there shall be no increase in business until there is a change in the state of affairs.
It may seem odd that Kanwarjis, the famous 125 years old, desi ghee sweet shop has seen no significant changes in returms. Paranthewali gali on the other hand, has received scores of visitors. ‘The Power of Paranthas’ owned by P.T. Gaya Prasad Shiv Charan estimated a 20-30 percent increase in revenues. Of course, this shop dates its origin to 1872. Yet even the merely 95 years old Babu Ram Parantha Wale has earned a 50% increase in returns. Kanwarjis have not been as successful as their prices are too high and they cater only to an exclusive clientele.
It is however significant that even those shopkeepers, who have not acquired a significant increase in revenues, add that Delhi Metro has been a huge convenience. It has caused a decrease in congestion as people no longer park their vehicles in Chandni Chowk . They take the metro and then, find a rickshaw. Even shop assistants, employees and owners can easily commute to their work areas in Chandni Chowk and no longer need their cars and scooters, leaving the narrow galis to pedestrians. Parking space, however, is to be increased, which shall reduce congestion even further. As per strikes, as the owner of Bikanervala put it, “Strikes don’t happen all the time.” Most shop-owners estimate a future increase in returns-even if they aren’t too high at present. They estimate that with traffic regulations and a lesser wastage of commuting hours, business shall soon boom in Chandni Chowk.
(Just a little primary interview based survey taken long back. Hope it can be of interest.)
Ruchira Sen.
It is of course, not surprising that ‘Phatphat Sewa’ has seen a 50% decline in revenue as per the estimates of the van drivers. Though this stream of taxi vans, which picks up various passengers along established routes, provides a cheaper travelling alternative to passengers from Shahadara, Maujpur, Krishna Nagar, Selampur, Bhajjanpur and Connaught Place, it is far slower and less comfortable than the Metro. The Phatphat Sewa line of taxi vans that once ran from Connaught Place to Chandni Chowk had to be disbanded altogether due to lack of demand. Evidently, commuters prefer the Metro.
However, a rickshaw puller claimed that his returns have increased so much so that he earns Rs. 20 more than he did before the ‘Yellow Line’ became operational. This is primarily because rickshaws complement the Metro unlike Phatphat Sewa, which acts as a substitute. Most commuters leave their vehicles behind in metro station parking lots, take the metro to Chandni Chowk and then climb into rickshaws. Thus this approximate increase of Rs.20 per day in returns, and hence profit on the part of the rickshaw puller is a small wonder indeed.
As per the food market, one particular trend may be observed. The shops closer to the metro station have by and large, experienced larger increases in returns than shops that are further off. Chaina wala may have been recognised as the best sweet shop in 2006 by The Times Group and it may have won the Times Food Award for three years in succession, but it has experienced no significant increase in returns. Bikanervala which is slightly closer, reports a 2-4% increase. However, the far more proximate Vishal Mava Bhandar estimates a 25-30% increase, despite the fact that it is only 20 years old while Bikanervala is 44 and Chaina wala, 59. Another beneficiary, in terms of returns, is Tewari and Sons which has estimated a 10-15% increase in profits. However, it is a deviation from this trend as it is closer to the Metro station than Vishal Mava Bhandar, and just as old. Of course, this observation need not hold true at all, as the profit figures might have been either overestimated or underestimated by the shopkeepers, for various reasons. The owner of Bhikarams chose to lay the blame for his less than significant increase in returns upon the fact that Chandni Chowk has far too much rush and bustle and far too many strikes, to attract customers. According to him, there shall be no increase in business until there is a change in the state of affairs.
It may seem odd that Kanwarjis, the famous 125 years old, desi ghee sweet shop has seen no significant changes in returms. Paranthewali gali on the other hand, has received scores of visitors. ‘The Power of Paranthas’ owned by P.T. Gaya Prasad Shiv Charan estimated a 20-30 percent increase in revenues. Of course, this shop dates its origin to 1872. Yet even the merely 95 years old Babu Ram Parantha Wale has earned a 50% increase in returns. Kanwarjis have not been as successful as their prices are too high and they cater only to an exclusive clientele.
It is however significant that even those shopkeepers, who have not acquired a significant increase in revenues, add that Delhi Metro has been a huge convenience. It has caused a decrease in congestion as people no longer park their vehicles in Chandni Chowk . They take the metro and then, find a rickshaw. Even shop assistants, employees and owners can easily commute to their work areas in Chandni Chowk and no longer need their cars and scooters, leaving the narrow galis to pedestrians. Parking space, however, is to be increased, which shall reduce congestion even further. As per strikes, as the owner of Bikanervala put it, “Strikes don’t happen all the time.” Most shop-owners estimate a future increase in returns-even if they aren’t too high at present. They estimate that with traffic regulations and a lesser wastage of commuting hours, business shall soon boom in Chandni Chowk.
(Just a little primary interview based survey taken long back. Hope it can be of interest.)
Ruchira Sen.
Friday, May 18, 2007
The Great Rilaway Bazaar - My Take
Since everyone is posting their reviews here, here's mine
Oh and what are the topics that have been floated ... also if ppl could just let us know the topic they would be working on, it would be great !
____
Oh and what are the topics that have been floated ... also if ppl could just let us know the topic they would be working on, it would be great !
____
Undoubtedly a very well researched article. A very quintessential example of how obscure government policies can be. If I extrapolate a bit further the recent spat over reservations in institutes of higher education quite rightly points out the skewed outlook of our policy makers. Reservations were meant (as proposed by Dr. Ambedkar ) just for the first 10 years post independence … but it has continued even after more than five decades ! Arguments of the HRD are based on some 30 yr old census which is of no consequence today. Policy makers hence need to open up and need to take a more sensible, mature and rational stand on issues, instead of just continuing with old norms and laws thereby making a mockery of the entire system !
I would also like to add that this “license fee” system is not new to me. I feel it is the socialist and the communist outlook that is very strongly instilled in people – especially the middle class. If we analyze, we would realize that it is the “job security” and the perquisites that people are running after. They are ready to pay a hefty sum just to ensure they land up in a govt job and settle comfortably in the lethargic system. I have seen people paying huge amounts of money to secure a government job.
Regarding the current article, there are still some questions that are left unanswered, or rather have raised some questions in my mind-
- Is this phenomenon prevalent just in and around N.Delhi? Has the demographics got something to do with it?
- What is the background in terms of educational qualifications of those offering to be porters?
- Are the perquisites same across all railway divisions?
- If railways is such a profitable organization, what then are the bottlenecks in increasing thenumber of porters and granting them employee status?
Sunmay Shivadekar
Oh and what are the topics that have been floated ... also if ppl could just let us know the topic they would be working on, it would be great !
Is privatization the solution!!!
Hii Everbody,
I was surprise to read Porters article as it elucidated the legalities pertaining to aforementioned class in general. I was taken aback by the topic, as I never thought of such niche segment in general. However, this one article seems to be paradoxical. Though on one hand porters are not employed on Government of India’s payroll but the same is licensed (controlled) by the railways to earn a livelihood by offering his services to railway passengers for transport of their luggage.
As like all other policies, people have found ways to go around it and have been successful in finding the gaps, which exists, in the present framework. All I suggest is that at least porter policy should be privatized which will result in better functioning with some degree of control over the price charged and number of hours worked by the goverment. For instance: Toll Tax collection on Delhi borders which was rendered in private hands few years back have resulted in better collection and operation. It’s even a good method to measure the effectiveness of policy thus changed, as management of porters must have been left to a private agency. Though this is not a casting stone solution and there might be other ways to puzzle out this challenge.
My thoughts though!!! Anticipating your comments!!!!! Cheers!!!
I was surprise to read Porters article as it elucidated the legalities pertaining to aforementioned class in general. I was taken aback by the topic, as I never thought of such niche segment in general. However, this one article seems to be paradoxical. Though on one hand porters are not employed on Government of India’s payroll but the same is licensed (controlled) by the railways to earn a livelihood by offering his services to railway passengers for transport of their luggage.
As like all other policies, people have found ways to go around it and have been successful in finding the gaps, which exists, in the present framework. All I suggest is that at least porter policy should be privatized which will result in better functioning with some degree of control over the price charged and number of hours worked by the goverment. For instance: Toll Tax collection on Delhi borders which was rendered in private hands few years back have resulted in better collection and operation. It’s even a good method to measure the effectiveness of policy thus changed, as management of porters must have been left to a private agency. Though this is not a casting stone solution and there might be other ways to puzzle out this challenge.
My thoughts though!!! Anticipating your comments!!!!! Cheers!!!
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