Less government, by default

“Government is not a solution to our problem, government is the problem.” In has been 27 years since former US President Ronald Reagan spoke these words during his first inaugural address. And in that time, large parts of the democratic world have undergone a great transformation in how citizens view government. So much so that in many countries, even left-leaning political parties today articulate a less state-led view of the world than in the past. And, despite a few hiccups, this streak appears set to continue for a while.

What about India? Certainly, here too we have been marking, for almost two decades now, the ‘post-liberalisation’ years. But the idea of ‘less government’ in India has neither had the same starting point nor the same journey as in the West.

In most of the US, and the West in general, the questions and the debate about limited government have stemmed organically from the political right, where the theory has always been that in order to advance individual liberty and enterprise, we must restrain the role of government to a minimum. But this debate has also had a dialectic credibility because it has happened over a foundation of successful delivery of public goods and services by governments, most of which is by now taken for granted.

Our trajectory during the post-liberalisation years has not informed by a debate about the rights of individuals, the role of government, and the social contract between citizens.

• Ministries must stop regulating

• A qualified freedom

In India, on the other hand, ‘less government’ is not really about ‘more freedom’; that equation doesn’t have rational roots in Indian realities. Instead, the articulation here feeds off public despair at governments that haven’t delivered even in critical and essential areas such as ‘equality before law’ and ‘public goods’. The resulting angst has almost always led people to seek alternative ways of provisioning public goods and services, for everything except the legislature and the justice system itself.

The false start

Still, let’s roll back to what is popularly perceived as the starting point of the Indian journey on questioning the role of ‘big’ government - 1991 and after.

Our ‘liberalisation’ was not motivated by any great desire to re-structure the economy or government, but instead by a simple matter of not having enough money to pay our international debtors. So, we did what was required of us to keep our economic heads afloat. But, having done so, we - with the media largely in consensus - decided it would be better if we re-told this history more favourably. Therefore, we latched on to various leaders - especially in the Congress party - as ‘architects’ of our ‘liberalisation’. In fact, our delusion about the liberalisation ‘era’ is so thorough that four years of re-licensing by the UPA has not worn the sheen off.

In any event, the limited ‘new freedoms’ of our post-1991 years have all been institutional. What we’ve focused on are things like freeing companies from the license raj, freeing customers from monopoly services by public sector companies, and so on. None of this is motivated by a particular view of personal liberty that demands liberalisation, except in hindsight. Our trajectory during these years has not informed by a debate about the rights of individuals, the role of government, and the social contract between citizens. Instead, we have simply traveled some distance along an unfamiliar course, groping towards higher economic freedoms, and still unsure of our social freedoms.

This has had some predictable results. Our economy, while we like to think of it as ‘pro-market’ in its liberal avatar, is actually nothing of that sort. In the public sector, the parallel economy of rent-seeking public officials and politicians in still firmly entrenched. And countless services that have nothing to do with governance are performed by the state, even as many others that are clearly the responsibility of the government - justice, and public service delivery, to name only two - are neglected.

In the private sector too, it is quite straightforward to predict which of our large companies, or even the small, well-connected ones will be successful, simply based on the political calculus behind their operations. And while nearly every business claims to resent favouritism by the government towards its competitors, its response has not been to call for greater autonomy for free enterprise. Instead, companies work to steer government favours towards themselves. This ‘competition for un-governance’ is the real ‘market’ in India.

Less government, by default

While endless rounds of complaint and criticism have been seen in every arena, this has not led the public to demand that the size of government be reduced. How long will this last? There’s no way to tell when things will change, but it seems increasingly certain that they will, even if later than sooner.

For one, the better-off classes are already finding various ways of seceding from the commons. The less better-off - whose aspirations are bench-marked by the conduct of the haves - are bound to recognise a pattern: less government, more freedom. In the meantime, unless substantial reforms happen, governments will continue to under-deliver for the poor. Public services may then end up being created and provisioned by private players, whether business models exist to reach the millions or not. And if this were even a little successful, it would convince even more people to throw in their lot with the idea that less government is the only way forward.

The real shake-up will come when a political party - not necessarily a new one - decides it is opportune to question the very size and role of government, and make that challenge the core of its quest for power. Certainly, if the right conditions for a ‘small government’ party were to emerge, there will be someone to wear that mantle politically, a la-Reagan or Thatcher for our reality. Such a party might even do quite well at the hustings. The inability of the larger political parties to break with their traditional ways of gaining power and governing has left voids to be occupied. A small party with a focus on, say, urban government only, could easily claim a clear position for itself intent on limiting the size of government in specific ways for specific goals.

Cities - or a small, high-literacy state like Goa - are the likeliest arenas for this change. The lack of adequate devolution of political and fiscal power at the city level has so far prevented the emergence of new political outfits in tier-1 cities with a stricter local focus, similar to how state-level/regional parties have diminished the political domination of the national parties at the Centre. But that could change, if constitutional requirements on devolution are pushed through. Or, if any of our mega-cities were to turn into a city-state, then too the politics of limited government might emerge.

Would that be a good thing for India? We’ll leave that question to you, for the moment.