Thoughts on economics and liberty

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India needs political reforms, not a presidential system

Sanjeev Sabhlok

(Sent to Times of India in early 2008. Not Published. Hence published on internet – now published on my blog for completeness)

A question is raised periodically in India about whether a presidential system will work better for us than our current Westminster model. This is a legitimate question given that we have some of the most corrupt politicians in the world.

I propose to make a few comments regarding this debate recently revived by Mr. Shashi Tharoor. My comments are based on the experience of working with ministers within two Westminster democracies, the Indian and the Australian. I propose to show that the performance of India’s current system can be significantly improved, and therefore a presidential system should be ruled out, at least for now.

Our quality of governance is determined by the kind of representatives we elect. The mere form of democratic representation, whether Westminster or presidential, whether proportional or first-past-the-post, doesn’t seem to matter so long as good people are able to get elected. By ‘good’ I mean people who are honest, ie. do not use corrupt money in their election campaigns or lodge false accounts of election expenses, are and competent, ie. knowledgeable on policy matters.

Two democratic frameworks which look alike on the surface can lead to dramatically different outcomes based on whether they can attract good people to politics or not. A comparison of the performance of the Indian and Australian systems is a case in point. While the Australian system elects brilliant and honest representatives, the Indian system largely elects incompetent and corrupt representatives. I say this from direct observation of ministers during my working relationships with them in these two countries.

Indeed, I would suggest that the Indian system actively prevents honest candidates from contesting elections. For example, a candidate in India loses the money spent on an election campaign since there is no reimbursement on the basis of votes polled. India also pays its representatives a salary that is too low to attract talented and knowledgeable people to politics. Therefore, the numbers don’t add up, and it is primarily the morally challenged, imprudent, and incompetent Indians who participate in politics.

Our real problem, therefore, is that our Westminster system produces extremely low quality representatives, even though its Australian counterpart is able to produce outstanding results. Why is this so? I attribute this to three design features in the Australian and American systems that are not found in India. First, these countries do not have election expense limits. This allows for complete transparency in fund raising and expenditure; there is no incentive to lodge false statements of electoral expenses. Second, their governments partially reimburse election campaign expenses. The Australian system pays for each valid vote cast. Third, successful representatives are paid salaries comparable to what senior managers in the private sector get.

These design features enable thousands of good people to join politics in Australia and the USA. Citizens of these countries are spoiled for choice. By adopting similar practices, India will also be able to attract thousands of currently disenfranchised good people to politics. That will mark the dawn of a completely new era for India, an era of honesty and competence in public life that we have never experienced in sixty years.

Discussions on the presidential system should therefore be put on hold and the focus shifted to reforms of the current system. The reforms needed include the three reforms suggested above, as well as others I have outlined in a forthcoming book. These reforms should be easy to implement, at least compared with moving to a completely new system of representation.

Of course, one reason why these reforms won’t be implemented is that many current politicians will lose their seats if they allow good people to enter politics. That does not mean the presidential system will do any better. The same resistance to let good people enter politics will mean that when a presidential system is introduced, our most corrupt politician will become President.

The author, a former IAS officer, now works in an Australian state government.

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Monthly articles in Freedom First – completed, and proposed

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My articles published in FF so far

2008

2009

2010

Proposed further articles

At this stage I decided to pause writing for FF and move into the blog on a more active basis. Should I find time to do so, I'll write on the following subjects:

 

  • Leadership in politics
  • Industry policy (that there should not be a policy)
  • Arts and archeology policy [the value of social cohesion, including +ve externalities of bollywood and cricket]
  • Alcohol and drugs policy
  • Sports policy
  • Physical infrastructure policy 
  • Transportation policy (roads, rail, etc.
  • Energy policy
  • Water policy
  • Space and nuclear policy
  • Trade and commerce policy
  • Urban planning – a detailed article
  • Defence policy
  • Justice system reforms

Sanjeev Sabhlok

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Synopsis of "Breaking Free of Nehru"

The book discusses the impact of Nehruvian socialism on freedom in India. It reflects on Indias post-independence experience and finds that India needs to move well beyond socialist paradigms towards freedom and innovation if it wishes to retrieve its status as a great nation.

It then traces the causes of India’s political and bureaucratic corruption, its poverty, and its large, illiterate population. The book then proposes numerous ways to transform India’s governance thorough competitive, freedom-based, solutions.

Solutions recommended range from a re-write of the Indian Constitution in order to make it simpler and clearly focused on freedom, to the radical restructure of the Indian public services based on modern public sector reforms across the world. It advocates state funding of elections, raising the salaries of politicians significantly, freeing the labour market, imposing carbon taxes on pollution, seeking compensatory payments from developed countries for their prior carbon emissions, and complete privatisation of school and university education.

It argues that India can, and should, aspire to be the worlds best in everything it does. I believe that no Indian should settle for anything less than that.

REQUEST

My ‘business’ model for this book is to supply it freely on the internet for wider dissemination of the message, and to hope that someone will find it worthwhile to print and distribute this book cheaply in India. I’d therefore request you to review this book on your blog and to send out the link to the book to your friends.

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Be careful while giving. Giving can give offense.

Sent to The Age on 8 January 2007 for publication but not published. Hence put up on my newly re-activated blog.

Many of the arguments by Peter Singer ("Giving till It Doesn't Hurt") in The Age of 6 January 2007 to persuade developed countries to open up their purse strings to alleviate poverty in developing countries were so misplaced that I couldn't help throwing my hat into the ring.

First, it is insulting to be at the receiving end of someone’s charity. Self-respecting people do not care for displays of charity towards them. Trade on equal terms, yes. Open exchange of ideas, sure. But for the West to take upon itself the role of looking after the poor of other sovereign countries is paternalistic and reeks of the "white man's burden". Self-respecting peoples everywhere simply ask to be left free to determine their own destiny, even if this destiny seems to others to include a fair share of poverty and disease. Unwanted donations are a form of political humiliation.

Second, Singer fails to show how the aid, even if it were free of political complications, will actually reach the poor. Singer suggests that $808 billion can be raised each year. Presumably this must reach the poor. But the reality is that most of it will end up in the Swiss bank accounts of illegitimate or corrupt politicians and bureaucrats.

Indeed, Singer himself has identified the rampant political corruption in these countries by citing Thomas Pogge: "international corporations are willing to make deals to buy natural resources from any government, no matter how it has come to power." In reality this is an absolutely chronic problem. Even when aid is directly supervised by the West, as in the case of the reconstruction of Afghanistan or Iraq, corrupt practices nullify the entire effort. And in my previous life I have personally witnessed the active misuse by politicians and bureaucrats of aid funneled through grossly over-paid United Nations officials.

And as foreign aid is fungible, it also arms and strengthens corrupt regimes everywhere. Therefore, foreign aid almost invariably makes poverty much worse than it was before. Foreign aid is mostly poison.

“Give a man a fish and you will feed him for a day. Teach him how to fish and you will feed him for a lifetime.” Erstwhile poor countries that took the path of freedom and good governance – the lessons from the West, experienced economic growth and were able to eliminate poverty. South Korea and Hong Kong readily come to mind. The West must teach its methods, not provide fish to the corrupt.

Third, my calculations show that even poor countries like India possess sufficient money to completely eliminate poverty, if they choose to adopt a negative income tax model. Instead, India has a range of subsidies and other “poverty alleviation programs” that are primarily used by its politicians to line their pockets. The point is that poor countries do not need anyone’s charity to eliminate poverty. They consciously choose not to.

However, not all is lost for those of us who are appalled at the ongoing poverty in the world today. We can do quite a few things to assist. But that does not require spending $808 billion annually to spoon-feed people in developing countries.

The West can conclusively transform the world through free trade and by communicating the message of freedom and good governance to recalcitrant countries.

Singer rightly cites Herbert Simon’s view that social capital is responsible for 90 per cent of what people earn in wealthy societies. Indeed, the level of freedom in a society is the primary determinant of its governance, and hence of its success.

As the demand for freedom must necessarily be ‘home grown’, ie. endogenous to the poor countries, methods of the sort suggested below will do far more for poverty than a trillion dollars spent on a war of freedom or on charity: (a) significant increase in the funding of high-quality students from developing countries who must then commit to return to their countries for at least five years after their education, and (b) bringing in senior bureaucrats from developing countries into long term “training-cum-secondment” roles within the local, state and federal governments of Western countries. This will enable these public servants to experience at first hand how freedom is operationalised.

The principles of freedom and good governance will then flow back to these poor countries, motivating the necessary change in social and political perspective.

There are no shortcuts to the elimination of global poverty.

* * *
These views are entirely my own, based on experience in working in Indian state governments, and do not represent the views of any organisation I work with or have worked in the past.

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