Globalisation and Governance in India

New Challenges to Society and Institutions

Harihar Bhattacharyya, Lion König

• Publisher: Routledge
• Year: 2015
• ISBN:
  9781317526384
• Edition: 1
• Topic: Social Sciences
• Subtopic: Ethnic Studies
• Index: Social Sciences

This book examines the impact of globalization on some vital aspects of Indian politics, its structures and processes, and identifies the challenges to globalization itself, in order to highlight India's complex and fascinating story. In 1991, India officially embraced the policy of neo-liberal reforms by signing the GATT agreement, which exposed the country, its society, culture and institutions to the various forces of globalization. Globalization as such may not be new to India, for the country has been embracing the influence of external cultures and civilisations for millennia, but the post-1991 reforms policy marked a significant shift, from a predominantly social welfare state and a command economy to a predominantly market driven one.

Through a range of disciplinary perspectives, the authors analyse how India's version of secularism, communal harmony, nationhood, the public sphere, social justice, and the rights of aboriginal communities came under attack from the forces of the new dispensation. The book goes on to show how globalisation in India has posed fresh challenges to political economy, democracy, federalism, decentralization, parliamentary system, judiciary, and the parliamentary Left.

Critically reflecting on themes in the context of India's globalisation that are local, regional, national and global, this book will be of interest to those in the fields of South Asian Politics, Globalisation, and International Relations.

1 The globalisation–decentralisation nexus The Indian predicament

Mohit Bhattacharya

DOI: 10.4324/9781315722917-1

Today, ‘globalisation’ is a buzz word used in different forums by academics, administrators, and even the non-governmental organisations (NGOs). The phenomenon of globalisation is characterised by increasing integration of the international economy through trade and relatively free cross-border flow of factors of production, as well as new information and communication technologies facilitating speedy exchange of information among nations. The world economy is being restructured not only by technological changes, but also by the geographic movement of all factors of production. This mobility has been changing the location of production and the direction and volume of flows of trade and investment among urban and regional centres as local autonomy units. No government today can ignore or escape the consequences of this phenomenon of globalisation. Expressed slightly differently, the global economy has in recent years been consistently unleashing economic and political forces strengthening both global and local pressures at the expense of the traditional nation-state. Defined narrowly as increasing economic integration of the international system, globalisation has created pressures for relocation of decision-making authority away from the state. There is a change in location or site of governance. States are willy-nilly delegating more responsibility over decision making upwards to supranational institutions or devolving decision-making powers downwards to sub-national political units. For a variety of reasons, there has been a noticeable move towards decentralisation of fiscal, political, and administrative responsibilities to lower-level governments in many countries of the world today, as governments have been seeking new ways of service delivery in response to rising public demands for public services. It has thus become essential to situate the debate on decentralisation in the context of globalisation. Until the mid-1980s the major debate was whether or not to decentralise. Today, this is no longer relevant. The question at the centre of the decentralisation debate today is how to decentralise, or in other words, what are the competing approaches for designing decentralisation? ¹

Globalisation of the world economy has been impelling cities and metropolitan areas to adapt their economic bases and cultures to the needs of international competition since the 1990s and the early years of the present century.

Against this background, many governments in the developing world started experimenting not only with new approaches to development, but also with new political, administrative, and global managements for planning and managing space-specific development programs and projects.

Decentralising authority

At the other end, the increasing interest in ‘decentralising’ authority for planning and administration to regional and local agencies, local governments, and special-purpose organisations arose from four converging forces:

1. Disillusionment with the results of central planning and control of development activities during the 1950s and 1960s;
2. The implicit requirements for new ways of managing development programs and projects that were embodied in growth-with-equity strategies that emerged during the 1970s;
3. The growing realisation during the 1980s and 1990s that with increasing social complexities, expanding government functions, and the need to respond to globalising influences, it becomes increasingly difficult to plan and administer all development activities effectively and efficiently from the central government level; and
4. Higher government’s positive response to vociferous demands for ‘autonomy’ and ‘participation’ in local developmental decisions emanating from localities and regions.

Multiple sources

The contemporary decentralisation discourse is the result of a convergence of multiple ideas. In a sense, it is a revival of the old libertarian view of local institutional development à la Mill, Tocqueville, Bryce, and others. The other impulse can be traced to the contemporary ‘democracy wave’ sweeping the globe as described by Huntington. Another motivating factor is our increasing concern today about the environment and natural resources conservation which, as revealed by many research evidences, need to be locality and people based. Also, there is now a worldwide shift of emphasis in the governance process from bureaucracy to people, implying a call for a new mode of participative, accountable, and transparent governance. Last, but not the least, even in terms of efficiency, the donor agencies and development consultants are increasingly advocating more and more people-driven, inclusive and participative management of local development projects.

Pranab Bardhan (2002) notes that decentralisation is the rage in today’s world. The important reasons suggested by him in this context are loss of legitimacy of the central state and a corresponding belief that decentralisation (as against the predatory state) can bring a range of benefits directly to the local people. It is good to have more intergovernmental competition and attendant checks and balances. In this view, decentralisation is supposed to make government more responsive and efficient. Bardhan also points out that technological changes have made it easier to arrange supply of services in smaller market areas, and that transaction costs are much lower in decentralised operations.

Bardhan and Mookherjee have further elucidated decentralisation in terms of ‘participatory democracy’. As they have argued:

From the standpoint of politics, decentralisation is typically viewed as an important element of participatory democracy that allows citizens to have an opportunity to communicate their preferences and views to elected officials who are subsequently rendered accountable for their performance to citizens. Apart from actual outcomes in terms of policies, their detailed implementation, and their impact on economic well-being, popular participation is valued for its own sake for a variety of reasons. It can promote a sense of autonomy in citizens, enhance social order by promoting the legitimacy of the state, and limit pressures for separatism by diverse regions or ethnic groups.

(Bardhan and Mookherjee, 2007: 4)

Glocalisation

In this connection, a hybridised term called ‘glocalisation’ ² has emerged in many quarters to signify a global-local mix. Marketing departments of many international corporations have come out with the latest slogan: ‘Think Globally, Act Locally’. In current usage, glocalisation has come to mean ‘the way in which ideas and structures that circulate globally are adapted and changed by local realities’, and Roland Robertson conceptualised it as “the universalization of particularization and the particularization of universalism” (Robertson, 1992).

According to the observers of the contemporary phenomenon of globalisation, the global economy has in recent times unleashed economic and political factors, strengthening both global and local pressures at the expense of the traditional nation-state.

Unlike the past fashion of dichotomisation, the decentralisation discourse today is no longer put against centralisation. The debate, instead of continuing with the old refrain of centralisation vs. decentralisation, focuses on the complementary role of the two. The final aim is not to decentralise just for the sake of it, but to ensure good governance.

However, the context of glocalisation has pronounced the dilemma of balancing the contrasting forces of centralisation and decentralisation. Decentralisation is no longer an alternative to centralisation. Both have their respective strong and weak points and should be considered together. The complementary roles of national and sub-national actors should be determined by analysing the most effective ways and means of achieving a desired objective. It does not make much sense to hope for any sort of bottom-line presumption in favour of ‘more centralisation’ or ‘more decentralisation’. Research shows that glocalisation is generating tendencies in both directions of centralisation and decentralisation with the aim of providing good governance and a stable, secure, and just government. It has been argued that centralising tendencies are likely to be more salient in countries like the United States where intrastate authority was initially more decentralised, whereas decentralising tendencies are likely to be more salient in other states that were initially more centralised like China and India. Glocalisation is creating incentives for sub-national governments to play a more active role in attracting foreign investment, promoting trade, providing infrastructure, and enhancing human capital; yet on the other hand, it is promoting various forms of centralisation by increasing the importance of macro-economic policy levers, especially monetary policy and other central bank–sponsored fiscal policies.

Globalisation–decentralisation: pros and cons

In this respect, one has to appreciate that the parallel between globalisation and decentralisation is quite close. The management of decentralisation calls for strong national action, just as the management of globalisation requires strong international interventions. Also, like globalisation, decentralisation carries a potential for large overall benefits, as well as risks and losses for the more vulnerable areas and groups. Internally as well as externally, the intermediate administrative space is shrinking. In the nineteenth-century state, this space was normally occupied by the province, acting as intermediary between the national government and the local ones. The intermediate administrative entity typically enjoyed a double monopoly position: as the sole interpreter of government policy vis-à-vis local governments, and as the sole provider of information and of upward feedback to the centre. With the reduction in economic distance within countries, this state of affairs has been changing.

Usually, decentralisation is looked at from the ‘supply’ side of the spectrum – how does the centre delegate or devolve powers and resources to decentralised units. But an enduring and sustainable scheme of decentralisation has to be demand driven, or, in other words, there has to be an effective demand from the local populace for a decentralised system of administration which the people would like very much to operate themselves zealously and fairly autonomously. Thus, the understanding of only the national context of decentralisation, as has been the practice in the past, is not enough under today’s circumstances. The contemporary situation calls for a greater understanding of the sub-national (especially the local) context. In this respect, however, there is little understanding at higher levels of how policy processes and decision-making take place at the local level. It is an imperative necessity, therefore, to probe into the ‘anthropology of the local state’ by gathering empirical data on the variations among local political structures, leaderships, and institutions. This would apply to both urban (municipal) and rural (panchayat) local government institutions.

The impact of globalisation

The literature on globalisation and its impact on country situations is vast. ³ The theme of the globalisation–decentralisation nexus has also been critically reviewed by many researchers. ⁴ Regarding the impact of globalisation, ⁵ there have usually been two major concerns. The first major concern is that globalisation leads to a more iniquitous distribution of income among countries and within countries. In this respect, one has to be more cautious in making any sweeping a priori judgment. As Pranab Bardhan (2007: 3852) comments while comparing the impact of globalisation on Chinese and Indian economies, “It is time for a great deal of caution and reasoned and rigorous empirical analysis before we pronounce judgments on the effects of globalisation on poverty and inequality […]”. Bardhan particularly refers to the paucity of “reliable studies” in both China and India, testing “a causal model liking globalization with inequality”. Pointing out methodological problems in this regard, Bardhan argues:

At least two major problems beset the empirical analyst in this matter. One is that so many other changes have taken place in the last quarter century in these two countries, it is difficult to disentangle the effect of globalization from that of other ongoing changes (like technological progress – often skill-biased – demographic changes or regulatory and macroeconomic policies). Secondly, in both countries there are reasons to suspect that economic inequality (or its rise) is underestimated because of a widely-noted fact facing household surveys (in many countries) of large (and increasing) non-response by rich households. It is also difficult to compare China and India, as most of the inequality data that are cited in this context usually are for income inequality for China and consumption expenditure inequality for India (as the NSS does not collect income data). The latter two disparate sources do show a rise in expenditure inequality in both countries in the last decade or so. But, as we have suggested, this rise may be an underestimate, and there is very little analysis as yet to show that this rise is primarily due to globalization.

(Bardhan 2007: 3851)

Globalisation’s second ‘discontent’ is related to the fear about loss of national sovereignty, and it is not wholly wrong to suggest that today most countries are finding it increasingly difficult to follow independent domestic policies.

The argument that globalisation leads to inequality is based on the premise that since globalisation emphasises efficiency, gains will accrue to countries – particularly advanced Western industrialised countries – which are favourably endowed with natural and human resources. The technological base of these countries is wide and highly sophisticated. Although trade benefits all countries, greater gains accrue to the industrially advanced countries. This is the reason why even in the present trade agreements, a case has been built up under the World Trade Organization (WTO) regime for special and differential treatment in relation to developing countries.

There are two changes with respect to international trade which may work to the advantage of the developing countries. First, for a variety of reasons, the industrially advanced countries are vacating certain areas of production. These can be filled in by developing countries, pursuing a more efficient cost-minimising production process. Second, international trade is no longer determined by the distribution of natural resources. The role of human resources has emerged as more important. Specialised human skills aided by improved information technology are going to be the determining factor in the coming decades.

Productive activities are becoming ‘knowledge intensive’ rather than ‘resource intensive’. Although there is a divide between developing and advanced countries even in this area – sometimes called the digital divide – it is a gap which needs to be bridged. In the context of the globalised economy, developing countries like India have to pursue an imaginative policy of creating and fostering the requisite specialisation to ensure improved productivity and faster growth.

Fears have been expressed that globalisation will lead to widening income gaps within the countries as well. This can happen both in the developed and developing economies. Even within a country, globalisation may benefit differentially those who have the skills and the technology. A higher overall growth rate in an economy can be achieved at the expense of declining incomes of people in ‘depressed regions’. If the growth rate of the economy accelerates sufficiently, then part of the resources so generated can be diverted in a planned way to modernise and re-equip people in poorer or lagging regions.

Fear of loss of national autonomy in the pursuit of economic policies in a highly integrated world economy is not without justification. Capital, technology, and skilled manpower are fluid; they will move where the benefits are greater. In a globalised world, as the nations come together in the political, social, or economic arena, there is bound to be some sacrifice of sovereignty. The constraints of a globalised economic system on t...

Table of contents

• Cover
• Halftitle Page
• Routledge Page
• Title Page
• Copyright Page
• Contents
• List of illustrations
• List of abbreviations
• Glossary
• Preface and acknowledgements
• Foreword
• Introduction
• 1 The globalisation–decentralisation nexus: the Indian predicament
• 2 Changes in Indian politics until the 1990s: issues and trends
• 3 Cultural globalisation in India: towards a ‘third space’
• 4 Challenges to democratic governance in India since the 1990s: an ‘unfinished symphony’
• 5 The new political economy of judicial review in India
• 6 Globalisation, extremist violence, and the Indian Left: a critical appraisal
• 7 Policing in India: a failed case of institutional reform?
• 8 The problems of Statehood in Indian federalism: a case for territorial pluralism
• 9 Regional movements in India: evaluating Telangana and Uttarakhand
• 10 Governing India’s localities: limits of structural and governance reforms
• 11 Conclusion: India’s second ‘tryst with destiny’
• List of contributors
• Bibliography
• Index