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Development ‘Outsourced’

June 7, 2012

Atul Sood Jawaharlal Nehru University

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Development Outsourced?

Has the meaning of Development or its implementation strategy changed in these times of globalization?

Title suggests yes – Q - what is the nature of current development - its goals and the instruments chosen to achieve this goal.

Trinity of Globalized Nation States

State, Civil Society, Market – relationship is complex, blurred and negotiated

Dichotomy of State Versus Market

Relationship between State and Civil Society evolving

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State and Market

State has co-existence of ‘specific’ intervention in the social and economic spheres and at the same time it is an active player in the discourse on the retreat of the state

The state promotes metropolitan regions, encourages FDI, influences investment flows, introduces user fees, withdraws subsidies, modifies the income support programs and alters the institutional structure

Reallocation of tasks performed by the state to non-governmental and private agencies and a redefinition of the public–private divide

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State and Civil Society 3 phases

Early years of nation building (stability, security, sacrifice) and bringing the poor in

Here, state was the soul of everything. It had to provide education, health, infrastructure, employment and what not. The role of force of change was to raise the consciousness of people to ‘demand’ what is due from the state and ensure ethics in social life. Political parties played this role.

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State and Civil Society

1980s and early years of reform - discourse on development about neglect of social sector, negative impact of reform, human face of change, left out populations, increasing the capacity of people, empowerment....

In this phase of development bypassing the poor main focus of creating a consciousness amongst people, against the euphoria of market mantra - KSPP in Kerala, PSM etc – emergence of ‘independent’ actors of change – professional approach to social change in response to more professionally managed policy making – rise of technocracy

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State and Civil Society

Apparent over the past 10-15 years or so that so-called free markets can only begin to work in particular institutional frameworks and will only begin to have broadly acceptable distributional outcomes where societies are not beset by high levels of social exclusion

On exclusion the State has conceded its limitations, is willing to seek active support of social actors, organisations. Access to the people is the key - transfer responsibility to the social organisations for getting results –SLOGAN - Civil Society as Panacea –NGOs replacing the state's service provision and social care

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How is this being done?

Content and direction of policy

Change in the meaning of Policy

Through Institutional Change

Complex set of changes brought together in the norms and criterion related with how resources are mobilized, transferred and utilized

Introducing New Instruments - PPP

Content and Direction of Policy

Current policy approach privileges a privatized method of development and problem-solving while ignoring and aggravating social inequalities

Characterising India's 'Sustainable Growth’ The Story of Water, Forests and Land

National Water Policy (1987 & 2002)

The Scheduled Tribes and Other Forest Dwellers (Recognition of Rights) Act of 2006

The Draft National Land Acquisition and

Rehabilitation and Resettlement Bill 2011

What Informs these Legislations?

Three Acts provide an interesting entry into the methods used by the state to resolve the contradictory impulses of growth and sustainability.

What the Indian state appears to be looking for is something that does not restrict the propulsion of growth while at the same time provides legitimacy to the ongoing strategy of growth.

Meaning of Policy - Technocratic View

Policy is about? – what needs to be done to develop efficient market economy is by and large known.

Only concern of Policy is -Implementation

Shortcomings in implementation Weakness in policy design Poor implementation capacity Disruptive power of short term

transition problems Lack of political will

Way out of implementation problems?

Failure due to weak institutions, therefore, strengthen the institutional capacity of the implementing agency, encourage good governance (co-ordination, accountability, managerial propriety)

Rhetoric of ‘selectivity’ and objective conditions of ‘good governance’

Institutional Change Fiscal Restructuring

transfers from the central government to the state governments are based on mobilisation of own resources by the state governments;

economic sustainability appears as the chief criterion for ‘success’ of programs, schemes, grants;

there is a dominant concern with efficiency in financial allocations, even in the social sector, leading to privatisation via public-private partnership;

attempt is to do such institutional reform that creates enabling environment to attract outside funds in support of development efforts

Centralization There is a inherent process of centralization in

place with increasing control of the Centre as reflected in nature of grants decline in overall transfers increasing expenditure responsibilities of the states increase in committed expenditures increase in relative command over total resources by

the Central government in relation to its expenditure

There is accentuation of imbalances both vertical and horizontal imbalances

Resource Transfers

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GBS to the Plan

GBS To Central Plan (60%)

Central Sector

Schemes

CSS/CP Schemes Discretionary Plan

expenditure of the Centre on development schemes in areas falling under state's

domain

Thro State Government

Central Organisations; State / District

entities and local bodies

GBS to State Plan includes SCA and SPA (40%)

Normal Central Assistance thro

Gadgil formula ( includes now SPG and SCA)

ACA Schemes (specific Purpose Schemes)

Another Dimension of Institutional Change - PPPs

To meet the challenges of ‘implementation’ seek partnership from private sector and civil society.

National Rural Health Mission; In education; Urban Governance and Reform

When and Where do PPPs Work?

Technically - key concern with PPP is whether the efficiency gains in a PPP more than offset the higher private sector borrowing costs

PPP cannot be viewed as substitutes for good governance. Rather good governance is a pre-requisite for the success of PPPs.

PPPs are perhaps more appropriate for economic infrastructure projects that yield high returns, rather than purely social infrastructure projects.

PPPs PPP is different from participation by grass root

actors; PPP requires governance reforms

Several states in India have taken the lead in using PPP approach, without making the effort to set up the necessary institutional framework as has been done in other countries

If PPPs functions in non-competitive environment statutory regulatory bodies need to be set up; Other issues - risk allocation, designing of PPP agreements and choosing the right areas in which PPP approach is valid

Defense of Growth

The legislative changes along with new principles of governance like decentralized decision-making, public private partnership, and stakeholder consultations for the Indian state, together provide a defense for 'growth'.

It is believed (?) implicitly in these legislative and institutional change that adequate response to the widespread discontentment of a population distressed with methods of land acquisition, underemployment, food insecurity, limited benefits of growth, poverty, poor infrastructure of water, public health, sanitation, housing, education and food is to build to highways, bridges, dams, malls, supermarkets, condominiums, gated communities, airports, parks, private cities and so on.

Growth or Social Welfare?

In this neoliberal phase 'growth' is the legitimizing principle that the state uses to rationalize its actions in comparison to 'social welfare' in the earlier years. The regulatory changes are made to meet this challenge and not the challenges of water scarcity, loss of habitat and livelihood for the forest dwellers or displacement and dislocation of rural poor from their lands.

Challenges and Questions

The idea of 'public interest‘is often in opposition to the interest of the poor, marginalised, Dalit and tribals.

Has public interest become a euphemism that stands as a proxy for the interests of national and global capital?

Are democratic decentralization and stakeholder claims the institution and process through which this 'public interest' reworks itself?

What are we seeking? Partnership in Development

The policy process has to be inclusive, transparent and participative.

A relook at economic Reform process not in technocratic terms -- Reform as a bargaining process

Not farewell to Growth but think beyond Markets.

Politics in Command

Politics is at the Centre of policy making process

Lack of political will is not slippage but calculated response to local political realities – wisest course of action in given circumstances

Development perspective (goals) and instruments cannot be outsourced