January 11, 2016

MoCapitalism 2016

This Open magazine article argues that "...the National Democratic Alliance (NDA) in power has indeed notched up some successes at the executive level, ones that go underappreciated. The Government’s failure is one of poor communication."


IDFC Institute's Vivek Dehejia weighs in on government strategy:


“ '‘Big bang’ or ‘shock therapy’ looks good on paper, but more often you have a backlash when this is put into practice and such policies rarely work. Commentators seem hung up on it. Margaret Thatcher and Ronald Reagan are wrong examples to cite. Thatcher needed a war (in the Falkland Islands) to begin implementing her agenda,' says Vivek Dehejia, a resident fellow at IDFC Institute, a Mumbai think-tank.

The example of subsidy reforms here is relevant. While it makes perfect economic sense to end all subsidies and transfer lump- sums to citizens, this step is now being rolled out but in a carefully calibrated sequence. From LPG to scholarships to pensions, benefits to citizens are being given directly to people. But it is unlikely that all subsidies will be stopped and a single payment given instead. That is simply not workable.

'In a democratic polity where you have to take people along with you, the Government is likely to carry out reforms gradually, in a step by step fashion. Except in a time of crisis— political or economic—when sudden steps are likely, reforms are bound to occur in a gradual manner,' adds Dehejia, whose doctoral work at Columbia University in the 1990s focused on the ‘shock therapy versus gradual reforms’ debate in Eastern Europe and the former Soviet Union."

    Topic : Transitions / In : OP-EDS
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