This book is, in some ways, an extension of the author's (a Harvard grad and former CEO of Procter & Gamble India) fabulous first book "India Unbound," (2002) which is an account of the political, economic and sometimes social evolution of India from the years before independence to the turn of the present century. "India Unbound" was rather fascinating because it also serves - in part - as an autobiography as the material is presented through the viewing glasses of an executive who "suffered through" socialism and is ultimately jubilant about the fruits of liberalization and "capitalism". In that book, he basically asks bureaucracy to get out of the way.
By the time he starts writing "India Grows at night" (2012), he admits to have had a change of heart and has transformed his views from from libertarian to "classic liberal." Here, he calls for a "limited" rather than a "minimalist" state. This line of thought is reflected heavily in this book. In fact, he says he didn't call the book "India grows at night while the government sleeps" because he now realizes that the government has a first order role to play in economic development (by ensuring infrastructure, law and order, regulatory reform, etc) and any growth "in spite of the government" will be flawed and unsustainable. This is pretty much what got me hooked on to the book because I have been saying similar things for the past 5 years, even when the economy was seemingly red-hot (2007-2010). My understanding has always been that that the Indian economy has been picking low hanging fruit and we'd soon hit a wall unless the government gets serious about maaaany things.
He begins the book by quoting Fukuyama (who I didn't realize is at Stanford) that "A successful liberal democracy should have three things : A strong authority to allow quick and decisive action; a transparent rule of the law to ensure that the action is legitimate; and it is accountable to the people." The book points out India's failure in all three categories (although he does acknowledge limited success in some aspects), some historical reasoning behind the state-of-affairs and also a few ideas on the types of economic and more importantly institutional reform that will be required to get out of the rut. I agree - for the most part - with his historical views on why India has traditionally had a "weak state" and why law and order has always been an issue. Such discussions (and second-guessing history) aren't just of academic interest because they define India at the present time. As an example, consider the first question Egyptians asked him when he was speaking in Tahrir square: "How do you keep generals out of politics?" Well.. we take it for granted and there is no easy answer to this question, but sustaining a peaceful transfer of power *every single time* in a HUGE, noisy and largely poor country does give us something to think about in historical terms.
The last part of the book focuses on what he thinks should be the role of a new political party as he appears to be pretty much fed up with the "grievance politics" (i.e., making the voters a victim) of the major parties and the short-sightedness of the regional ones and opines that none of the existing parties are capable of reforming out-dated government institutions. He brings up Rajaji's Swatantra party as a role model for liberal politics, which is largely justified but is sure to be off-putting to some because of the brilliant founder's (rare but) controversial schemes (hereditary education, for one). I do agree with his assessment, however, that the Swatantra party was definitely ahead of its times and that some of its core principles will have much value.
He begins the book by quoting Fukuyama (who I didn't realize is at Stanford) that "A successful liberal democracy should have three things : A strong authority to allow quick and decisive action; a transparent rule of the law to ensure that the action is legitimate; and it is accountable to the people." The book points out India's failure in all three categories (although he does acknowledge limited success in some aspects), some historical reasoning behind the state-of-affairs and also a few ideas on the types of economic and more importantly institutional reform that will be required to get out of the rut. I agree - for the most part - with his historical views on why India has traditionally had a "weak state" and why law and order has always been an issue. Such discussions (and second-guessing history) aren't just of academic interest because they define India at the present time. As an example, consider the first question Egyptians asked him when he was speaking in Tahrir square: "How do you keep generals out of politics?" Well.. we take it for granted and there is no easy answer to this question, but sustaining a peaceful transfer of power *every single time* in a HUGE, noisy and largely poor country does give us something to think about in historical terms.
The last part of the book focuses on what he thinks should be the role of a new political party as he appears to be pretty much fed up with the "grievance politics" (i.e., making the voters a victim) of the major parties and the short-sightedness of the regional ones and opines that none of the existing parties are capable of reforming out-dated government institutions. He brings up Rajaji's Swatantra party as a role model for liberal politics, which is largely justified but is sure to be off-putting to some because of the brilliant founder's (rare but) controversial schemes (hereditary education, for one). I do agree with his assessment, however, that the Swatantra party was definitely ahead of its times and that some of its core principles will have much value.
As with most books that present socio-political commentaries, I think that the true worth of this book is not in the general idea but rather the anecdotes that get strewn around. Now that the preamble is out of the way, here is a short summary of the book. I must say that because of old age and a lack of contiguous chunks of quality time, I have resorted to the habit of taking down notes while reading books, so here goes my unedited notes:
================ NOTES / SUMMARY =====================
He contrasts India's development from ancient times where, unlike China's intrusive and many times despotic rulers who "divested people of their property and rights," the ordinary person was defined by "the village, caste and the joint family," much removed from the king who didn't affect daily life. Further, unlike Europe, "diverse social groups in India had their own laws and customs" which preceded the state and that the duty of the ruler was just to "protect the respective customs and laws of this self-regulating order." Thus he makes the case that India has always had a weak state and a strong society (in contrast to China's strong state and weak society) and that "the solid society helped to check state power whereas the feeble state didn't return the favor". Thus caste, religion and kinship restricted the freedom of many ordinary people.
While he argues that the rule of the law is an "old idea in the west" and existed ever since Aristotle wrote 'the law should govern'," he also acknowledges that law originated in religion everywhere, "western juridicial systems were based on the concept of legality whereas Indian law was based on authority" (or a code of conduct) that was based on sacred texts but "custom often prevailed over the text" when administering justice. He thus claims that there has historically been arbitrariness in the application of justice in India until the British "removed uncertainty through codification," though not to the desired level of success. He then goes to talk about the pathetic state of affairs in delivering justice in India and brings up the terrible judicial delays and points out the well-known situation of cases taking 10, 20 or 30 years to resolve. Failure to effectively (and quickly) enforce the rule of the law brings about "unpredictability" (for instance, in the mind of investors) and "crony captialism" (in real estate, mining, power sector etc.). So the weakness in enforcing the law is a key impediment to the success of Indian democracy. There is a nice little section about the tension betwen the rational 'rule of the law' and the parochial 'rule of life' which I liked, but this discussion is largely academic and distracting to the main text.
He defines a strong liberal state as one "that is not an intrusive or meddling one, but rather one that has an invisible touch over its citizens." He distinguishes this from strong, unaccountable and opaque states such as those run by Mao, Stalin and you guessed it.. Hitler. He, however, calls present day India as a "Flailing state - one where it fails appallingly when it is needed (such as ensuring health, drinking water, education, law and order) and hyperactive in issues such as tying the citizen in miles or red tape and its 'inspector raj' mentality." He says that the British built sound legal and bureaucractic institutions and a very good civil service. After independence and over time, however, India's leaders did not "modernize or expand the capability of its institutions," which is especially terrible because the country's ambitions increased many-fold. Again, he focuses on excessive red-tape and an outdated bureaucracy (and civil services).
While he argues that the rule of the law is an "old idea in the west" and existed ever since Aristotle wrote 'the law should govern'," he also acknowledges that law originated in religion everywhere, "western juridicial systems were based on the concept of legality whereas Indian law was based on authority" (or a code of conduct) that was based on sacred texts but "custom often prevailed over the text" when administering justice. He thus claims that there has historically been arbitrariness in the application of justice in India until the British "removed uncertainty through codification," though not to the desired level of success. He then goes to talk about the pathetic state of affairs in delivering justice in India and brings up the terrible judicial delays and points out the well-known situation of cases taking 10, 20 or 30 years to resolve. Failure to effectively (and quickly) enforce the rule of the law brings about "unpredictability" (for instance, in the mind of investors) and "crony captialism" (in real estate, mining, power sector etc.). So the weakness in enforcing the law is a key impediment to the success of Indian democracy. There is a nice little section about the tension betwen the rational 'rule of the law' and the parochial 'rule of life' which I liked, but this discussion is largely academic and distracting to the main text.
He defines a strong liberal state as one "that is not an intrusive or meddling one, but rather one that has an invisible touch over its citizens." He distinguishes this from strong, unaccountable and opaque states such as those run by Mao, Stalin and you guessed it.. Hitler. He, however, calls present day India as a "Flailing state - one where it fails appallingly when it is needed (such as ensuring health, drinking water, education, law and order) and hyperactive in issues such as tying the citizen in miles or red tape and its 'inspector raj' mentality." He says that the British built sound legal and bureaucractic institutions and a very good civil service. After independence and over time, however, India's leaders did not "modernize or expand the capability of its institutions," which is especially terrible because the country's ambitions increased many-fold. Again, he focuses on excessive red-tape and an outdated bureaucracy (and civil services).
The 'wonders' of the reforms of '91 are then discussed and he makes a claim that captialism has a natural home in a democracy like India because such a system "nurtures entreprenuers and innovation" well and that "many state controlled Chinese companies envy many of India's private firms". However, things like property rights and a nexus between business houses, civil servants and politicians are brought about by poor governance and are especially problematic after the big growth spurt from '91. He says that since India is in transition, this is a great time to unleash reforms in many sectors and bring in good regulators to enforce fair competition.
He says India's political parties cater to a "politics of grievance", basically running on making the voter a 'victim of' one of a number of things rather than focusing on real, big problems. As the middle class expands, however, the number of people who aspire will overtake the number of people who consider themselves victims and so he hopes that higher expectations will drive progress. This politics of expectations existed before, i.e. until 1964 when Nehru died. He claims it reared its head briefly for a couple of years in the late 80's/early 90's and then gave way to the "politics of giveaways" such as the one in Tamil Nadu. He then brings up three concerns in politics ; emergence of family-based political dynasties, criminal politicians and political opposition for the sake of opposition.
Next, he narrows down on the causes of corruption : lack of freedom like the license raj (exists even now for instance in the mining industry); lack of transparency and incomplete reforms (2G scam) and giveaways/subsidies. Corruption can be controlled if "decision-making is transparent, discretion
is reduced, rent seeking opportunities are removed, punishments handed to guilty officers and if incentives are changed from a seniority system."
He recommends the setting up of a new "secular, liberal political party" in India. Its action points are "to reform key institutions of the government; decentralize power from center to states and from states to local bodies; push agenda for the second round of reforms for better economy and better governance; promote civic education in citizenship; nudge middle-class towards active engagement in citizenship. The last point is emphasized as he wants citizens to be more engaged in their local ward/communities and finally, enter politics. The new party should be transparent in its dealings and be built bottom-up.
In calling for a strong liberal state, he wants a limited state rather than a minimalist state. He was more of laissez-faire man, but seeing india's recent slow down, he things government is not a second order phenomenon but rather one that is first order and is required for sustainability and to regulate. Reminds us of the three pillars and that India got all three during independence, but couldn't handle the pressure on institutions and socialism didn't help at all. License raj is an outcome of socialism and the decline continues till today with crony capitalism. We've become a flailing state - "a weak and intrusive" one. The budding middle class is "held hostage to corruption, poor public services and governance failure". Demand for governance reform should come out of the growing middle class which should also enter politics and transform institutions crying for change.
He says India's political parties cater to a "politics of grievance", basically running on making the voter a 'victim of' one of a number of things rather than focusing on real, big problems. As the middle class expands, however, the number of people who aspire will overtake the number of people who consider themselves victims and so he hopes that higher expectations will drive progress. This politics of expectations existed before, i.e. until 1964 when Nehru died. He claims it reared its head briefly for a couple of years in the late 80's/early 90's and then gave way to the "politics of giveaways" such as the one in Tamil Nadu. He then brings up three concerns in politics ; emergence of family-based political dynasties, criminal politicians and political opposition for the sake of opposition.
Next, he narrows down on the causes of corruption : lack of freedom like the license raj (exists even now for instance in the mining industry); lack of transparency and incomplete reforms (2G scam) and giveaways/subsidies. Corruption can be controlled if "decision-making is transparent, discretion
is reduced, rent seeking opportunities are removed, punishments handed to guilty officers and if incentives are changed from a seniority system."
He recommends the setting up of a new "secular, liberal political party" in India. Its action points are "to reform key institutions of the government; decentralize power from center to states and from states to local bodies; push agenda for the second round of reforms for better economy and better governance; promote civic education in citizenship; nudge middle-class towards active engagement in citizenship. The last point is emphasized as he wants citizens to be more engaged in their local ward/communities and finally, enter politics. The new party should be transparent in its dealings and be built bottom-up.
In calling for a strong liberal state, he wants a limited state rather than a minimalist state. He was more of laissez-faire man, but seeing india's recent slow down, he things government is not a second order phenomenon but rather one that is first order and is required for sustainability and to regulate. Reminds us of the three pillars and that India got all three during independence, but couldn't handle the pressure on institutions and socialism didn't help at all. License raj is an outcome of socialism and the decline continues till today with crony capitalism. We've become a flailing state - "a weak and intrusive" one. The budding middle class is "held hostage to corruption, poor public services and governance failure". Demand for governance reform should come out of the growing middle class which should also enter politics and transform institutions crying for change.
