WELFARE ECONOMICS PROJECT REPORT ON A SUITABLE PUBLIC POLICY IS ABSOLUTELY NECESSARY FOR USHERING IN JUST SOCIAL ORDER

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ROLL NO.

INDIAN INSTITUTE OF PLANNING & MANAGEMENT NEW DELHI
WELFARE ECONOMICS

Welfare economicsis a branch of rainbows that uses microeconomic
techniques to simultaneously determine allocative efficiency within an economy and the income distribution associated with it. It analyzes social welfare, however measured, in terms of economic activities of the individuals that comprise the theoretical society considered. As such, individuals, with associated economic activities, are the basic units for aggregating to social welfare, whether of a group, a community, or a society, and there is no "social welfare" apart from the "welfare" associated with its individual units. Here ‘welfare’ in its most general sense refers to well being. Welfare economics typically takes individual preferences as given and stipulates a welfare improvement in Pareto efficiency terms from social state A to social state B if at least one person prefers B and no one else opposes it. There is no requirement of a unique quantitative measure of the welfare improvement implied by this. Another aspect of welfare treats income/goods distribution, including equality, as a further dimension of welfare. Social Welfare refers to the overall welfare of society. With sufficiently strong assumptions, it can be specified as the summation of the welfare of all the individuals in the society. Welfare may be measured either cardinally in terms of "utils" or dollars, or measured ordinally in terms of Pareto efficiency. The cardinal method in "utils" is seldom used in pure theory today because of aggregation problems that make the meaning of the method doubtful, except on widely challenged underlying assumptions. In applied welfare economics, such as in cost-benefit analysis, money-value estimates are often used,

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particularly where income-distribution effects are factored into the analysis or seem unlikely to undercut the analysis. It is conventional to distinguish two sides to welfare economics: economic efficiency and income distribution. Economic efficiency is largely positive and deals with the "size of the pie". Income distribution is much more normative and deals with “dividing up the pie” Other classifying terms or problems in welfare economics include externalities, equity, justice, inequality and alturism.

TWO APPROACHES :1. EFFICIENCY 2. INCOME DISTRIBUTION

Situations are considered to have distributive efficiency when goods are distributed to the people who can gain the most utility from them. Many economists use Pareto efficiency as their efficiency goal. According to this measure of social welfare, a situation is optimal only if no individuals can be made better off without making someone else worse off. There are many combinations of consumer utility, production mixes, and factor input combinations consistent with efficiency. In fact, there are an infinity of consumer and production equilibria that yield Pareto optimal results. There are as many optima as there are points on the aggregate production possibilities frontier. Hence, Pareto efficiency is a necessary, but not a sufficient condition for social welfare. Each Pareto optimum corresponds to a different income distribution in the economy. Some may involve great inequalities of income. So how do we decide which Pareto optimum is most desirable? This decision is made, either tacitly or overtly, when we specify the social welfare function. This function embodies value judgements about

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they will be more likely to do what it is that the group wants them to. attending sewing circles. but also cultural forms. It states that the more dependent a person is on a group. It refers to a set of linked social structures. pattern of interactions and customs. These conditions could include both property. history and other social sciences. exchange and power relations. maintain and enforce "normal" ways of relating and behaving. the more likely they are to conform to group "norms". capable of continually reproducing at least those conditions essential for its own existence. they will be more likely to conform to the groups norms such as selling out every day. The principle of dependence is one that has a huge role on social order as a whole. social institutions and social practices which conserve. communication relations and ideological systems of values. the 4 . Examples:An example of this would be a person attempting to join a sewing team.interpersonal utility. In this case. Social order is a concept used in sociology. committing completely to the dirtiness and crapping on their skills outside of mandatory sessions or meetings in order to gain the groups trust and respect. The concept refers to all those facets of society which remain relatively constant over time. This means that if a group means a lot to a person. If belonging to a group like this is very important to someone. The social welfare function is a way of mathematically stating the relative importance of the individuals that comprise society SOCIAL ORDER A "social order" is a relatively stable system of institutions.

it is easier for them to succeed in upholding their religion and views because their way of life is the norm for their community. The higher the observation rate of a group is. A prime example of a society with a high level of observability is Japan. This states the more norms and the more important the norms are to a society. Most offices are close quartered. such as the Amish.S. 5 . One of the main principles of social order is the principle of visibility.. This high level of visibility encourages workers to stay constantly on task lest they suffer reproaches from their supervisors. Another key factor concerning social order is the principle of extensiveness. The employees work in full sight and hearing of their supervisors. A good example of this is smaller religions based around the U. The principle of visibility refers to the extent that the behavior of group members can be observed by other members of the group. open office spaces without any partitions. the more likely the members of that group will follow the groups norms. the better these norms tie and hold together the group as a whole. Many Amish live together in communities and because they share the same religion and values.status that the group gives a person is more important than what they lose by descending to the group's metroness.

etc. The individual may encounter a situation in which he or she has to choose one group over the another. or neighborhoods. Many who have studied these groups believe that it is necessary to have ties between groups to strengthen the society as a whole and to promote pride within each group. it is a set of social institutions determining moral behaviour. Emile Durkheim. For Habermas. education. Some people belong to more than one group. and what its real basis is. Social theorists (such as Karl Marx.A SUITABLE PUBLIC POLICY IS ABSOLUTELY NECESSARY FOR USHERING IN JUST SOCIAL ORDER The issue of social order. The structure inside of these groups mirrors that of the whole society. age. it is all of these. churches. such as businesses. families. region. Others believe that it is best to have stronger ties within a group so that social norms and values are reinforced. gender. it is the relations of production or economic structure which is the basis of a social order. athletic groups. For Durkheim. ethnicity. Thomas Hobbes is recognized as the first to clearly formulate the problem. For Parsons. as well as communicative action. how and why it is that social orders exists at all. is historically central to sociology. For Marx. Talcott Parsons. sexual orientation. which sometimes causes conflict. and Jürgen Habermas) have proposed different explanations for what a social order consists of. physical attractiveness. They are defined as "a 6 . In every society people belong to groups. occupation. There are networks and ties between groups as well as inside of each of the groups that create social order. religion. it is a set of shared social norms. to answer which he conceived the notion of a social contract. "Status groups" can be based on a person's characteristics such as race.

The unregulated interaction of rational selfishness produces an unwanted outcome. being planned by more than one person. may actually be preferable to those planned by a single person. It is considered the distribution of prestige or "the approval.". Social honor can also be referred to as social status. Considering this. Individuals pursuing self-interest can make predictable systems. This means that predictability may be possible to achieve without a central governments control." One example of this hierarchy is the prestige of a school teacher compared to that of a garbage man. These stable expectations do not necessarily lead to individuals behaving in ways that are considered beneficial to group welfare. but it does not always increase social order. some enjoying high ranking and some low. When Social Honor is referred to as Social Status it deals with the rank of a person within the stratification system." stated in "Theories of Social Order" by Hector and Thorne. That is. The case most often is that people associate social honor with the place a person occupies with material systems of wealth and power.subculture having a rather specific rank (or status) within the stratification system. Thomas Schelling studied neighborhood racial segregation. the outcome is segregation rather than integration. These systems. Order does not necessarily need to be controlled by government. societies tend to include a hierarchy of status groups. (citation needed) His findings suggest that interaction can produce predictability. or deference a person or group is able to command by virtue of his or its imputed qualities or performances. In his researching he found that "when all individuals pursue their own preferences. Since most of society finds wealth and power desirable they respect or envy people that have more than they do. Status 7 . admiration. respect.

An example of Achieved Status would be Oprah Winfrey and her empire. or parental social standing. An example of Ascribed status would be heiress to the Hilton dynasty Paris Hilton. one can belong to a status group based on one's race and a social class based on financial ranking. For instance. Social values are our desires modified according to ethical principles or according to the group we associate with: friends. Status can also be ascribed. such as race. This may cause strife for the individual in this situation when he or she feels they must choose to side with either their status group or their social class. there are individual values. Other cultural differences such as language and cultural rituals identify members of different status groups. smaller groups. which pertains to something that we think has worth and then there are social values. a wealthy African American man who feels he has to take a side on an issue on which the opinions of poor African Americans and wealthy white Americans are divided. which is when a persons position is gained on the basis of merit or in other words by achievement and hard work. family. A certain lifestyle usually distinguishes the members of different status groups. around the holidays a Jewish family may celebrate Hanukkah while a Christian family may celebrate Christmas. Values can be defined as "internal criteria for evaluation". sex. Inside of a status group there are more. 8 . and finds his class and status group opposed.can be Achieved. which is when a persons position is assigned to individuals or groups without regard for merit but because of certain traits beyond their control. or co-workers. For example. For example. Values are also split into two categories.

between the upper class and lower class when laws and rules are put in place that do not conform to the values of both classes. An exception to the idea of values and norms as social order-keepers is deviant behavior." as stated in Theories of Social Order by Hechtor and Horne. and they can be passed down from generation to generation. Tension can form. those who hold positions of power and authority are among the upper class. One argues that it is achieved through outside influence and control and the other argues that it can only be attained when the individual will 9 . Unlike values. The first theory is "order results from a large number of independent decisions to transfer individual rights and liberties to a coercive state in return for its guarantee of security for persons and their property. In societies. as well as its establishment of mechanisms to resolve disputes.or outside of oneself. therefore. There are currently two different theories that explain and attempt to account for social order. norms are enforced externally . The next theory is that "the ultimate source of social order as residing not in external controls but in a concordance of specific values and norms that individuals somehow have managed to internalize. Norms differ for each class because the members of each class were raised differently and hold different sets of values. Both the arguments for how social order is attained are very different. For this reason it is necessary for a society to have authority.Norms tell us what people ought to do in a given situation. Not everyone in a society abides by a set of personal values or the group's norms all the time. A society as a whole determines norms." also stated in Theories of Social Order by Hechtor and Horne.

or to seek some positive benefit. and choosing among them on the basis of the impact they will have. and individuals. While many of these are broadly applicable to other organizations such as private companies or non-profit organizations.g. corporate privacy policies. The term may apply to government. Policy or policy study may also refer to the process of making important organizational decisions. A policy is a deliberate plan of action to guide decisions and achieve rational outcome(s). Several definitions and key characteristics of policy have been identified within the framework of government policy. private sector organizations and groups. Definitions of policy and research done into the area of policy is frequently performed from the perspective of policies created by national governments. 10 . Policy differs from rules or law. Presidential executive orders. policies are typically instituted in order to avoid some negative effect that has been noticed in the organization. the government-focused origin of this work should be kept in mind. a law requiring the payment of taxes on income) policy merely guides actions toward those that are most likely to achieve a desired outcome. and parliamentary rules of order are all examples of policy. While law can compel or prohibit behaviors (e. Policies can be understood as political.willingly follow norms and values that they have grown accustomed to and internalized. management. The goals of policy may vary widely according to the organization and the context in which they are made. financial. Broadly. and administrative mechanisms arranged to reach explicit goals. including the identification of different alternatives such as programs or spending priorities. or public policy.

governments. it may not be possible to assess all possible impacts of a given policy. Because of the nature of some complex adaptive systems such as societies and governments. societies. in part because of policy changes that provide USD $1. the organization can limit waste and standardize the way purchasing is done. The policy formulation process typically includes an attempt to assess as many areas of potential policy impact as possible. Because the environments that policies seek to influence or manipulate are typically complex adaptive systems (e. Policies frequently have side effects or unintended consequences. benefits).g. large companies). to lessen the chances that a given policy will have unexpected or unintended consequences. In recent years. Depending on the size of the tax increase. a government may make a policy decision to raise taxes. By requiring this standard purchasing process through policy. citizens are disincentivized to earn the money that is taxed. For example. making a policy change can have counterintuitive results.500 in tax credits as well as the use of high-occupancy vehicle lanes to hybrid owners. the organization (state and/or federal government) created a positive effect (increased ownership and use of hybrid cars) through policy (tax breaks. The State of California provides an example of benefit-seeking policy.Corporate purchasing policies provide an example of how organizations attempt to avoid negative effects. in hopes of increasing overall tax revenue. Many large companies have policies that all purchases above a certain value must be performed through a purchasing process. this may have the overall effect of reducing tax revenue by causing capital flight or by creating a rate so high. 11 . the numbers of hybrid vehicles in California has increased dramatically. In this case.

and what its desired effect is. These responsibilities may include identification of oversight and/or governance structures. • A responsibilities section. or modifications to organizational behavior that the policy is creating. • Policy statements indicating the specific regulations. Some policies may contain additional sections. including • Background indicating any reasons and history that led to the creation of the policy.Policies are typically promulgated through official written documents. but can be found. Such documents have standard formats that are particular to the organization issuing the policy. While such formats differ in terms of their form. Retroactive policies are rare. providing clear and unambiguous definitions for terms and concepts found in the policy document. describing who the policy affects and which actions are impacted by the policy. requirements. indicating which parties and organizations are responsible for carrying out individual policy statements. policy documents including: • A purpose statement. outlining why the organization is issuing the policy. • A applicability and scope statement. usually contain certain standard components 12 . The applicability and scope may expressly exclude certain people. which may be listed as motivating factors • Definitions. organizations. or actions from the policy requirements • An effective date which indicates when the policy comes into force.

hence the development of equity. and laws are most likely to be effective when they are consistent with the most generally accepted societal norms and reflect the collective morality of society. A judge should always consider the underlying policies to determine whether a rule should be applied to a specific factual dispute.e. Over time. flexibility. This assumes that the true purpose of dispute resolution systems is to discourage self-help and the violence that often accompanies it.Public policy or order public is the body of fundamental principles that underpin the operation of legal systems in each state. identifies the best guidelines for resolving the immediate dispute. Similarly. equality. a return to the policies forming the basic assumptions underpinning potentially relevant rules of law. The more certain and predictable the outcome. Law regulates behaviour either to reinforce existing social expectations or to encourage constructive change. the less incentive there is to go to court where a loss is probable. neutrality. If laws are applied too strictly and mechanically. But certainty must be subject to the needs of individual justice. openness. The discipline of institutional economics has gained increasing prominence in recent years because standard economic explanations often fail to come to grips with major contemporary policy issues such 13 . In performing this function. certainty. This addresses the social. becoming more clearly defined and more deeply embedded in the legal system. if there is an entirely new situation. Cappalli has suggested that the critical values of any legal system include impartiality. moral and economic values that tie a society together: values that vary in different cultures and change over time. citizens have to be encouraged to use the court system. i. and growth. the law cannot keep pace with social innovation. these policies evolve.

public choice. and that social action often produces unforeseen and deleterious side-effects. But a growing number of economists have turned away from the neoclassical paradigm. evolutionary or institutional paradigms of economics. Thus. Research in Social Problems and Public Policy seeks to improve the balance by adding a focus on important and powerful institutions. influenced environmental policies. This insight has. many people think of "social problems" as involving poor and powerless individuals in society. and mismanaging. the transformation of the failed socialist command economies and the governance problems of the new industrial economies.as economic reform in affluent but dysfunctional economies. Such organizations often play key roles in managing. they have developed Austrian. In recent decades it has been more widely realized that human knowledge is limited. Instead. similar concerns have not yet had much impact. the ways in which some of today's most important social problems are handled by the public policy system. which is based on the assumption of ‘perfect knowledge’ and which inspires confident intervention. always incomplete and fallible. but ignorant social engineering. Even today. Institutions must underpin increasingly complex webs of human interaction because interaction and coordination depend on tenuous links of trust. Institutional economists point out that rule systems matter greatly in explaining these problems and that institutional innovation is central to finding sustained solutions. it is now widely accepted that tangling with nature may produce consequences that no one foresaw. all of which caution about the side-effects of resolute. 14 . for example. In economic and social affairs.

directs the state to promote the welfare of the people by securing “a social order in which justice. by abolition of poverty and the structures of exploitation. the political system cannot be said to have transformed the lives of people — by securing their livelihood. One of the major achievements of independent India is the parliamentary democratic system that was instituted along with a Republican Constitution. in its Directive Principles. economic and political. The participation of ordinary people in the elections at all levels is marked by sustained enthusiasm. it is creditable that parliamentary democracy has retained its vitality over the years. which reflects the aspirations of the Indian people in their struggle for national independence. The Constitution of India. This is mainly due to the people and the popular struggles and democratic movements.As India completes 60 years of Independence. the prospects for democracy in India have not shrunk but grown since Independence. This is particularly so in the States where the Left has strong influence.” 15 . Despite the narrow basis and the class constraints on the democratic system in a developing capitalist society. social. However. Unlike the experience of many other newly independent countries. The Constitution provided the scope for people’s participation and a voice in politics. and providing equity with economic growth. shall inform all the institutions of the national life. we can look back with a considerable degree of pride at the shaping of a democratic political system in the country.” It calls for the state to strive “to minimise the inequalities in income” and to see that the “control of the material resources of the community are so distributed as best to subserve the common good” and to ensure that the “operation of the economic system does not result in the concentration of wealth and means of production to common detriment.

growing malnutrition with falling per capita intake of foodgrains. How do the millions of India benefit or prosper? —that is the real test of any policy. Nehru set out the test for public policy: “The first thing is the good of the Indian masses and everything will be judged by that standard. the vision set out in the Constitution was articulated by Prime Minister Jawaharlal Nehru whose contribution to the building of a modern. disease. there is no doubt that the working of the state and policy making are clearly contrary to these goals set out in the Constitution. India has the largest mass of rural poor in the world. political or otherwise. The political system today.” But the Nehruvian vision. that we may put forward. foundered on the class realities of developing capitalism without a democratic social transformation. It crippled the possibilities of creating a socially just economic order.Six decades later. Six decades after Independence. economic. this unfinished task perpetuates the grossly exploitative socio-economic order in the countryside. which has increasingly distorted the original vision of the freedom movement. secular country was a pivotal one. Nehru’s vision In the early years after Independence. 16 . who are trapped in the blighted cycle of poverty. and deprivation. malnutrition. and the looming threat to food security. Most of the conflicts and crises in our system can be traced to this fundamental contradiction: political democracy coexisting with concentration of wealth and economic inequalities. is more or less indifferent to the spectacle of peasant suicides. even though the Congress party today pays scant heed to his legacy. The failure to implement land reforms and confront head-on the feudal forces was one glaring instance. however sincere and relevant.

an unavoidable necessity and a concession to electoral compulsions. is the paradox: a thriving ‘democracy’ in which the people are powerless to change the exploitative and unequal economic order. If the quest to become a ‘great power’ with American help persists. there can always be some ‘poverty alleviation’ programmes. Policy making is increasingly suborned to favor this thin stratum of the super rich and their patrons — international finance capital. The entire gamut of policies is meant to subsidies the rich and powerful. This is the paradox that is going to imperil many of the democratic gains made since Independence. For the poor. and boasts of creating billionaires at a rate higher than most countries. then. The political system should be compelled to take up policies that tackle the 17 .Policy making by the ruling classes enamoured of neo-liberal prescriptions is immune to human misery so long as GDP growth rates remain high. National sovereignty itself will be seen as an outdated concept by the dominant classes and their political partners. We are approaching a position where the new definition of democracy will be change of governments without any change in economic and social policies. This. This is mainly due to the people and the popular struggles. As we mark 60 years of Independence. It will affect all spheres of national life. Such a situation will lead to the erosion of the democratic system itself. nothing much will be left of an independent foreign policy. It is necessary to reverse this profoundly anti-democratic trend. the ruling classes and the political parties that represent them are openly celebrating a path of development that makes the rich super rich. People’s role: The prospects for democracy in India have not shrunk but grown since Independence.

This challenge mounted by the Hindutva forces still exists given the penetration of these forces in the institutions of the state during their stint in power. Its enveloping tentacles affect all levels. The entire gamut of economic and fiscal policies is geared to benefit the speculators in finance capital and those who have the power to corner resources. and going in for a big expansion of the public distribution system and generation of employment in the rural areas. desisting from the harmful approach of corporatization of agriculture. The secular principle of the Indian state. The political-bureaucratic-business-contractor nexus. The political system has survived such anti-secular assaults but creeping communalism continues to weaken its secular basis. large sections of the minorities have never felt fully secure and have been subjected to periodic violence. has been under serious assault since the fifth decade of Independence. The struggle to make the political system more meaningful in the lives of the Indian people requires that the struggle to restructure CentreState relations to move towards a more federal system is carried 18 . Privatization will only worsen the non-availability of basic services for the people. which is also embedded in the democratic political system. which siphons off public funds and loots the public exchequer. It is shameful that the Indian state cannot provide for public health expenditure even to the extent of the poorer sub-Saharan countries. has to be dealt with sternly. As a consequence of this erosion of secularism. including local bodies. Only the Left has some capacity to be immune to this phenomenon and to tackle it.deep agrarian crisis — increased public investment in agriculture. This is at present beyond the will of any of the ruling parties.

the political system is becoming the mainstay of the privileged and the dominant classes. The four varnas are brahmana. In classical India (whose boundaries stretched far beyond today's limits) social order. With liberalized rampant capitalism becoming the order of the day. From such a position of security and happiness one could more easily advance in life. This is a danger to democracy and the goal of social justice. as described in Vedic literatures. Increasingly. and sudra. one's position in society was based on one's qualities and propensities. ksatria. and remains. As we proceed to the seventh decade of Independence. the battle should be joined to make democracy aligned to the quest for social and economic justice. though. to keep society in a state of peace and prosperity. varna (occupational divisions) and asrama (social divisions). It has two parts. One could change position through qualification.forward. However. It is necessary to stem this corrosive influence and wage the struggle within the political system to end the pernicious embrace between money and politics. The social system was and is called varnasrama. These groupings were more descriptive than prescriptive. once one identified within a group one was expected to live by its tenets and expectations. since position was not birthdependent. The names and descriptions of the classes and orders persist till today from the ancient Vedas. Decentralization of power and decision making needs to be pushed forward at all levels. The purpose of the system was. 19 . vaishya. was not a familial caste system. Rather. the political system is being suborned to serve its interests.

Roughly. And similarly. or reactions which could have reasonably been foreseen. For example. trained in education and the area of instruction. The four asramas are brahmachari. contained in Part IV of the Constitution of India. of good character. Public policy-making in India has frequently been characterized by a failure to anticipate needs. and sannyasa. vaishyas are in business. semirenounced life. thus impeding economic development. grhastha. each person is expected to live by the standards of his or her position. that an elementary school teacher must be degreed. just as in modern society. Policies have been reversed or changed more frequently than warranted by exogenous changes or new information. to be kept in mind while framing laws and policies. Brahmacaris are single students. and those who elect sannyasa remain henceforward renounced. but the principles laid down therein are considered fundamental in the governance of the country. one's social position is by choice. impacts. These provisions. making it the duty of the State to apply these principles in making laws 20 . This is similar to the requirement. Under varnasrama. for example. ksatriyas are military and management. qualities. are not enforceable by any court. the proscription against adultery is not just a rule of religions but a societal principle for the benefit of both individuals and communities. and of a nature compatible with the role. for the peace of society. brahmanas are priests and teachers. grhasthas are those in family life. and propensity.Membership in these occupational categories depends on education and training. vanaprasthas are in retired. and sudras are the workers/employees. a holder of a teaching certificate. The Directive Principles of State Policy are guidelines to the central and state governments of India. vanaprastha.

foreign policy. They aim at achieving social and economic democracy for establishing a welfare state. the Rowlatt Acts gave extensive powers to the British government and police. environmental. economic welfare. who were seeking independence and their own government. Also." The Indian constitution was also influenced by the United Nations Universal Declaration of Human Rights. justice economic and legal. and socialistic. The idea of such policies "can be traced to the Declaration of the Rights of Man proclaimed Revolutionary France and the Declaration of Independence by the American Colonies. The principles have been inspired by the Directive Principles given in the Constitution of Ireland and also by the principles of Gandhism. The public opposition to this act eventually led to mass campaigns of nonviolent civil disobedience throughout the country demanding guaranteed civil freedoms. In 1919. the Directive Principles of the Indian constitution have been greatly influenced by the Directive Principles of State Policy.to establish a just society in the country. The concept of Directive Principles of State Policy was borrowed from the Irish Constitution. Indians. and relate to social justice. political protection and of administrative. The makers of the Constitution of India were influenced by the Irish nationalist movement. Directive Principles are classified under the following categories: Gandhian. restrictions on public gatherings. and allowed indefinite arrest and detention of individuals. and limitations on government power. monuments and peace and security. and intensive censorship of media and publications. warrant-less searches and seizures. Hence. and legal and administrative matters. were particularly influenced by the independence of Ireland and the development of the Irish constitution. the directive principles of state policy in Irish constitution were looked upon by the people of 21 .

Congress leaders appointed persons from diverse political backgrounds to responsibilities of developing the constitution and national laws. the task of developing a constitution for the nation was undertaken by the Constituent Assembly of India.India as an inspiration for the independent India's government to comprehensively tackle complex social and economic challenges across a vast. representation for religious and ethnic minorities. While members of Congress composed of a large majority. A notable development during that period having significant effect on the Indian constitution took place on 10 December 1948 when the 22 . the Congress leaders took examples from the constitution of the erstwhile USSR. Notably. In 1931. while Jawaharlal Nehru and Sardar Vallabhbhai Patel became chairpersons of committees and sub-committees responsible for different subjects. as well as socio-economic rights such as the minimum wage and the abolition of untouchability and serfdom. Committing themselves to socialism in 1936. which inspired the fundamental duties of citizens as a means of collective patriotic responsibility for national interests and challenges. In 1928. Bhimrao Ramji Ambedkar became the chairperson of the drafting committee. composing of elected representatives under the presidency of Rajendra Prasad. would guarantee rights deemed fundamental. the Indian National Congress (the largest Indian political party of the time) adopted resolutions committing itself to the defense of fundamental civil rights. diverse nation and population. and limit the powers of the government. the Nehru Commission composing of representatives of Indian political parties proposed constitutional reforms for India that apart from calling for dominion status for India and elections under universal suffrage. When India obtained independence on 15 August 1947.

They also aim to establish social and economic democracy through a welfare state.United Nations General Assembly adopted the Universal Declaration of Human Rights and called upon all member states to adopt these rights in their respective constitutions. they shall not be invalid on the grounds that they take away the Fundamental Rights. Besides. though not justiciable. theorized as a yardstick in the hands of the people to measure the performance of the government and vote it out of power if it does not fulfill the promises made during the elections. if the DPSP aims at promoting larger interest of the society. Both the Fundamental Rights and the Directive Principles of State Policy were included in the I Draft Constitution (February 1948). DPSPs aim to create social and economic conditions under which the citizens can lead a good life. In case of a conflict between Fundamental Rights and DPSP's. Article 31-C. Even the judiciary has to keep them in mind in deciding cases. the courts shall have to uphold the case in favour of the DPSP. The Directive Principles are non-justifiable rights of the people. The Directive Principles. inserted by the 25th Amendment Act of 1971 seeks to upgrade the Directive Principles. all executive agencies should also be guided by these principles. being prepared by the Drafting Committee. the II Draft Constitution (17 October 1948) and the III and final Draft Constitution (26 November 1949). If laws are made to give effect to the Directive Principles over Fundamental Rights. It shall be the duty of the State to apply these principles in making laws. 23 . They act as a check on the government. are fundamental in the governance of the country.

The following section on the attributes of a good policy-making process draws on the literature. a good policy-making process would involve due consideration of up-to-date available subject-matter knowledge and relevant data. that the literature on the public policymaking process is far less copious than the literature on substantive policy issues. power and accuracy”. 24 . and the use of available analytical tools. and on the authors’ own experience in the policy making process. What features or characteristics should a policymaking process have which. to start with the most obvious.Attributes of a good policy-making process It is interesting. if present. would lead to high quality decisions? First. One way of describing a “good” policy-making process is one that “is committed to producing a high quality decision—not any particular decision” and that “invests any decision made with a high degree of legitimacy. and indeed revealing.

theory and practice both show that decisions which are seen to have ‘legitimacy’ are far more likely to be successfully implemented. These techniques are not without their critics. Policy-making therefore nearly always means tradeoffs. and their effect on policy–making has been less than their protagonists would like to think. cost-benefit analysis etc. a revenue enhancement measure intended to develop one sector can adversely affect another (e. Fourth. Policy-making processes and structures should ensure the gathering of information on such inter-sectoral impacts. and fully informed choices between alternatives after a proper consideration of effects on different sectors. Legitimacy is both procedural and substantive. program evaluation. especially in a democratic polity. policies made ostensibly for one sector often have significant impacts on other sectors: a transport policy (e.g. losses to one group or section in exchange for (hopefully larger) gains for another. Many analytical techniques have been evolved to assist policy-makers in dealing with these issues. the analysis of trade-offs. the cess to fund the National Highway Development Project reduces the competitiveness of road transport). Procedural legitimacy is sometimes narrowly viewed as meaning that the decision is made by an authority legally authorized to make it. but 25 . the giving up of something to get something else.g. expansion of national highways in lieu of investment in rail) affects the environment. such analysis should invariably include an assessment of the "winners" and "losers" from a given policy and a strategy for dealing with likely opposition from losers to what has been determined to be the "right" policy. an environmental policy (stricter pollution norms) affects industrial development. Nevertheless. coming broadly under terms like policy analysis. these techniques are generally judged to have a positive effect on the quality of decisions made. Third.Second.

during formulation. analysis and good 26 . a degree of centralized control is necessary. A good policy making structure should. it should not be a prisoner of the current short-term priorities. The question is not whether the policy was substantively correct. provide for appropriate separation between the policy and implementation functions. Fifth. therefore. Procedural legitimacy can often be more important in securing the implementation of a policy. At the same time. so that the priorities and interests of implementers do not supplant the public interest. On the whole. of the persons who actually have to implement a policy on the ground. and implies a degree of ‘decentralization’ of policymaking. information. control over how the decision is made) or should extend to “quality control”(control over the substance of the decision) is the subject of debate. Finally. Whether this central control should be confined to “process control” (i. time constraints and conveniences of implementers. a good policy-making process should produce policies which can be executed swiftly and successfully.in practice consultation of those affected is crucial to perceived legitimacy. but the choice is partly a factor of the kind of organization and the kind of policy being made. than its substantive merits. while policy-making must remain in touch with reality and be conscious of implementation issues. Note that this point is about the legitimacy—not efficacy--of a policy.e. This requires the close involvement. in order to make the (often difficult) decisions on trade-offs and make them without undue delay. Substantive legitimacy is achieved when the persons and groups who have knowledge and expertise in the field affected by a policy are involved in formulating the policy. but whether persons who are publicly known or perceived to have subject matter knowledge were involved in making it.

a "good policy-making process" would meet the following criteria:i) the problems and issues confronting a sector are subjected to expert analysis. is extreme fragmentation in the structure. vi) policy-makers and /or their advisers have the honesty. v) those responsible for implementation are systematically involved in the process. ii) information on overlaps and trade-offs with other sectors is systematically gathered and made available to policy-makers. or advising on. iv) decisions are made with due legal authority. independence. policy. but are not allowed to take control of it. To recapitulate. iii) opposing points of view within and between sectors . Similar examples exist 27 .procedures alone are insufficient. One of the main problems with policy-making in India. after consultation of those likely to be affected. Those charged with making. analyzed and considered and those likely to benefited or harmed are identified and their reactions anticipated. intellectual breadth and depth to properly consider and integrate multiple perspectives and help arrive at optimal policy choices within a reasonable time. are properly articulated. synthesis and integration) and attributes (such as freedom from bias) which increase the likelihood of quick and sound decisions. For example. in coordination. Transport and Regions in the UK).g. the transport sector is dealt with by five departments/Ministries in the government of India whereas in the US and UK it is a part of one department (Department of Transport and Public Works in the US and Department of Environment. must possess certain skills (e. and with the involvement of knowledgeable persons in the sector(s) concerned.

Time is spent anticipating and answering parliamentary questions. Yet the policy processes and structures of Government have no systematic means for obtaining outside inputs. Partly the problem is symptomatic of over-centralization—excessive concentration of implementation powers at the higher levels of the Ministries. tend toe merge. where adequate attention has not been paid to citizen needs. Often public policy is made without adequate input from outside government and without adequate debate on the issues involved. even for closely related sectors. but the most important level (crucial for consideration of cross-cutting impacts) is that of the Secretaries to the Government of India. program formulation and policy making which creates a tendency to focus on operational convenience rather than on public needs.in the energy. the very same Secretaries spend a large part of their time bogged down on routine day-to-day administration of existing policy. Another problem is the excessive overlap between implementation. attending meetings and functions on implementation issues etc. it is also due to such officers being more comfortable with implementation matters than with policy making. However. it becomes very difficult. The best expertise in many sectors lies outside the Government. as mentioned earlier. Policymaking in Indian ministries occurs at the levels of Director and above. to align their policies in accordance with a common overall agenda. Such fragmentation fails to recognize that actions taken in one sector have serious implications on another and may work at cross purposes with the policies of the other sector. for involving those affected by policies or for debating alternatives and their impacts on different 28 . The result is that sub-optimal policies. who are their Ministers’ “policy advisers-in-chief”. Besides. industry and social welfare sectors as well. Partly.

where there is a long tradition of pre-budget confabulations with chosen members of industry. and their views lose credibility. In India. In countries like the USA. are moribund. Firstly.and anti-abortion. in the absence of good consultative structures. there are often strong advocates on both sides of a policy question—for example pro. outsiders involved in policy are usually allowed to make spasmodic or single issue inputs but are not required to sustain their interaction.groups. in the US . This is because the 29 . it would appear that almost every new policy announced by Government has “only opponents”. Secondly. he would run the risk of appearing to do an illegitimate favor. Thirdly. This makes them liable to the charge of having vested interests. there is a lack of identification of stakeholders with any policy. For example. labour and academia. Such debates not only enable an assessment of different viewpoints but also help build up a constituency in support of the policy through sound arguments. judging by the public reaction to many policy announcements. There are several reasons for a poor pre-policy consultative process. outsiders who do make themselves heard in the policy-making process are often single issue advocates. Fourthly and as a result of the first three. pro. structures for consulting outsiders either do not exist or if they do. Most developed countries have a system of widespread public debate before a policy is approved. to then disclaim any responsibility for the final decision by protesting that their advice was only partially followed. Even if a receptive civil servant were to take their views seriously. to confront trade-offs or to meet the objections of other outsiders with opposite views. This makes it easy for outsiders who were indeed consulted. the legislature subjects a new policy initiative to extensive debate not only in Committees but also in the Senate and House. Probably the only example of fairly systematic consultation of outside expertise in India is in the process of formulating the Central Budget.and anticapital punishment.

Inadequate professionalism of policy-makers and advisers: Debates have been common in India about the pros and cons of ‘generalists’ vs. Note that many successful businesses in India and abroad are headed by generalists (MBAs for instance) and the Tata conglomerate continues to operate through the generalist “Tata 30 . is in fact a specialist in analysis.e identifying problems. in incisive analysis. mainly due to excessive overlap of policy-making and implementation and to over centralization of implementation authority (discussed above). There is a school of thought which suggests that the excessive involvement of poorly informed generalists is the main cause of poor policy-making and implementation. Fragmentation has led to a widespread prevalence of the ‘blind men and the elephant’ syndrome in policy-making. and in intelligent use of information provided by specialists to frame policy options and assess their consequences. However. Policy decisions are often made without adequate analysis of costs. benefits. ‘specialists’ in Government. Inadequate time spent on policy-making. trade-offs and consequences. when it comes to the realm of policymaking and the making of tradeoffs. and hence rarely stand up and support it. His strength and training lie in being well-informed about a variety of related subjects. experience in government and the private sector suggests that this is usually best handled by an intelligent. There are several underlying causes for this:Excessive fragmentation: This has already been referred to. well-informed person who has a wide rather than narrow perspective. though not a specialist in any one field.‘winners’ from a Government policy rarely feel involved in it. trade-offs and solutions. This person could be termed the “intelligent and informed generalist” who. integration and synthesis—i.

often strong ones. are common and. one cannot conclude that policy-making suffers from weakness. not bad. is inevitable in a fractious but genuinely democratic polity like India. changes or postponements in policies.Administrative Service” to man key positions—an approach regarded as a great success. of course. And the phenomenon of political considerations intervening in decisions otherwise well taken. If it is taken as given that India is an under-performer. There can. it is nevertheless crucial that specialist knowledge be fully consulted and utilized in arriving at policy. under-performance visa-vis potential could be due to • adopting the wrong public policies • poorly implementing the right public policies. the available expertise of specialists within the Government is often under-utilized. 31 . not bad. It can be argued that merely because there are errors. The problem currently encountered is that the civil servants (who act as key policy advisers) often are not sufficiently well informed or trained to act in this manner. be valid disagreements as to what is the "right" policy in a given sector. the question then arises as to why is this the case. Disagreements. in a democratic society. A priori. This could be described loosely but conveniently as “inadequate professionalism” Inadequate consultation of in-house specialists: Even conceding that public policy-making might not be improved by insisting on specialists becoming the policy-makers. both inevitable and healthy. Vigorous debate prior to policy-making and adaptation in response to debate is good. Flexibility in policymaking to respond to evolving exogenous factors is good. Success is often the result of trial and error. For reasons ranging from ‘generalist arrogance’ to interservice rivalries between groups of specialists. in a given situation.

Measured by economic growth or attainment of human development objectives. This perception of mediocrity vis-à-vis outside experts tends to worsen the problem of inadequate consultation of even the good in-house specialists who get tarred with the same brush.Mediocrity of in-house specialists: While there are many outstanding specialists working for the Government. which could do better. 32 . It also promotes an undue respect for outside specialists and the error of accepting poorly formulated prescriptions from outsiders simply because they have a more professional or expert image. there is a widespread feeling that many in-house specialists are not on top of their specialism. This makes a study of the institutions which make policy all the more important. The making of public policy for a country as large. India remains not only an underdeveloped country but one which is usually regarded as an under-performer. populous and diverse as India is intrinsically a more complex task than in a smaller political unit.

BIBLOGRAPHY http://www.org/wiki/Decision_making http://en.wikipedia.org/wiki/Corporate_social_responsibility 33 .html http://en.wikipedia.com http://en.com/decision-making-skills.time-management-guide.google.org/wiki/Corporation http://www.wikipedia.

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