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Working Papers | 1994

Defunct Economists and Economic Policy Reforms in India

Patibandla Murali

In General Theory of Employment, Interest and Money, J.M.Keynes made the observation-" …the ideas of economists and political philosophers, both wen they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." The approach of the present policy regime in India fails to see that a free market economy is sustainable only in the presence of minimum necessary institutions. This paper brings out a few issues in this respect.

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Working Papers | 1994

Adjusting Education Policy: Opportunity for Institutional Reform

Vijaya Sherry Chand

Educational policy-making has been motivated in independent India by a concern for equity and the belief that education is an instrument for reducing social inequalities. However, in spite of impressive achievements in school enrollments and access to higher education, the phenomena of out-of-school children, high drop-out rates and widespread illiteracy continue to provoke concern. With adjustment now underway, fears have been expressed that these problems may become even more intractable. This paper reviews the relationship between adjustment and educational policy, and the ways in which adjustment can affect educational outcomes. While it is too early to assess the full impact of adjustment on education in India, the experiences of other countries have indicated the need for containing the immediate negative impact. Policy making has already responded in this respect with protection of primary education allocations, external funding for additional projects aimed at achieving basic education for all, and financial stringency in the area of higher education. The history and persistence of basic education-related problems and the increasing pressures on financing higher education since the 1970s, indicate that problems in these areas have their roots in pre-adjustment structures and practices. Therefore, it is necessary not to let attention be diverted by responses which have focussed on financing of education or specific programmes initiated under social safety net adjustment credits. Rather, the period of transition should be seen as an opportunity for initiating institutional reform. Three themes are highlighted here as areas requiring debate – (a) decentralization, less standardization and teacher development, especially in the context of primary education (B) 'privatization' of higher education, and (c) future linkages between education and employment. Such reform is necessary for a new and more “basic” thrust towards equity in educational policy, and for evolving a system of higher education more relevant to the emerging economy.

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Working Papers | 1994

Review of Malaysian Telecom Sector: Assessment of Policy Changes

Rekha Jain

The Malaysian economy has been growing rapidly, with concomitant demand for telecom services. With a view to reducing the role of the government in economy and introducing efficiency, the government planned to corporatize public sector organizations as a first step forward privatization. The telecommunication sector was chosen as one of the initial government departments to be corporatized and is experience was going to be used as a basis for deregulation and privatization in other state controlled sectors. In 1987, legislation was enacted to bring in major reforms in the telecom sector. Malaysia was the first ASEAN country to introduce such reforms. Due to the pervasive effect of telecom in the economy, management of this initiative was of interest in various quarters. This paper documents the state of Malaysian telecom sector and highlights the policy changes that have been initiated since 1987. These changes range from deregulation to privatization of the state owned telecom monopoly. Experience of managing this change and comparing it with similar initiatives in other developing countries provides important guidelines to decision makers on management of reform process. The paper emphasizes that effective separation of policy, regulation and operations, presence of effective regulatory body and fair regulatory guidelines, access to capital and trained human resources is crucial to the success of the reform program. In comparision to many other developing countries (e.g. India, Thailand, Philippines etc.), Malaysia has been able to successfully implement a reform program on these dimensions.

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Working Papers | 1994

Export and Liberalization: A Simple Industrial Organization Approach

Patibandla Murali

This paper presents a simple theory towards putting forward two hypotheses that can be empirically verified with regard to the export behaviour of oligopoly firms in the post-liberalization period in selective Indian industries. These hypotheses are-(1) In the presence of import protection, large oligopoly firms export to protect high domestic market price and (2) within the size group of large scale firms, larger firms will have higher export orientation.

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Working Papers | 1994

Appropriate Measure of Real Value Added and Total Factor Productivity Growth in Indian Manufacturing

Dholakia Bakul H and Ravindra H. Dholakia

It is a widely held hypothesis that the Indian industry experienced a significant turnaround in its Total Factor Productivity Growth (TEPG) during the decade of the eighties as compared to the seventies. Recently it is argued that if the real value added is estimated by using the double deflation method, this hypothesis does not hold. It is also suggested that the double deflation method provides a more appropriate measure of the real value added. In the present paper, it is shown that the hypothesis of a significant increase in TFPG during the eighties in the Indian industries is clearly corroborated if sufficient care is taken about applying the double deflation method. Moreover, it is also argued that the double deflation method per se is not necessarily superior to the single deflation method for measuring the real value added.

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Working Papers | 1994

Indian Economic Forecast: July 1994

Rastogi A B

Boom conditions are prevailing in the economy but there is a danger of inflation raising its head again as the foreign exchange reserves go on increasing. The RBI's target of 55 billion of foreign capital which it can manage by open market policy will be breached very soon and the bank would be forced to abandon open market operations. With a flow of $ 5 - $ 10 billion, the RBI would be able to manage with some major changes in the monetary policy but a flow greater than $ 10 billion would force the government to go for full convertibility in March 1995. The government should take a bold step and reduce interest rates by another 2 to 3 percentage points. This would boost domestic investment, draw in imports and prick the ballooning foreign exchange reserves. It would also loosen the pressure on money supply and government deficit.

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Working Papers | 1994

The Bureaucratization of Drought Conditions: A Critique of Drought Policies

Vasavi A R

India's policies and programmes designed to address problems of drought prone areas represent a "Bureaucratic ethos" and a "development regime". Hinged on naturalistic and technocratic approaches to the definition and management of drought conditions, these programmes do not take into consideration the role of economic and social factors in the production and reproduction of drought conditions. Despite two decades of formulation and implementation the limitations of these programmes and policies have led to the denouement of conditions which have further exacerbated the degradation of these areas and the immeseration of people. Drought policies must shift from an excessive reliance on naturalistic indicators and take into consideration the ecological history and political economy of different regions. Policies to revive and sustain these regions must be grounded in the recognition of the ecological specificities of different regions and in enabling people to sustain their livelihoods.

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Working Papers | 1994

Ethical Issues in Prospecting Biodiversity

Anil K. Gupta

Biodiversity Treaty has recognized in an unequivocal manner the need for developing an accountable and equitable system for building relationship with people who conserve biodiversity and associated knowledge systems. Article 8J provides for 'involvement and approval' of the individual innovators, communities and others conserving biodiversity for accessing this resource in a manner that benefits are equitably shared. Article 15.5 stresses the need for prior informed consent. There are several other Articles of the Biodiversity Treaty which (a) legitimize national sovereignty over biodiversity resource, (b) provide mechanisms for technology transfer from countries which are advanced in technology but impoverished in biodiversity to the biodiversity rich but economically poor countries, (c) call for setting up clearing house of information etc. The treaty also provides for recognizing the importance of indigenous innovations and traditional knowledge system. The most important dilemma that one has to resolve deals with the responsibility of society towards those who have conserved biodiversity despite remaining poor. Obviously one cannot wish to keep people poor if one notices inevitable decline of biodiversity with increase in affluence. I discuss various questions that have to be addressed around seven issues or themes to help in the development of guidelines that may illuminate further deliberations on the subject. I hope we will be able to identify areas which are clear or unambiguous as distinct from areas where moral judgments have to be made. 1.) Accountability of researchers and biodiversity prospectors engaged by public or private sector in national or international organizations towards providers of biodiversity resource from wild, domesticated and public access resources. 2.) Accountability of researchers and biodiversity prospectors towards the countries from where resources are extracted. 3.) Accountability to profession engaged in generating universal knowledge and developing norms guiding this process. 4.) Accountability of international UN or other organizations which possess globally pooled germ plasm collections deposited in good faith but accessible to public and private corporations as well as other institutions without reciprocal responsibility. 5.) Natural resources as property governed by various kinds of property right regimes and consequent moral and ethical dilemmas. 6.) Accountability of civil society and consumers of products derived from prospected biodiversity or other competing alternatives. 7.) Accountability towards future generations.

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Working Papers | 1994

Compensating Local Communities for Conserving Biodiversity: Shall we Save the Goose that Laid the Golden Eggs so Long

Anil K. Gupta

Large number of local communities have conserved biodiversity and the associated knowledge systems despite remaining very poor. Sometimes, they have refused to receive any compensation in view of sharing the information. Their ethical beliefs have prevented them from accepting any valuation of their knowledge. In most cases, however, the outside extractors whether belonging to research organizations or public or private corporations have not even recognized the need for negotiating a fair compensation to local communities. Article 8J of Biodiversity Treaty requires involvement and approval of local communities, innovators and other providers of knowledge in a manner that benefits are shared equitably. This paper looks at how the local communities and individuals have generated creative solutions to their local problems by drawing upon their knowledge of biodiversity. The social exchange mechanisms in market dominated communities are contrasted with nature dominated communities. Several case illustrations of institutions as well as technologies contributing to the conservation of diversity are presented in part II. The role of networks, NGOs and intellectual property rights in conservation through experimentation, innovation, and competition is discussed in part III. Illustration of a global network, viz., Honey Bee extending to sixty two countries is provided to highlight how people to people learning across the language barriers can take place in an accountable and transparent manner. Similarly, how biodiversity contest among children have helped in identifying local genius has been illustrated. In the light of GATT, FAO undertaking on plant genetic resources and Biodiversity Treaty the changes required in the IPR system and an effective sue generis system are discussed in part IV. An operation framework for compensating creativity of farmers, tribals, pastroralists, etc., is also described along with the description of legal and institutional changes required for the purpose.

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Working Papers | 1994

Empowerment for Sustainable Development: Building Upon Local Creativity and Entrepreneurship in Vulnerable Environments

Anil K. Gupta

A transition towards sustainable development requires recognition of the fundamental contradiction between the strategies which build upon what people do not know or have and the ones which take people's knowledge systems as the basic building block. It is the latter process of building upon people's own creativity that will bring about a liberating alternative. If development is defined as process of widening the decision making choices and extending the time frame of the households, then sustainable technologies and institutions cannot be appraised in shorter time frames using higher discount rates. The paper is divided into four parts. Part one deals with the interplay between communication and power. It provides scope for empowerment of disadvantaged communities through two way communication and two way power. It is ironical that knowledge rich farmers, pastoralists, and artisans are termed resource poor in the global developmental jargons. Part two deals with the issue of creating coping by rural households in environments with varying vulnerabilities. We discuss how households with portfolios having low average return – high variance become most vulnerable. The features of market dominated communities are contrasted with that of nature dominated ones. Eco-institutional model is described in the context of informal collective choice institutions. Part three deals with grassroots technological and institutional innovations for sustainable development. The knowledge erosion is compared with the erosion of resources in single and multiple generational time frame. It is argued that sustainability can be achieved only by conserving resources and the knowledge around it both in single and multiple generational time frame. The cases of weak and strong sustainability are infereed from the combination of the variables. The institution building process is discussed with specific reference to the experience of SRISTI (Society for Research and Initiatives for Sustainable Technologies and Institutions) and Honey Bee network. The process of lateral networking implying people learning through communication in vernacular languages is discussed. The experience of 'conversation through competition' is illustrated through the discussion on biodiversity contests organized by SRISTI among children and adults in different parts of the country. Paper concludes with some lessons and issues in becoming accountable to people from whom we learn.

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