It is usually emphasized that good governance is an essential element in economic development. While it is not sufficient to cause development, it is very difficult for a country to experience sustained and significant development in the face of poor governance and weak institutions. So this article about India’s recent elections contains seeds of hope. We were told and we witnessed some of the struggles in India related directly to government inefficiency, bureaucracy, and corruption. This article makes some interesting observations.
Indians across seven states are going to polls in 2012. This time developmental issues are firmly on the political agenda. Yet, this was not always the case. India, many believed, was paying a “democracy tax”, that political pluralism was at the cost of economic well-being.
Are the elections of 2012 turning out to be a watershed? Could the intense political rivalries among various political parties create an environment conducive for economic development?
In 2012, there are no big emotive issues to colour these elections and all the major contestants are focusing on development.
With greater political competition, the need for economic policy that works becomes critical for retaining credibility with the voters. So it appears that this competition has created the condition for economic reforms that in turn encouraged competition and improved economic growth. This is clearly a key part of the political narrative in India since the 1990s, as illustrated by the upturn in the trend line in the graph.
Economic competition has been good for Indian consumers. Six decades after independence, perhaps the time has come to reap the economic dividend from a truly competitive political democracy.
Increasing political competition has opened new opportunities for the voters not only to demand performance, but drive economic changes as their aspirations rise. This is forcing politicians to explore new ideas that might meet these demands.