Policy lessons from Nepal

durbar_nepal

Durbar Square, Kathmandu, Nepal. 2017

This week completes over six months of formal engagement with Nepal’s development sector. On the sidelines of the second Nepal Investment Summit which is being held for the second time, after the first one in the 1990s, there seems to be a recognition of need for investment in economic growth of the country. There is also a pressure on the government to take faster decisions on proposed projects.

I first visited this country in 2008. Early observations were with an eye of a traveler from the neighbouring country. Last year, work led to understanding Nepal’s development context (and challenges) better. Here are a couple of policy lessons that emerge from this experience:

  1. Influence of geopolitics on public policy: This link is under appreciated  in policy literature, in my opinion. Domestic policies in Nepal’s case are significantly influenced by factors emerging outside the country. The choices for low income countries (LICs) in the current global context are by far limited. It is well acknowledged that infrastructure like roads, electricity, healthcare etc are vital for improvement in basic quality of life which then is likely to translate into economic growth. In low income countries like Neopal, most of this vital infrastructure is poor. To get this built should (and is) a national priority. This is where LICs have tough choices to make because their own investment and expertise potential is low. These must be supported by someone else. If these are aid agencies then they are driven by the aid providing country’s strategic agenda. If the support comes from multilateral agencies then these come with conditionalities (as Latin American and Asian countries very well know by now). If the support comes from regional powers (in Nepal’s case India and China) then the geopolitical considerations take the center-stage. Nepalese attempts at improving its economic growth are limited by the rate at which it builds highways, electricity generation and supply among other things. Japanese agencies have helped fund some of the highways over the last decade. One Belt One Road (OBOR) project proposed by China is another strategic project which awaits Nepalese government’s approval. On the southern side, India continues its support to build postal highways and other roads leading into Nepal from Indian border. The progress on all of these highways which are important for Nepal’s domestic trade are influenced by changing nature of relationship with its neighbours. A basic core of policies driven by domestic context and demands appears to be weak in Nepal. Our discussions with civil society groups reveals that the national policies on water and sanitation too are influenced by aid agencies and their financial support. This is what I mean by influence of geopolitics on public policy. 
  2. Governance capacity gaps are more debilitating than financial capacity in the long run : The common refrain for state of affairs – poor infrastructure, weak state capacity, governance issues etc, is that LICs lack financial resources to fix them. This need not be true. Answers to efficiency and service delivery do not emerge from national exchequer.
  3. Often times, strengthening democracy is a necessary condition in societies with diverse ethnic and social groups: At ATREE@20 conference last month in Bengaluru, Kamal Bawa sat listening to the presentations on conservation and development. The tension between development aspirations and conservation was a key theme. Towards the end, Bawa remarks that only an authoritarian regime can decisively and conclusvely act towards the environmental, conservation and development challenges. Democracies aren’t as capable. I could see that Bawa was acknowledging the strength of a democratic system and at the same time speaking of its strong limitation in being able to address the challenges in a short span of time. In its long drawn process of addressing societal and environmental challenges. However, what democracies come up with are equitable solutions, if not entirely sustainable.

Though on a tangential topic, this insight is useful as one sees Nepal struggling with laying a foundation for a strong democracy since the democratic Constitution of 1990. Until democratic form of governance finds its root, there might not be an end to the frequent clashes and shutdowns of various regions that are fighting for rights and representation.

Journalist Prashant Jha writes that “instability has remained the norm, with a government canging every nine months.Nepal democratic trajectory is framed succintly in his book “Battles of the New Republic” –

From war to peace, from monarchy to republicanism, from being a Hindu kingfom to secularism, from being unitary to a potentially federal state, and from a narrow hill-centric notion of nationalism to an inclusive sense of citizenship – Nepal’s transformation was, and is, among the most ambitious political experiments in recent years in South Asia.

4. Public policy in fragile states must engage with and respond to political reality:

While some debate whether there can be any semblance of policy in a fragile state (politically), I argue that if it engages with political reality and respond to it within the extremely short time that an incumbent government has, that can lead to a minimal core of polcies. Every incoming party tends to pick up reins from the past and improvise on it. If the template is engineered such that it formalises priorities, there might be hope for continuity. This is arguably difficult. For instance, labour policy in Nepal can benefit from this. Almost every government in the last decade has seen its youth migrate to Middle East, South Asia, South East Asia and to Europe for work, any kind of work. The country now earns substantially from remittances. A policy to regulate and channelize remittances and at the same time care for its migrating workers’ rights in distant lands, could have earned the government a major support group. As it now stands, the migration is largely driven by distress at home.

The above are visceral responses to the state of public policy in Nepal. On a deeper engagement, it could be true that some or all of these are unfounded. However, it helps my learning that I put them here as they emerge in the head.

A way forward for aid agencies that work in Nepal could be to look at interventions that enhance governance and policy-making capacities of the government as a priority. This involves the danger of transplanting ideas from elsewhere into a different context and see things getting messed up, however, this is arguable. There still exists a core set of ideas that are useful and effective in helping an economy make best use of its resources and enhance living conditions of its people.

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Quick Take: Policy as the new law

Is policy the new law? The quick take here pursues this question.

The observation appears to hold ground considering the manner in which important decisions are made and implemented by governments worldwide, although this applies more to democracies than other forms of political systems. There is an increasing preference to policy making over law making. This shift in a way marks a weakening of constitutionalism as the traditionalists knew it. The shift was subtle to begin with in post World War – II era and became a rapid transformation after the emergence of structural reforms and new public management.  Newly independent countries  either accepted the structural reforms which basically made countries change their governance style via policy than law making or had to forego development aid and loans. The preference for policy making in such a context is evident.

The policy route to change is probably due to a shorter path to implementing a new order and significantly less public resistance and scrutiny that policy making involves. Making laws is slower and fraught with public scrutiny and interference. Policy making tends to happen in a government space which is deeply embedded and is far higher in reach and access to citizenry in comparison to law making. This procedural and structural advantage is likely cause for the safety and ease that policy making provides to governments.

Moreover, the legitimacy to such a style of governance (by policy making) is given by global pressures of trade, globalized economic processes and inter-dependencies. Domestically, it is the political demands which make governments opt for policy route, as this delivers well to satisfy popular demands. Policy is a faster and comparatively obstacle free solution of a modern democracy’s problems. Take for instance the regulation that defines use of coastal zones in India. As a policy it caters to the demands of the market as well as the state itself. This also gets legitimized by the fact that the guideline document is issued by the legislature itself (in this case Ministry of Environment, Forests and Climate Change).

It is likely that the most important precedent for greater preference of policy over law was set by the economic reforms of 1991. While that yielded on the intended outcome of jump-starting economic growth, it was also in a way a signal to subversion of democratic process. Most certainly, it was the beginning of end of constitutionalism as a cornerstone. Policy process is seen to be at odds with constitutional values at times. However, contemporary policy process is a mix of desirable and undesirable consequences. Economic policy which led to liberalization of Indian economy has been regarded as a desirable change whereas environmental policies have largely failed in being inclusive and has consistently been violent in its impact on marginalized groups.

With emergence of regulatory governance we see that preference of policy route to governance has increased further. Independent regulatory authorities which have near complete autonomy over controlling key government sectors have achieved success through policy making. The RBI and TRAI are fitting examples of the trend. With mainstreaming of regulatory governance as a practice, policy’s position as the new law will only strengthen.

The space (policy and law and things in-between) is getting complicated to understand, navigate through and study. We are likely to see more policy think-tanks setting up and public policy programs being offered by top institutions in India. While this take is about governments’ preference to policy making as a procedural ease, a much broader take on public policy and its relevance was pursued by Shiv Visvanathan  in this editorial.

 

 

Understanding Public Policy Research – A schematic

By Keshav (Courtesy: The Hindu)

By Keshav (Courtesy: The Hindu)

Here is a ‘discipline neutral’ way of understanding policy research. This stuff comes out from a course on Introduction to Policy Research that I take this term. Interestingly enough this is the first time that we have a specific course titled as that – Public Policy, as a part of any graduate program in an Indian university. What follows is a way to simplify what policy research is for the uninitiated. It can possibly help in mapping the landscape of the several different kind of policy studies that exist.  This is closer to what we have often done – applied and functional to get going in a space. The policy professor here whose own work looks at Indian politics, policies and processes from an applied perspective, helped folks understand policy research area through the schematic that I’ve cleaned up and represented below.

On public policy, he argues that it is about creating change by making hard choices between competing values. It is about approaching problems and these approaches vary with different interest groups. I am attracted to this explanation because it is not theory heavy and emerge from a gaze set on real world and unlike other insular theories in public policy that I have come across.

The schematic came about from discussion on India’s transition in public policy space and various studies like Rob Jenkins’ on what made the 1991 reforms work in India, Achin Chakrabarty on reform debates and more importantly Pranab Bardhan who articulates the Indian state as “predatory” during the Indira Gandhi period.  The variety of public policy study and practice as seen in the West is relatively new in India and therefore the extra effort in explaining its direction, intention and methods. Public policy study is done in two ways –

1)      Policy Research – which is a post facto analysis of what happened with policy X in place and why.

2)      Public Policy Analysis – which is conducted before or towards developing and implementing a new policy.

And hence the following schematic to understand public policy research –

A schematic to understand policy research (Ref: Srikrishna Ayyangar)

Approaches in policy research (Ref: Srikrishna Ayyangar)

Paving the road to hell with agricultural productivity

Kuppam, Andhra Pradesh . This region in AP witnesses a bumper tomato produce in November, 2012 and effects the prices (adversely) in the nearby cities of Bangalore and Chennai. High volumes of production did not lead to commensurate rise in income of the farmers in this region, as we know.

Kuppam, Andhra Pradesh . This region in AP witnesses a bumper tomato produce in November, 2012 and effects the prices (adversely) in the nearby cities of Bangalore and Chennai. High volumes of production did not lead to commensurate rise in income of the farmers in this region, as we know.

Here is a brief of a new policy study that my colleague Praveena and I begin this month. We are excited about this idea as agriculture and development has been sectors of our interest since long and that a sector fatigue (from our work in water sector) is slowly kicking in. We would sharpen this as we get going on this, but sharing a rough cut of the idea is called for to invite inputs and criticism on this from folks we know and the readers of this blog. 

Paving the road to hell with agricultural productivity: Agri- commodities, International Trade and Development

Focus on increasing agriculture productivity as an intervention in alleviating poverty across the less developed and developing countries, particularly of Africa and Asia has had reverse effect of pushing people further down into economic crisis. We begin a small study this week where we explore the consequences of large agriculture programs which are focused on increasing agricultural productivity of farm sector, for a variety of staple crops, cash crops as well as horticultural crops. The increase in productivity is treated as end in itself. Whereas, in practice, the productivity rise is not realized as increased income for the farmers but works adversely works on pushing the prices of that crop further down. What is proposed is that increased agri productivity will lead to increase in income of the farmers. In practice, what happens is that the increased flow of agri-produce in the market pulls the price down and neutralized the gain of the producer.

There are two problems that we see –

1)      Development programs which focus on increasing agriculture productivity alone are not desirable as they do not alleviate poverty in long term, instead work adversely.

2)      Increased agri-productivity affects less developed and developing economies which earn by exporting these primary goods. When a higher volume of produce hit the international market they push the prices down and lead to lesser earnings by the producing country. This has an aggregate effect of leaving the economy as impoverished as it was earlier, if not worse.

These two problems could be addressed by thinking about development sector programs in agriculture as well as international agri-commodities trade from analyzing existing policies in agriculture and trade sectors.

Our argument is that development sector programs in agriculture, domestic as well as international agri-commodities trade and poverty are linked very closely and in a direct fashion. There is a ripple effect that travels right through this chain and leads to adverse effect on the producers if these programs focus only on productivity increase. This fixation without looking at the policy environment and prevalent trade practices will always lead to poor outcomes as seen in declining international agri-commodity prices by as much as 25% across the board – coffee, tea, cocoa and sugar, in the last decade. From 1980 to 2000, world prices for 18 major export commodities fell by 25% in real terms.  The decline was especially steep for cotton (47%), coffee (64%), rice (61%), cocoa (71%) and sugar (77%)  (World Commission on the Social Dimension of Globalization 2004: p83).[1]

 


[1] The commodities crisis and the global trade in agriculture: Problems and proposals, Martin Khor