Economics relates to allocation of
resources to various segments of the economy. It can
tell you the methodology or the means of allocation of
resources for enhancing production, efficiency in distribution and equitable consumption. There
is always a tradeoff between competing demands in any economy as the
resources are limited. Good economics implies following such economic policies
that pushes the ‘Production Possibility Curve’ outwards. Politics can
broadly be understood as the means to the political power. Success in politics
is achieved by taking steps that increases the possibility of winning
elections.
Good Economics ensures larger
benefits to the large population. And if political parties work towards the wellbeing
of large sections of society winning elections thereby, it is good economics
and good politics. The effective communication with the electorate about the
outcome of economic decisions and level of awareness & education of the
citizens, determine, whether good economics is good politics.
In a democracy, where demands are
generated by different stakeholders, there is a political cost to every
decision. Technocratic prescriptions can ignore the political economy but
a politician will always keep an eye on the political consequences of any
economic policy.
Political cost to economic
decisions can be reduced through better communication skills of leadership; successful leaders are generally
good orators. Cost reduction can also be achieved by increased educational
outreach and higher level of awareness amongst the electorate. The time frame
for impact assessment of economic decision will also determine the correlation
between the economic decision and its political cost. Because the result of
some of the steps taken by the government might take years to be reflected in
changed ground realities, but the elections have to be won every five years. In
India the problem is further compounded by the fact that we have multiple
elections at the Centre and the States.
At times, powerful
interest groups with high stakes in maintaining status quo, exists within a
Nation. Their own compulsions take precedence over economic decisions leading
to bad politics. Sometimes divisive forces in a society raise their head and
bog down the decision making process of the state, creating chaos. Existence of
strong public institutions and pillars of democracy is a safeguard for
decision-making process. The selection criterion for the right candidate by the
electorate at the elections, influences the considerations for decisions of the
political parties. In an ideal democracies good economics is always good
politics, but rarely such situations exists, otherwise how you can explain farm
loan waivers and subsidies instead of investing resources in infrastructure for
better quality of life.
Mostly, the form of
governance and prevalent political structure, determine, whether good economics
is good politics. Nations should build sustainable institutions to; safeguard
minority interest and maintaining balance of power between pillars of governance
and holding free & fare elections. Countries spending on education,
transparency, information sharing and disclosers establish a healthy and a vibrant
political system. Then alone a positive relationship between good economics and
good politics is sustained.
By Political System we
mean a system of government. Political System is a complex system of categories
involving the question of who should have authority and ownership of resources
and what the government’s influence on its people and economy should be? And Political
Structure refers, to institutions or groups and their relations to each other,
their pattern of interaction within political systems and to regulations, laws
and the norms present.
Out Constitution
specifically says that Political Democracy has no meaning till we achieve
Economic Democracy. Economic Democracy means that the benefits of economic
development reach to all the segments of society, across caste, religion and
geography. This equity can only be achieved by good economics.
In a mature and just
nation, Good Economics is Good Politics; Economic Democracy and Political
Democracy coexist in an efficient governance model. If this healthy
relationship is non-existent, then there is lot to be desired from the institutions,
government, political parties and the citizens, all taken together.
Gopal Krishna Agarwal, National
Spokesperson for Economic Affairs, BJP
Mobile: 9810019753
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