[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...

Amal Sanyal,
Associate Professor,
Lincoln University,
Canterbury, New Zealand
Governance, Market, Deprivation
And The Political System
"The care of human life and
happiness, and not their destruction,
is the first and only
object of good government."
-Thomas Jefferson
A
lot has changed in our economic
institutions in the last
two decades. These changes
have not made much impression on water,
housing, healthcare and power for
low income people, or on poverty. I
strongly believe that these issues are
similarly handled in pre- and post-reform
and that this is a matter of the political
system, which has not changed across the
periods. To these issues it is extraneous
if we have a globally integrated fullfledged
market economy or an importsubstituting
economy run by administered
production and pricing. To address
them properly we need governments to
act pro-actively against deprivation. A
necessary condition is to have governments
formed with competent and
public-minded persons. The present political
system is not capable of producing
such governments. We need a thorough
political reform, not economic, to get
such governments.
I am not competent to discuss the political
system or its reform possibilities.
Given that this issue of the journal focuses
on market reform, I explore if certain
market reforms can play a catalytic
role in reducing deprivation by either
inducing change in the political system
or in spite it. We can get such effects to
a degree by ridding the government of a
variety of governance tasks, i.e. by letting
markets produce these services. My suggestions
do not arise from an economist’s
habit of preaching ‘market’ for the sake
of the economy. Rather, it is a sort of
preaching ‘market’ for the sake of the
political system. I will focus entirely on
market reforms in the provision of governance.
Though I will mainly examine
possible effects on the political system
and deprivation, I will also elaborate on
more general economic effects.
The abstract notion of governance in
practical terms involves production of
services for individuals or communities.
Depending on jurisdiction, central, state
and local governments provide them.
Principles are laid down by the legislature
and production and delivery are
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