Economics Journal: Will the ‘New’ Middle Class Create Friction?

By Rupa Subramanya Dehejia

Are the civil society movements that are currently grabbing headlines and stirring debate only about corruption? Or could there be something deeper behind them?

The Anna Hazare campaign, which is championing the Lokpal anti-corruption bill, is at least as much about widening our conception about democracy as it is about ferreting out malfeasance by government officials. Indeed, it is more comprehensible in this light. As I pointed out in aprevious Economics Journal, the Lokpal bill won’t do much, if anything, to tackle the sources of corruption but it will create a new bureaucratic institution that in theory will act as a check on elected officials.

Kapil Sibal, government minister and member of the Lokpal drafting panel, has gone so far as to call civil society’s proposals a “parallel government.” While Mr. Hazare himself denies it, his associate, Prashant Bhushan, has argued strongly for moving beyond our current definition of representative democracy.

Mr. Bhushan suggests that our inherited Westminster-style system, in which citizens exercise their democratic franchise every five years during elections but let legislators run the show in between, is too narrow. He argues explicitly that the creation of a Lokpal or citizen ombudsman is at least a partial move toward “participatory democracy,” more commonly called direct democracy. Taken literally, this would involve citizens deciding constantly on everything and not delegating to elected officials.

Direct democracy in its pure form is very rare because of what economist Mancur Olson called the “collective action” problem. In other words, group decision-making breaks down when a group is too large because members have an incentive to “free ride”: if you let others do the heavy lifting while you sit back and enjoy the benefits, and everyone thinks this way, decision-making breaks down.

The closest we have to direct democracy today is in decision-making in the Swiss cantons, in the context of a very small, highly-organized and wealthy society. The next would be the system of “propositions” followed in some U.S. states such as California, in which citizens can get issues onto the ballot. But how direct democracy would work in a large, heterogeneous, and poor country like India is anyone’s guess.

It’s also fair to ask whether the Hazare campaign’s support for greater citizen participation in fact reflects a desire for a more “participatory” system or their dissatisfaction at being marginalized within the current one.

Next, take the Baba Ramdev movement and its fight to bring “black money” back to India. While at present this movement is dormant, its issues haven’t disappeared nor have its supporters. As I noted previously, the Ramdev supporters have a different socio-cultural background than the Hazare supporters. While the latter tend to be mostly English-speaking, urban and middle-to-upper-middle-class, the former are largely vernacular, lower-to-lower-middle-class and from the smaller urban centers.

The Ramdev supporters, while perhaps politically more consequential than Hazare’s (because larger in number), labor under the burden of social exclusion. Commentator Pankaj Mishra has described social mobility for this group as a “mirage” and points to this as a source of frustration and anger.

The common thread tying together the Hazare and Ramdev supporters, different though they are in most respects, would therefore appear to be a sense of exclusion from something that each desires. Exclusion has often been described as economic, as in the most deprived regions of the country which harbor a Maoist insurgency or the large mass of rural poor who’ve yet to see tangible benefit from economic growth. But the Hazare and Ramdev movements reveal a reaction to other forms of exclusion whether perceived or real.

What are the implications?

Traditional political-economy theory, most associated with the late Samuel Huntington, argued that the “buy in” of a rising middle class was a guarantor of democracy as they demanded increased political freedoms and ensured that democratic political institutions were solidified. However, more recent experience tells a less optimistic story.

As Joshua Kurlantzick has argued, in several rapidly-growing middle-income developing countries, most notably Thailand, it’s been the middle class which has worked with entrenched autocrats to roll back democratization. The reason in each case is that the populist policies pursued by democratically-elected governments were pitched toward the rural poor and worked against urban middle class interests. In India, we have yet to see organized middle class dissent against the government’s “pro-poor” policies, but could this be in the offing?

By the same token, economist Michael Walton of Harvard University’s John F. Kennedy School of Government has pointed out that many growth miracles have run aground due to conflicts among interest groups and the state as well as institutional weakness which prevents such conflicts from being resolved. That leads to what is known as a “middle income trap.”

Mr. Walton suggests that Thailand and several Latin American economies have faced this scenario. While India’s democracy is much stronger and more firmly entrenched than that of Thailand or most other developing countries, and we’re still a poor country, a protracted conflict between civil society groups and the government, to say nothing of the Maoist insurgency, surely poses dangers.

This is no doubt furthest from the minds of the Hazare and Ramdev supporters whose struggle for political or social inclusion is perfectly legitimate in a democratic polity. But such conflicts, if left unchecked, ironically pose a danger to the very democracy that they’re trying to strengthen.

Rupa Subramanya Dehejia writes Economics Journal for India Real Time. You may follow her on Twitter @RupaSubramanya.


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