India's Democratic Challenge

Ashutosh Varshney

From Foreign Affairs, March/April 2007

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Summary:  The Indian economy is booming -- but the boom will last only as long as the vagaries of Indian democratic politics allow it to. Democracy and market reform are uneasily aligned in India today, and the additional reforms necessary to raise the lot of India's poor masses -- who have enormous voting clout -- may not garner a popular mandate at the ballot box. Although a long-term asset, democracy could prove to be a short-term headache for India's reformers.

Ashutosh Varshney is Professor of Political Science at the University of Michigan and the author of "Ethnic Conflict and Civic Life: Hindus and Muslims in India" and "Democracy, Development, and the Countryside: Urban-Rural Struggles in India."

CHARTING A NEW PATH

India is attempting a transformation few nations in modern history have successfully managed: liberalizing the economy within an established democratic order. It is hard to escape the impression that market interests and democratic principles are uneasily aligned in India today. The two are not inherently contradictory, but there are tensions between them that India's leaders will have to manage carefully.

Students of political economy know that market-based policies meant to increase the efficiency of the aggregate economy frequently generate short-term dislocations and resentment. In a democratic polity, this resentment often translates at the ballot box into a halt or a reversal of pro-market reforms. In the West, such tensions have remained moderate for at least three reasons: universal suffrage came to most Western democracies only after the Industrial Revolution, which meant that the poor got the right to vote only after those societies had become relatively rich; a welfare state has attended to the needs of low-income segments of the population; and the educated and the wealthy have tended to vote more than the poor.

The Indian experience is different on all three counts. India adopted universal suffrage at the time of independence, long before the transition to a modern industrialized economy began. The country does not have an extensive welfare system, although it has made a greater effort to create one of late. And, defying democratic theory, a great participatory upsurge has marked Indian politics, a phenomenon that is only beginning to be understood by scholars and observers: since the early 1990s, India's plebeian orders have participated noticeably more in elections than its upper and middle classes. In fact, the recent wisdom about Indian elections turns standard democratic theory on its head: the lower the caste, income, and education of an Indian, the greater the odds that he will vote. The ruling United Progressive Alliance (UPA), a coalition with the Indian National Congress at its core, counts on the lower social orders as its most important voting bloc.

India's development experience is also likely to be distinct from East Asia's. South Korea and Taiwan embraced universal-franchise democracy only in the late 1980s and the mid-1990s, two decades after their economic upturn began. Other economically successful countries in the region, such as China and Singapore, have yet to become liberal democracies. Periodic renewals of mass mandates through the ballot box are not necessary in authoritarian countries, but they are in India. Democratic politics partly explains why, for example, privatization has gone so slowly in India compared to in China. In India, workers have unions and political parties to protect their interests. In China, labor leaders who resist job losses due to privatization are tried and jailed for treason and subversion, something entirely inconceivable in India's democracy.

So far, the reform process of the last 15 years has had positive results: by most conventional standards, India's economy is booming. After registering a 6 percent average annual growth rate for nearly a quarter century, the Indian economy ...

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