The Aam Aadmi Party`s governance agenda - will it succeed?

The “Aam Aadmi Party (AAP)” revolution in India led by Arvind Kejriwal has caught the attention of the entire country so much so that the onetime poster boy of the media – Narendra Modi- has been swept off the media pedestal. As per the AAP spokesperson Yogendra Yadav, people have voted for AAP for 3 reasons viz. clean politics, good governance and anti- corruption. Very true!

Narendra Modi's agenda has included these two themes along with economic development as a part of his election campaign. Arvind Kejriwal is being touted as the 3rd alternative for the Prime Minister's post so much that a national newspaper has reported today that Modi has pressed the panic button fearing the AAP wave.

What does the country need now? Given the precarious economic scenario that we find ourselves in, economic development is very important for our country. Our GDP growth rate has fallen to sub – 5% levels from the 9% levels we were in a few years back. However, the country has been severely shaken by the numerous corruption scandals in the last few years and historically corruption has been rampant in this country ever since our independence. Hence governance and anti –corruption plank have also become equally extremely important and has caught the imagination of the people especially the middle and upper class that are fed up with the 2 big national parties.

A research paper “Is good governance good for development[1]?” argues that good governance is not a necessary precondition for development. The research paper lists some obstacles mainly the different political characters of various nations. The western nations saw a surge in their economic development in the 18^th and 19^th centuries when the term governance was unheard of. In the last few decades we have seen the rise of China and some other East Asian countries that would rank not very high on the governance matrices.

So what is important now-

• Governance or economic development?
• Is governance required for economic development?

My answer would be yes. Good governance is a good supporting factor for sustainable economic development and possibly to convert economic miracles to sustainable development. The presence of proper institutions like judiciary, legislature and executive machinery is important to deliver the benefit to the people and avoid issues like corruption, inefficient allocation of resources, etc. A well-developed banking and financial system can lead to financial inclusion. Speeding up of judicial activities can ensure protection of ordinary citizens and protection of industrial interests.

For a sustainable and balanced growth of the country it is therefore necessary that economic development goes hand in hand with good governance. Given the size and political status of India, it is imperative that we have do not have a governance less development like the Middle East and some African nations and neither should governance impede development as still a sizeable population is below the poverty level. Singapore can be quoted as a good example of a “proper” balance of governance and development. While many critics can describe Singapore as prison state, the government under the tutelage of the previous premier Lew Kuan Yuew has developed Singapore to be a model of economic prosperity and a toast of the world. People are willing to let go some freedom for economic prosperity.

The Delhi AAP government of Arvind Kejriwal has taken 2 sets of decisions since taking power in late December`13 viz. governance decisions like anti-corruption telephone line and audit of power discoms and on the other hand populist measures like power subsidy and free water. The populist measures smack of “Leftist” thinking which has long been rejected by people. In fact the communist parties are being threatened with the advent of AAP!

Hence Arvind Kejriwal and his AAP team members should probably work on the following paths:

1. The focus on governance is what the country needs and people would love to see the same being institutionalized. Hence the AAP should implement measures and systems to make governance a way of life. Some of them would be institutionalizing the Lokpal bill, ensure proper law and order, regular availability of metered and billed power and water, improve efficiency of government services and last but not the least infrastructure. This in turn would help the economy as well. This will not happen overnight but a proper process can be put in place to do this. One way, which has been initiated, is to form teams with professionals (true aam aadmis!).
2. AAP should not be seen as anti- business and hence should avoid socialist  leanings like the Congress. An anti- business stance will hit the economic  development and can prove counterproductive.
3. Populist measures, especially subsidies need to be avoided as these are  truly anti proper governance.

To conclude, I would sincerely hope that the Aam Aadmi Party truly becomes a mainstream political party and cleans up the entire Indian system and in the process ensure an all-round development of India. All the best AAP !!

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[1] Kwame Sundurama, Jwame and Choudhry.  United Nations Series on Development.

-       Contributed By Ram Narayanan, Sloan Fellow, London Business School

Adding on to Ram's article, I would like to say:

As much I admire Aam Aadmi Party ( #AAP 's) anti-corruption stance and their ideology of including opinion of the common people in the governance, I hope that they do not create or set expectations that might be difficult to sustain in the long run without compromising on the country's growth prospects. Rather than going overboard on populist measures such as entitlement and subsidies, taking a balanced / calibrated approach will augur well for the overall economic development of India.

-   Somali Chakrabarti, Sloan Fellow, London Business School