The role of government in a free society

We have already alluded to the role of government in the free society, in some detail. In brief, this mainly involves defending life and liberty, and being an umpire.

This is not a small role.

Defending life and liberty is a huge undertaking, with numerous complex activities and institutional arrangements involved. This task can keep a government occupied 24 hours of the day, 365 days of each year. Performing this task well will leave the government with no time or energy for lesser functions (or worse – endeavours like producing shirts or bread, or running buses, hotels and airlines).

We face the risk of the government assuming a greater role for itself than we hired it for. There is an almost universal trend for all governments to expand in size and scope. This is called the Wagner’s law. This is because busybodies, lobby groups and bureaucrats like to expand their empires at taxpayer expense. They are vocal, powerful and often unaccountable. Limiting the government is not an easy task. Government failure arising from over-reach, incompetence, even corruption, is more ubiquitous and often more insidious than market failure. Politicians are chronically careless with our money. Indian governments are a good example.

We must require the government to do only what it must, and compel it to leave everything else to its master: the citizens.

This task is not for the faint hearted but Swarna Bharat Party is up to the task.

1.1         The functions of a government (including what it should not do)

In the jargon of economics, Government failure is substantial, and often much worse than market failure. As a general rule the presumption should be in favour of government actions only when market failures are quite large and persistent. Governments should have the dominant role in the military and police areas, in the judiciary, in protecting against massive pollution, and in providing a safety net for its least fortunate members (private charities are important but do not do enough). On the other hand, when market failures are relatively small and likely to be temporary, as in monopoly situations or in exploiting consumer ignorance, government involvement should be minimal, as in minimalist anti-trust policies, and in allowing consumers generally to make their own decisions.

The key functions of government in a free society are outlined below.

1.1.1      First order functions

These include:

  • Defence: An effective defence is absolutely mandatory before any other function can be considered. Citizens are also responsible to voluntarily seek appropriate roles in the defence of their nation. (We do not support conscription except in calamitous circumstances);
  • Law and order, internal security; police: The second major function – almost on par with defence – is police. This is to ensure internal security and law and order. Emergency management including rescue and relief is also part of this function;
  • Justice: After these two functions are met, the free society requires a strong justice system and rule of law that assures accountability. The laws should be simple and minimal, interfering with people’s freedoms only to the extent necessary to maintain the free society; and
  • Supporting free enterprise, democracy, and subsidiarity: A government needs to frame rules for markets to encourage innovation and competition, without fraud or harm. It also needs to strengthen democracy (without pandering to majoritarianism), and boost the principle of subsidiarity and local government (with decision-making left to the level of government closest to an issue).

1.1.2      Optional (second order) functions

A government should play a minimal role in all other things. Any such additional roles should only be taken up after first order functions have been delivered to a high standard. Facilitating physical infrastructure is one such role. Further, a government could seek to eliminate extreme poverty and ensure reasonable equality of opportunity for all citizens, once first order functions are delivered.

1.1.3      Avoidable (third order) functions

Anything beyond this – such as things like heritage conservation, sports, scientific research and protecting flora and fauna (beyond key protections that form part of the principles of justice) – should be off-limits for government. At best, a government could co-regulate or provide some general (preferably co-regulatory) frameworks for the people in such cases.

1.2         Reining in the government

We draw a line in the sand on this issue: that the government is our servant, not our master, and should never take on work that we don’t specifically delegate to it. For instance, governments have no business to preach, teach, or impose ‘morality’. As our employee, government should restrict itself to being an umpire or night watchman. It must not try to be our nanny or mai-baap.

By keeping the government tightly within its bounds, we will prick the bubble of bloated government, shedding it of its fat and making it focus only on things it should do.

1.2.1      Downsizing government, and an efficiency dividend

The government draws deeply on the taxpayer’s sweat and labour. But its parasitical, tangled and wild growth today is choking the very lifeblood of the society it was created to protect. This parasitical growth needs to be firmly pruned, so taxpayers can also earn for themselves.

At the operational level, this will mean repeatedly restructuring and downsizing all unnecessary agencies and making the remaining ones more efficient and effective. We will systematically review the justification for each government agency and programme and test its ongoing relevance based on first principles (elaborated under the regulatory and policy framework, later).

We will do more with less. We will impose a productivity dividend on the government machinery, with its outputs delivered cheaper and more effectively with each passing year. (This excludes any legitimate increase in salary or resourcing – for the legitimate functions of government – that we have separately detailed elsewhere in this document.)

A growing economy should see the size of government become incrementally smaller as a share of GDP.

1.2.2      Constitutional constraints and subsidiarity

Operational control is never enough. Unrestricted democracy (with its lobbies and interest groups and politician incentives to be re-elected) often leads to a tyranny of majority and unrestrained growth in government. Constitutional restrictions can help constrain such tendencies.

Subject to being voted to power with a necessary majority, we will restore the liberties enshrined in the original Constitution and, in addition, legislatively limit (where practicable) what governments can do.    Considering the establishment of a new Constituent Assembly

While India’s Constitution has served us tolerably well – despite the destruction of much of its original intent – it may be time to review it and create a new document focused on liberty and limited government. Every generation should have an opportunity to review the Constitution afresh. We will consider the case for convening a Constituent Assembly, being mindful of the harm that can be caused by an assembly whose members are ill-educated in the principle of liberty.    Key amendments to the Constitution

In the meanwhile, we will introduce a number of Constitutional amendments as early as possible, including:

a) assertion of a strong fundamental right to property, and repeal of Schedules that protect land ceiling acts. These schedules are entirely inconsistent with the intent of the original Constitution;

b) strong freedom of speech rights, patterned on the First Amendment to the American Constitution;

c) repeal of articles regarding All India Services. This will allow the public service to be regulated through acts of parliament, with the generic labour laws (which will be much reformed) also applicable to public servants;

d) repeal of the 42nd amendment to the Constitution which added the word ‘socialist’ to the Preamble. We have the greatest concern for the poorest of the poor – far greater than any socialist party. Such parties merely take the name of the poor: our policies will eliminate extreme poverty in three years and lead to unprecedented prosperity for all Indians. But we oppose socialism in the context of state ownership and control of the economy. The requirement in the Representation of Peoples (ROP) Act that all political parties must swear allegiance to socialism, will also be repealed; and

e) repeal of the Directive Principles of State Policy: We object to the idea that our Constitution, which should limit itself to laying down the rules of the game and the defence of liberty, includes policy recommendations. Policy must be determined democratically after a highly analytical policy impact assessment that takes account of impacts on freedom.

Over the years, certain amendments with laudable objectives but faulty design have been inserted into the Constitution, e.g. anti-defection provisions. These will be reviewed and, where appropriate, amended or repealed. Further, after the government becomes capable of ensuring the rule of law, Articles 29 and 30 of the Constitution will be phased out. If not earlier, but definitely by then, it may be time to constitute a new Constituent Assembly to create a simpler, minimalist Constitution.    Judicial powers to review laws for constitutionality

In addition to reviews of legislation to be coordinated by the India Policy Office (detailed later), we will inquire into the judiciary’s powers to review our laws for compliance with liberty, and if necessary, strengthen these powers. We would like the judiciary to fearlessly strike down any unnecessary restriction imposed by the laws on citizens’ liberties.    Subsidiarity and decentralisation powers to the States

One way to keep the expanse of government in check is for decision making to be left to the level of government closest (or most appropriate) to an issue. Public representatives with local knowledge are best placed to make decisions on our behalf. Poorna swaraj can only be achieved if local functions of government are delegated to the lowest effective level, such as village or mohalla. We will empower local bodies, subject to accountability, to levy and collect their own taxes (rates) and to use these revenues for local needs and infrastructure.

In the same vein, Centre-State relations are overly centralised today, with the result that states have become post offices, without significant policy freedom. We will ensure that the constitutional delineation of powers between the states and the centre is respected. We will review and strengthen the powers of the states and local governments, to support subsidiarity. To ensure competitive federalism, we will get the Central government out of most areas in the concurrent list, and only retain coordination functions. This deeper level of subsidiarity will need to be offset by a greater level of uniformity in taxes and laws across the country, to make India a single economic market. And we can’t have state or local governments doing things that are not their business, either. For instance, subsidiarity is no licence for trampling any liberties.

Some exceptions may still be needed. For instance, Delhi should continue with its current arrangements where certain functions such as the police are within the control of the central government. This is necessary since Delhi is for all Indians, millions of whom visit it every year. Local Delhi issues should be allowed local play, but with minimum impact on the nation.

1.2.3      Dramatically increased accountability and transparency

Other ways to constrain government involve strengthening transparency and the government’s accountability.    Open government: duty to publish

A government can be thought of as the ‘board of trustees’ of a nation. Its actions must therefore be transparent and accountable, subject only to the demands of national security. A government should publish all key information on the internet. We will provide online access to most (aggregated) government spending data, in line with best practice across the world (e.g. government contract outlines and costs will be individually published).

We will legislate to require that except for state secrets relating to national security, nothing will be classified as an official secret. In particular, the normal democratic political activity of any citizen will not be classified as an official secret. However, leaking matters that could adversely impact national security will be punished.

We will amend Right to Information laws to err in favour of greater rather than less disclosure wherever privacy, commercial-in-confidence, or national security issues are not involved. Each citizen will also be empowered to access (at cost) any non-secret record about the citizens maintained by government.

Disclosures laws will be amended to ensure that all cabinet and any other (including national security) documents are mandatorily made public after 30 years, or after any pressing national security requirements or reasonable requirement for commercial confidentiality has passed – whichever comes first. Most confidential government documents could, therefore, be released well before 30 years.    Citizens to directly supervise the government through Local Boards

To further tighten accountability and transparency, we will ensure that each government office (e.g. a department, agency or police station) sets up a Local Board constituted annually by lots from eligible voters, in a manner similar to jury selection. The Local Board will supervise activities of that public office. It will have the power to inspect the office’s records and processes (excluding records protected by privacy law, official secrets act, or cabinet-in-confidence/ commercial-in-confidence principles) and escalate instances of any non-compliance, inefficiency or corruption to higher authorities, or even the media.

In this manner, the masters of India (its citizens) will supervise the government, their servant right through the governance process. It is not just elected representatives who will supervise the machinery of government: juries of citizens will do so, as well. This is part of the Poorna Swaraj we want in India.

In addition, we will actively work with citizens groups (such as Citizens’ Government) to bring true democracy and accountability to India. Such citizens groups, equipped with latest technological tools to monitor government, would monitor public services and the public life of politicians and bureaucrats. We will legislate to authorise such organisations to even publish plausible (well-evidenced) anonymous allegations of inefficiency or corruption, so the government can (where necessary) launch investigations. We will also enact legislation to compel government functionaries to respond promptly to any request for information from such civil society organisations.

When we promise total accountability of the government, we mean it.

1.3         An incentive-compatible, outcomes-focused governance system

Once we have managed to restrain the government to its appropriate level, functions and size, and empowered citizen watchdogs to ensure it operates within these limitations, it will be crucial that it is professionally and competently managed and its (limited) functions be performed effectively at the lowest cost possible. We need a small but strong (i.e. highly capable) government.

This aspect moves us away from political theory to economics (public choice theory) and new public management. These disciplines of knowledge carefully consider the incentives of politicians and public servants, and suggest ways to make a government more efficient.

This begins with a clear understanding that everyone is – at some level – self-interested. We need to design incentive-compatible systems in which government functionaries are compensated at market rates but then firmly held to account for outcomes. This is about their contracts being incentive-compatible. With the right incentives, we will attract the best talent of each generation into our legislative assemblies, judiciary and public services, while also ensuring that this talent is motivated to achieve the best (and unbiased) results for India.

Poorly paying our representatives or functionaries will tend to attract the incompetent and corrupt into government. This is a very costly mistake – a mistake India has made for 67 years. The results are around us. This approach can also be extremely dangerous. Our life and national security can be easily compromised if we are not systematic about the incentives of our governance system.

1.4         The two pillars of good governance

The rest of this manifesto details the system reforms we will implement to embed an incentive-compatible governance system for India. As outlined earlier, the reforms are broken in two parts (pillars).

1.4.1      Pillar 1: Getting good people into government

This involves getting the right people into government. Our agents (politicians) and our sub-agents (bureaucrats) must be honest and highly competent. Ensuring this requires careful thought, not amateurish demands for a ‘Jan Lokpal’ or the ‘Right to Recall’. The laws of economics apply at all times to everyone. Amateurish design of our governance system will always end in disaster.

1.4.2      Pillar 2: Ensuring the government does only what it is should

Once good people have been inducted into the machinery of government, we need make sure that they do only what they should. This is related to the role of government, as outlined earlier. However, the implications of this are extensive, and are discussed later in SBP’s manifesto.