How leftist is India?

Financial Express, 8 January 2010

Observers of India are generally struck by the extent to which Statist solutions dominate. Economic reforms are often orphans in the political landscape. We commonly see hostility towards globalisation, a discomfort with markets, and support for a big role for the State as the solution to a diverse array of problems. However, the limited evidence that is available on the views of the population on these questions reveals some important differences in approach.

In India, there is a certain left-wing bias in government policy, in the positions of an array of political parties, mainstream views in the media, and the thinking of intellectuals. The instinctive response in Indian public policy involves being focused on market failures and glossing over government failures. By international standards, India appears to be left of centre. To what extent does this reflect the beliefs of the mainstream citizenry?

The Pew Institute conducts surveys worldwide which can help us understand the variation in political perception of citizens across countries and across time. In India, they sample roughly 2000 people, which is enough to get a good estimate at the all-India level. Their measurement is likely to have an urban bias. [the data]

The first interesting area is support for the free market. Their question is:

Please tell me whether you completely agree, mostly agree, mostly disagree or completely disagree with the following statements: Most people are better off in a free market economy, even though some people are rich and some are poor.

In India, 62% of those polled agreed in 2002. This number went up to 81% in 2009. In 2009, this was the biggest proportion (of support) across the G-20 countries.

On one hand, one wonders about how this question was translated into local languages and properly understood by respondents across the country. These difficulties would afflict all years. Even if there are some systematic problems in translation and comprehension, these cannot generate the rise in support from 2002 to 2009.

The second interesting area is support for globalisation. Their question is:

What do you think about the growing trade and business ties between India and other countries - do you think it is a very good thing, somewhat good, somewhat bad or a very bad thing for our country?

It is interesting to note that this question is about globalisation more broadly, and not narrowly international trade. Here, support in India grew from 88% in 2002 to 96% in 2009. Once again, in 2009, support in India was the highest in the world.

Why is support for globalisation so strong in India, when compared with industrial countries? One dimension of this could be the sense that for India, there is only gain and no real down side to integrating with the world economy. In contrast, in rich countries, many people fear losing their jobs when facing competition with producers in India.

Another piece of evidence on these questions is found in the CMIE Consumer Pyramids data, where we get a measure of the fraction of voters who support Left parties. The overall number in the CMIE data stands at 5.4%, which is roughly consistent with the vote share seen in election data. Perhaps this is the hard-core constituency which opposes the market economy and opposes globalisation.

Urban Left support starts out at roughly 2% at age 20, and grows to 4% by age 40. India's median age is 26, and urbanisation is increasingly important. The opposition to market-oriented economics that is implied by support for Left parties is thus weakest in this most-important group (the young and urban). This might have induced a bias in the Pew Institute results, where sampling has an urban bias.

This age dimension might help us better understand the divergence between the broad sense that India is fairly dirigiste as opposed to survey evidence which suggests otherwise. Perhaps the leadership in ideas of government, political parties, media and intelligensia is disproportionately made up of older people. As an example, a person at the peak of his career at age 50 is a person born in 1960 with formative experiences in an India that is almost unrecognisably different from that found today. Another aspect lies in the growth experience: for a person born in 1980, the last 30 years have been a period where India has done relatively well and been more successful. This experience with success in the formative years may generate greater confidence.

Household surveys measure the situation with a random sample of the population, and half of India is below age 25. Hence, the picture as seen in household surveys is an unfiltered reflection of India as it is, giving greater importance to the views of the young. Perhaps there is a very different un-socialist India that is now rising up from below. If this is indeed the case, the positions of government, political parties, media and intellectuals could shift significantly to the right as the generational change takes place over the next ten to twenty years.

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