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Can Good Economics Ever Be Good Politics?
By Praful Patel
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Reform programs all over the world often come to grief because of the lack of sustained political will. A reform strategy might be technically and economically sound and the intended beneficiaries many, but implementation often stalls because of lack of sustained political commitment to reform. In recent years, the power sector in several developing countries has suffered from this frustrating gap between strong, pro-reform rhetoric at the political level and weak, hesitant implementation of the reform measures on the ground.
This paper takes a fresh look at the problem of the rhetoric-implementation gap by taking the lack of political will as its starting point, and analyzing its causes in the current context of India. Though focused specially on the recent experience of power sector reform in India, its observations and conclusions will be of interest to those advocating similar reform Programs, in democratic environments, in developing countries across the world.
Working from the assumption that people and institutions are not impartial but rather respond to political and economic incentives, this paper examines the incentives, informal relationships, and interests that govern the behavior of key stakeholders in differing times and circumstances, and searches for the openings and opportunities that reformers must pursue if they are to obtain support for their initiatives.
The paper concludes that political will for reform can be created if reformers first display flexibility that will allow governing politicians to negotiate options and mediate conflict among the multiple constituencies they serve. The reformers technical, regulatory and implementation formulae can work only if the right incentives for those who must implement the reform are first developed in this manner. Or, stated differently, the ultimate success of any reform program requires that there be an explicit melding of the political with the technical. If these two tracks are not joined together, the proposed reforms are not likely to succeed.


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