Panel No. 35

Panel Title: Federalism in South Asia

Convenor: Dr. M.C. Lall, Institute of Education, University of London, UK

   Friday 9 July, 13–18

Panel Abstract: We are aiming to focus on the relationship between nationalism and federalism in the nation states of South Asia. Each nation state in South Asia has attempted in the post-colonial period to build an over-arching centralising nationalism. A combination of economic, political and cultural strategies have been adopted by the nation states to realise the objective of constructing a centralised BIG nationalism. This political project has faced resistance from subnationalist identities. Such a resistance has either led to compromises between the centralising nationalism and sub-nationalisms or suppression of sub-nationalisms or a combination of the two. South Asia has witnessed a varieties of such resistances, compromises and suppressions.
We would welcome any paper dealing with the themes outlined above. This does not, however, mean that we would not accept a paper which explores a dimension of South Asian federalism which does not fall with in the ambit of the focus mentioned above.
On the contrary, we would warmly welcome a paper which is able to argue a critique of the above-mentioned framework for studying federalsim in South Asia as a whole or in any particular country of South Asia.
Finally,we would also welcome any paper which explores the implications of globalising tendencies in the world economy for federalism in the South Asian countries.

Papers accepted for presentation in the panel:

Paper Giver 1: Dhirendra Vajpeyi, and Dubravka Svetina, University of Northern Iowa, Cedar Falls, USA

Panel 1 Title: How Much Autonomy? Conflict and Cooperation between National/Federal and Local Policymaking in South Asia

Panel Abstract: For quite a while both policymakers and scholars have debated and hoped to come up with a paradigm which would guide them in providing an analytical-explanatory framework as to ‘how much,’ and ‘how’ (style and substance) of the power sharing between the constituent unites (local, state, and national) of a political system is conducive to economic and political modernization. Ideas and proposals related to federalism and unitary systems have been visited and revisited with much discussion about recent trends in ‘paradigm shifts’ (Elazar 1996: 417-429). My paper discusses several issues related to this debate by taking two case studies from Asia – China and India. The discussion does not claim to have found any ‘final’ or ‘intermediate’ solutions. It, however, does not only join and reviews main arguments of this debate but makes a few ‘prescriptive’ observations in the in conclusion.

Paper Giver 2: Pritam Singh, Business School, Oxford Brookes University, Oxford, UK

Paper 2 Title: Centre-State conflicts as conflicts of competing nationalisms in India

Paper Abstract: The dominant discourse on Centre-state relations in India focuses mainly on the question of distribution of administrative and financial powers between the Centre and the states. This paper argues that behind the Centre-state conflicts lie deeper and structural issues relating to the question of one nationalism versus multiple nationalisms in India. The triangular relationship between Indian capitalism, the Indian State and Indian nationalism is the over-arching framework to locate this argument. It is my contention that the relationship between Indian nationalism articulated by the Centre and the nationalisms based in the states (especially in the non-Hindi speaking ones) is the fundamental cause of conflict between the Centre and the states.
The change in the economic policy regime from planning to liberalisation in 1991 and in the political policy regime from secular nationalism to Hindu nationalism in the 1990s and now back to secular nationalism in 2004 is examined to argue the validity of the thesis that Centre-state conflicts are manifestations of the conflicts between centralising Indian nationalism and autonomy seeking nationalisms in the states.

Paper Giver 3: Tariq Rahman, National Institute of Pakistan Studies, Quaid-i-Azam University, Islamabad, Pakistan

Paper 3 Title: The Linguistic Threats fo Federalism: Ethnic Politics in Pakistan

Paper Abstract: This paper examines the threat to federalism in Pakistan. It focuses upon a particular aspect of it---the role of language as a symbol of ethnic identity. It begins with the Bengali language movement (1948 and 1951) which asserted itself against the perceived domination of the West Pakistani ruling elite over what was East Pakistan at that time. In West Pakistan itself language was used to mobilize Sindhi, Pashtun and Siraiki identities. All of these movements offered resistance to the hegemony of the centre. In Sindh’s case, however, the resistance was more to the Urdu-speaking immigrants (Mohajirs) who had came to dominate the urban areas of that province. In Balochistan, militancy took predominance over language as a means of resistance because of the lack of a viable educated intelligentsia in the province.
Language constructs identity and, therefore, helps to ‘imagine’ an ethnic community. Hence it clashes with the competing federalist construction of the transcendent national Pakistani identity. In short, to understand federalism in Pakistan it is necessary to see the role of language in the politics of Pakistan.

Paper Givers 4: Lawrence Sáez, London School of Economics, UK and Aseema Sinha University of Wisconsin at Madison, USA

Paper 4 Title: Decentralization, Economic Reform, and Local Public Goods Provision: Evidence from Indian States

Paper Abstract: The social choice literature on decentralization has extensively examined the relationship between redistributive aspects of federal policy and exogenous variables such as economic growth, risk sharing, mobility, and intergovernmental differentials. There is, however, a gap in the literature showing how ancillary policy variables have affected the regional provision of public goods under conditions of globalization. Based on the authors’ past research on regulatory and investment policies, we anticipate some effects of globalization on state-level welfare state provisions. In this paper, the authors will concretely focus primarily on measuring changes to the provision of public goods, namely education, health care, water supply and sanitation, housing, and irrigation and flood control, in 17 major Indian states from 1980 to 2000. Building upon Besley and Coate, in this paper we examine whether a “race to the bottom” phenomenon has occurred across Indian states since economic reforms and decentralization began in the early 1990s. The paper will present concrete empirical results that show that decentralization under conditions of globalization appears to be negatively correlated with the provision of public goods confirming that a race to the bottom is evident across Indian states.

Paper Giver 5: Bilal Siddiqi, St. Antony’s College, Oxford, UK

Paper 5 Title: Decentralization and Accountability in Indian Fiscal Federalism: A Principal-Agent Analysis

Paper Abstract: Federations are typically characterized by a high “vertical fiscal imbalance”, where despite expenditure decentralization and political devolution, revenue collection remains highly centralized. Subnational governments are dependent on transfers from the centre, making inter-governmental fiscal decisions the outcomes of politically driven negotiations; lower-tier governments are inherently bound in an adversarial, strategic interaction with higher tiers.
We capture this process of political negotiation within a two-tier governmental structure, using Principal-Agent theory as our entry point. Local governments have access to information about local conditions and face a cost advantage in production of local public goods. When the costs of the local government are private information, the local government can use its information advantage strategically to extract higher transfers from the central authority. We show that in this situation, the centre gains with the establishment of local accountability mechanisms, which re-align local government objectives with its own and allow it to control local spending to its advantage. However, with fiscal devolution, the centre loses control over local spending decisions and is unable to consolidate its political position as before. We illustrate and motivate our argument using the case of Indian fiscal federalism.
We thus present a hitherto unexplored dimension of the determinants of fiscal policy in federal structures: that the existence of a vertical fiscal imbalance in the presence of local accountability mechanisms serves to re-align the political-economic objectives of different tiers of government, to the centre’s advantage. Our argument casts light on the efficacy of decentralization as a blanket policy for reform: decentralization of expenditure without fiscal devolution is to the advantage of the centre and may come at the expense of the stated objectives of reform.

Paper Giver 6: Polly Datta, University of Hilferding, Germany

Paper 6 Title: Political Economy of Federalising Process of West Bengal and Feeling of Discrimination during the Pre and Post-Left Front Era

Paper Abstract: If one follows the discourse of politics of discrimination in West Bengal since Independence one would notice that there has been a qualitative change of conceptualisation of the term ‘discrimination’ over the period. First three decades after Independence, Indian federal structure was characterised by unchallenged unity and consensus. Even during that time West Bengal said to have retained it’s independent position and the relation between the Centre and West Bengal was more conflict prone than other States in the Indian federation. Nevertheless, the Congress government in West Bengal during the pre-Left Front era did not want to rebel against the structure of the Indian federation nor they demanded any far reaching radical change of federal system of India through amendment to the Constitution. All they said was that if Constitutional provisions of vertical resource transfers followed properly sufferings of West Bengal would have been minimised.
However, such style of bargaining underwent sea change soon after the United Front came to Power (1967-69) in West Bengal. During their short tenure the government laid the foundation of asking for radical change of the federal structure of India which was further consolidated by the Left Front government soon after it came to power in 1977. In the course of time there has been a considerable shift from the radical position to a more accommodating position. This trend became more apparent with the introduction of the New Industrial Policy introduced by the West Bengal government in 1994 as a part of economic liberalisation since 1991.
Hand in hand with this trend, at the political plane, while addressing electorate, the Left Front government brought the populist stance of being discriminated against by the Centre. And made the Centre responsible for it’s present deterioration. Consequently the demand for radical restructuring of the Indian federation which was pursued by the Left Front during the late 1970s and early 1980s started being overshadowed by this slogan.
Therefore, it remains to be seen to what extent such shift i.e., change of gravity of demanding for radical restructuring of federal set up of India to being confined to asking for mere operational area of the Centre-State financial relations lies in the lack of clarity of the Left Front government’s perception regarding this issue. And to what extent the embryo of such shift was already apparent in it’s idea of radical restructuring of the Indian federal system from the very beginning. Which has been eventually manifested in the State-local government relations in West Bengal.

Paper Giver 7: Subin Nijhawan, School of Oriental and African Studies, London

Paper 7 Title: Decentralizing political power to the grassroots – The experience of the panchayati raj in India

Paper Abstract: On 20 April 1993, the 73rd Amendment to the Constitution of India came into effect. It can be seen as an attempt of the Government of India to “revitalize” the village panchayats, which albeit enshrined in Article 40 of the Constitution of India had thus far not possessed adequate resources in order to become an effective political institution.
The 73rd Amendment represents a new phase of devolution of power and indeed has the character of a tacit revolution. While in the past India’s political destiny mainly lay in the hands of the strong center, the 1990s can be described as the decade of decentralization of political power and legislative competence from top to the federal states and to the grassroots. Not only have the state governments achieved more authority, but the gramsabhas also have the capability to become the driving force for the development of rural India in some states, as the example West Bengal suggests. One of the pillars of Gandhiism is about to become the driving political force in post-modern India.
Yet, the experiences with the panchayats in India have to be assessed in a more differentiated way. There is no blueprint on how the panchayati raj system actually works. On the one hand, West Bengal serves as a positive example. The panchatays there administer approximately 50 % of the tax revenue and are the chief contact point for the people and their urgent needs. They have been interwoven with the structure of political parties, thus the decision-making at the local level will be transmitted to higher authorities, up to the Lok Sabha. On the other hand, Bihar exemplifies the opposite. Communal conflicts – like caste and religious conflict – mainly take place within the gramsabhas. The panchayats there are indeed institutionalized for communal conflicts. Punjab will serve as the third example. The development of panchayats in India’s “granary” states from the 73rd Amendment onwards has not been extensively studied yet and hence serves as an interesting field to evaluate the experience of local governments in India.
This paper endeavors to scrutinize the panchayati raj institutions with a comparative approach. Why does this innovative political system function properly in some states, whereas the experience in some other states is rather negative? Bengal and Bihar are the chief examples for the both extremes, but examples from other regions should give a more comprehensive image. It also examines whether the panchayati raj system can be seen as an effective means of conflict resolution for the center, which finally helps to stabilize India’s heterogenic formation.