This is the second part of a two part series on value systems and public policies. Read the first part here.
“We the people” form a nation. The feeling of a shared identity about who ‘we’ are, is formed by a shared history which makes us into a ‘nation’ distinct from others. ‘States’ are systems of institutions with jurisdiction within a geographically defined political boundary. The boundaries of nations and states do not always coincide.
Governance jurisdictions of states have been redrawn over the centuries through wars spurred by religious and ethnic differences. The seventeenth century Westphalian Peace Treaty, which created the concept of nation-states, sought to end continuous wars in Europe by establishing the principle of inviolable state boundaries. The UN Charter is founded on the Westphalian principle that countries should not interfere in other’s internal affairs, including the rights of all the citizens within the geographical boundary of a state to choose how they will govern themselves. New nation-states have been created since the founding of the UN which do not correspond with historically defined ethno-cultural boundaries: Pakistan and India, Israel and Palestine, and the Sudan, for example. Nevertheless, under international law, the people within the geographical boundaries of a nation-state must be free to choose their own form of state – ‘secular’ or ‘religious’, and their own form of governance – ‘socialist’ or ‘capitalist’.
States are systems composed of political, social, and economic institutions. Douglas North, who won the nobel prize for Economics in 1993 for his work on institutions, defined institutions as “the humanly devised constraints that structure human interaction. They are made up of formal constraints (rules, laws, and constitutions), informal constraints (norms of behaviour, conventions, and self-imposed codes of conduct), and their enforcement characteristics.”
Socio-political systems are complex, self-adaptive systems in which the minds of their designers are situated within and formed by the system. Whereas designers of complex, machine-like systems sit outside the system they design on an external, objective perch. Twentieth century, mathematised models of economies view an economy as a machine-like system in general equilibrium. Human emotions are externalities in their rational models.
Movements of socio-political change are propelled by aligned aspirations, not by written constitutions. Change comes first, and the constitution afterwards. A written constitution may be a sufficient expression of the aligned aspirations of a nation at one moment in its history. All citizens were not granted equal rights in the US constitution in 1787: women and coloured people obtained these rights later, and people of various genders have begun to be treated equally only in this century. These new rights, not explicitly mentioned in the US constitution, have emerged from an ongoing civilisational debate peppered with struggles – some peaceful, some violent.
Conceptions of “freedom”, “liberty”, and “human rights” are not cast in stone. They are always works in progress. In 1864, Abraham Lincoln said, “We all declare for liberty; but in using the same word, we do not mean the same thing.” Written constitutions, which courts must follow, state what the will of the people was at some prior time in history. The will of the people changes as ideas of human rights and liberties evolve. Therefore, good democratic governance requires a robust process for those who govern the people to continuously listen to the people. Because people, not courts, shape the norms – the “unwritten rules”– of their societies.
Citizens want many things and may not agree about everything. Human beings’ preferences are formed by combinations of many factors in their histories and their present circumstances; also, by what they value most, which may not be the same as other citizens. Therefore, true democracies are created when citizens listen deeply to the points of view of people who they think are “not like them” in their own societies. With deeper listening to others’ perspectives, they will see the shape of the whole system, and realise that their insistence that their solutions with their biases must be imposed on all, which powerful people and powerful nations can, will harm the resilience of the system of which they are only a part. This is the cause of the tragedy of humanity in this millennium.
Systemic reform
The health of a complex system can be destroyed when reforms of one part harm its other parts. This is a principle good doctors understand. Improving the health of the heart alone with specialised solutions can harm the health of the liver, or vice versa. Therefore, medical specialists who wish to improve the well-being of a human person must begin with a good general map of how the various biological and mental systems of a human being interact with each other. Similarly, all socio-economic reformers must have a map showing the connections between the sub-systems of the state.
Systems thinkers often use a diagram of an iceberg in the ocean to explain structures of complex systems. Visible above the waterline are the trends of data which reveal the performance of institutional structures which are less visible below the waterline. Deeper beneath them are the values and beliefs upon which institutions are formed.
Broadly, the system of governance of a state is composed of: (1) two sets of institutions – economic institutions and social institutions; (2) interactions of these institutions with the natural environment; and (3) the process of governance that shapes the state’s policies.
The system diagram below places the values driving the governance system in its center from where they radiate into the principles of formation of social and economic institutions, and also guide the process of policy formation.
Figure 1: Conflicting Value Systems (Representation by Arun Maira)
The diagram reveals the conflicts between money values and human values that guide the various actors whose interactions form the policies of the state – politicians, economists, business executives, think tanks, consultants, civil society organisations, and others. The greater the weight of private sector economic actors in policy formulation, the larger is the weight of money values in the governance of the state.
Business leaders are admired for taking bold decisions to increase investor’s profits regardless of impacts on the lives of people. US President Donald Trump has tasked Elon Musk to clean out the US government. The Trumpian right idolises Javier Milei, Argentina’s president, who says his “contempt for the state is infinite”. The Economist (November 28, 2024) says Milei has applied “one of the most radical doses of free-market medicine since Thatcherism.” It reports that though a battered economy is showing signs of recovery, austerity has caused an increase in the poverty rate which has jumped to 53% in the first half of 2024 from 40% a year earlier.
Bold surgeries create disruptions in the functions of complex systems. Good doctors understand that radical surgery of any diseased organ within the system can damage other organs. Also, that their patient’s weakened health is most vulnerable during the post recovery period even after a successful surgery. All-round benefits of radical economic reforms take many years to be realised. The poorest, who are already the most vulnerable, suffer the most during transitions. They are exhorted to endure their sufferings for the sake of the good of the economy; while taxes of the rich are reduced, and ease of making profits is improved so that they can get better returns from their investments.
After the 2018 financial crisis, ‘too big to fail’ financial institutions were protected, while ‘too small to survive’ citizens sacrificed their homes and livelihoods. The poorest and most vulnerable citizens, who will be most affected during the transition, must be consulted before the reforms. The burdens they must bear should be anticipated, and measures planned beforehand for their mitigation. Otherwise, there will be political resistance to implement the reforms, as highlighted in the International Monetary Fund’s (IMF’s) analysis on resistance to IMF-compliant reforms.
Reforming the process of policy formulation
In our view processes of policy formulation at the global level and within India have become excessively dominated by economic and financial valuations with less weight for community and human values.
The top-down institutional structure of governance is also failing because it is based on an un-systemic view of global problems. Let’s think scientifically for a moment. There are 17 Sustainable Development Goals (SDGs). All of them must be addressed faster. Moreover, none of them can be solved by themselves because they are interlinked with others. Each of the SDGs is not manifested in the same way everywhere. Problems of environment and climate are not the same in Alaska and Barbados, or in Uttarakhand and Kerala. Problems of livelihoods are quite different in the slums of New York and rural Bihar. Therefore, all problems must be solved locally. And, everywhere in the world, at least seven of the 17 problems of the SDGs must be solved urgently.
Forecasters estimate that SDGs will be achieved only by 2087 if we persist with the present top-down and siloed approach of problem-solving, whereas the aim was to achieve them by 2030. Let’s do some mathematics. How many different combinations can there be of seven problems at a time taken out of 17? 94 million. The problems of the 17 SDGs are manifested on the ground, and they take different shapes everywhere. Clearly, one size solutions developed by global climate scientists or global health experts will not fit local realities everywhere. We need a new paradigm of problem-solving. Local, community-led systems solutions are the way to solve global systemic problems of inequality, social disharmony, and environmental degradation.
Also read: GDP Data Shows India Faces Dual Income Trap
The well-being of individuals depends on the well-being of their societies and natural environments. Medical science has established that social and environmental conditions significantly impact the biological and mental health of individuals. Furthermore, research suggests that more sustainable and cost-effective solutions for improving public health lie in enhancing the social and environmental conditions in which people live, rather than relying solely on high-tech medical solutions. These scientific insights require changes in the design of public policies and measurements of their outcomes. Policies should focus on interventions in the conditions of social, environmental, and economic systems in which citizens live rather than on benefits for individuals. Impacts of public policies should be measured by the strengthening of local community systems, rather than delivery of benefits to individuals within them.
The governance of environmental, social, and economic systems must be aligned. The prevalent approach to organising at scale involves breaking down systemic problems into manageable parts, which are then addressed by specialists. Solutions in silos often harm other parts of the system. Solutions to grow the economy with man-made infrastructure destroy the environment. Solutions for increasing the productivity of agriculture by applying more chemicals and replacing farmers with machines, reduce the productivity of soils and so more chemicals are required. Meanwhile, displaced farmers are unable to find employment in manufacturing because, simultaneously, humans in factories are being replaced by robots to increase the productivity of factories.
The 21st century paradigm of governance has too much “I” and too little “We”; too many silos with too much competition and too little collaboration. The architecture of global governance must be reformed. Local systems solutions collaboratively developed by communities is the scientific way to solve global systemic problems. And since the natural boundaries of environmental, social, and economic systems do not match, multiple, overlapping, democratic forums, cutting across boundaries, are required for good governance. All must not be forced into a top-down vertical structure of political control.
Policies must not be imposed on Indian citizens by foreign powers and foreign experts. “We the people” within the boundaries of India delineated on a map in 1947 adopted a constitution to guide us in 1951. We adopted the democratic principle that government must be not only of and for the people, but by the people too. The people must choose, together, what type of society they want to live in, and what form of economy suits their evolving needs.
A government formed of the people, with elections of representatives of the people, is not sufficient to make a democracy. To truly be a democracy, people must participate in the formation of the policies by which they will be governed. Policies must not be imposed on them without their participation. Experts must listen to the people. Also, we the people must learn to listen to each other to understand different points of views of the citizens of our diverse country, who have different ethnic histories, cultural diversities, and speak different languages. That is the only sustainable way to create harmony and improve the well-being of everyone.
Arun Maira is a former member of the Planning Commission and former chairman of BCG India. Sarthak Shukla is a doctoral student at the Department of Urban and Rural Development at the Swedish University of Agricultural Sciences, Uppsala.
