CHAPTER VII

ABSTRACT

The needs of health, sanitation, education, etc., cannot be satisfied individually. These are social needs unlike the consumption of food, clothing, etc., such needs can be satisfied only by social action. The market mechanism based on self-interest can allocate resources for the satisfaction of individual wants. But such allocation may leave unfulfilled even the private need for the basic means of livelihood of some people. Public finance assigns to the state the entire responsibility of satisfaction of social wants and assurance of the basic means of livelihood of the people. The state is to carry out this responsibility by means of a democratic political system. But in reality the need for social wants is felt by integrated social groups. If such integrated social groups, called civil societies, were granted an autonomous role in the determination and implementation of social wants, the social services could be shaped more according to the preferences of the people, and responsibilities could be better assigned to them in their role as members of such societies.

The political and economic history of India over the periods of British rule and especially after the independence of the country have led to the predominance of state and political parties and the marginalization of society. Unlike Western European countries, India neither went through a history of formation of civil societies under modern conditions nor experienced any interaction of social institutions with the democratic state for gaining autonomy. Through education and publicity, consciousness about the need for civil societies has to be created in India. A long term perspective regarding the self-interest of individuals may serve as a preliminary experiment for realizing the importance of civil society in the fulfillment of social needs.

THE ECONOMICS AND POLITICS OF PUBLIC FINANCE

Any standard textbook of public economics starts with a description of various types of needs which cannot be fulfilled by the market. These are called market failure in the conventional jargon of economics. The three familiar cases of market failure are supply under increasing returns to scale, externalities in consumption, production and distribution, and the provision of public goods. In his celebrated book, The Theory of Public Finance, R.A. Musgrave used the term "Social Wants" in place of what is now commonly called "Public Good". The term "Social Want" made the social role of the consumer for these type of wants more explicit and could have been taken as a hint to the study of human behavior and institutions involved in their satisfaction. However, Musgrave went ahead by assigning the entire role of the satisfaction of "Social Want" to the state. The term "Public Good" originates from the dichotomy between private household and public household and does not leave any scope for considering the role of social institutions formed of private households and performing independently of the public household of the state.

The problem of public goods is sometimes shown as the extreme form of externalities. The conventional types of analyses and formalizations leading to optimal and market-clearing solutions were described as an engineering approach by Amartya Sen.1 In addition to the standard cases of market failure in the textbooks of public finance, arguments are presented in support of intervention in the functioning of the free market under certain situations. One such situation is the existence of a monopoly power on the part of some suppliers of commodities. In certain other situations people may consider it desirable to provide children some nutritious food or vaccine against a contagious disease at a price lower than their cost of production and, on a parallel logic, to charge a price higher than the costs of production on articles of addition. In all these cases, either the good cannot be provided by the market or, even if it is provided, the provision will be either inefficient according to the principle of allocation of resources or not optimum according to some standard of social welfare. The two fundamental theorems of welfare economics provide the economic criterion of efficient allocation of resources and scope for prior redistribution of resources among the agents, so that the ultimate efficient allocation of resources could also be socially optimal.

All these functions of redistribution of resources, correction of externalities, provision of the public good, promotion of consumption of merit goods, discouragement of consumption of demerit goods and, finally, moderation of the market for attainment of efficient allocation of resources are taken to be assigned to the government. The economic needs that remain unfulfilled in the market are trusted to be properly executed by the state. The standard textbooks on public finance do not raise any doubt over the capacity of the state in carrying out functions in the areas in which markets fail.2 James Buchanan raised questions regarding the ability of the state to make arrangements for providing the goods and services and executing the tasks in which the market failed.

In economics the concept of market is based on transactions according to the self-interest of the agents. These same agents in their capacity as citizens constitute the state. The citizens are assumed to perform according to their self-interest in the markets and, simultaneously, as members of the state, they are to be assumed to correct the failures of the market for which the citizens themselves are responsible. The representatives of the citizens in the legislatures and the persons in the executive are also, in their individual capacity, economic agents in the market. So, Buchanan contends that assignment of the entire responsibility for the correction of the market to the state implies a dichotomy in the personality of the citizens.3 On the other hand, avoidance of any question regarding motivations of the individuals constituting the state and the assumption of the state as a monolithic entity isolated from the self-interest of the citizens amounts to neglect of the political aspects of the problem. Buchanan advocated that, together with the assignment of functions to the state, it is essential to conceive of a structure of the state in which execution of the assigned functions would be feasible.

As a model of a political system for execution of the economic functions assigned to the state, Buchanan suggested administration based on various types of rules. The rules are framed by majority vote in the legislature. The scope of revision of the various rules will depend upon the social cost of such revision. The social cost involves the cost of time required and tensions and strains suffered in the resolution of the disagreements among different groups of people, as well as the associated financial cost.4 The scope of revision of various rules could be variously restricted by specification of the qualification of the majority required for such revisions in the legislature and the minimum interval of time over which no revision would be permitted, and the rule would remain valid. This is the positive theory of public good of Buchanan. But such rules do not provide any safeguard for what is called "the free riders problem". The same person who had subscribed to the framing of a rule as a member of the legislature can very well evade the rule as an individual agent in the market. The required payment for a service can be evaded and a free ride may be taken on a public service. For this purpose, if necessary, collusion can be formed between the agent in his capacity as individual consumer and representative of the state administration.

Buchanan also indicated that the chance of detection of evasion is higher in a small community than in a large community.5 Where there is higher risk of detection, an individual would realize that fellow citizens in the group would also withhold their contribution to the cost of the public service and thus the entire service would not materialize. This brings the matter down to the basic issue: civil society, politics and the state.

A public service can be provided through the initiatives and supervision of small beneficiary groups. Different beneficiary groups formed for the realization of various aspects of social welfare are the civil societies.6 These groups constitute the social entities and are not to be identified with political organizations. Political organizations crystalize into political parties recognized by the state. Their ultimate aim is to control the center of power of the state. Any activity at the local, or grassroot level of a political party has to be consistent with decisions of the central committee of the political party. On the other hand, civil societies can function on particular issues or for the realization of particular objectives autonomously, independently of any need to maintain consistency with the motivations and interests of any central body.

Although the relationship between civil society, political system and economic development is a highly important matter and merits careful analysis, so far it has remained almost neglected in the various scientific disciplines. Classification of goods and services into public and private to some extent depends upon the social arrangements and political systems. Even for privates goods, the allocation of resources depends upon the definition of rights and the availability of information. The rights basically are defined in the constitution of a state, and in that respect these are political matters. But actual enjoyment of rights by the citizens to a very large extent depends on social awareness and an appreciation of the nature of interdependence between the individual and society in a state. Social awareness, the realization of the need for dissemination of information, arising out of a sense of interdependence between individual and society, are aspects of the culture of the citizens of a state. The culture of the citizens evolves through the historical experiences of the people and crystallizes into particular types of correspondence between economics, politics and the social situation of a state.

During the formation of the capitalist system and particularly under the industrial revolution, commercial and industrial towns were established and developed in Western European countries. The leaders of such towns formed enfranchised boroughs and purchased or won rights from the monarch for autonomy on various civil matters. The civil societies in Western Europe grew with the growth of trade and industry and engaged in continuous conflict and negotiation for the sharing of power with the political authority. The question of the relative priority of civil society and the state in the determination and control of various rights and functions of the citizens engaged the scholars and statesmen in continuous debate in England, France, Germany and the United States in different periods of history since the early 18th century. The idea of the state as a dominant civil society, having priority over the various social organizations and groups, also emerged with the progress of democratic systems in the Western European states.7

Ralph Dahrendorf has recently expressed concern about the changing relationship between economics, politics and social situations in the wake of globalization in the economically developed Western countries. According to Dahrendorf, the problem of readjustment between these different aspects of a state are being resolved by particular types of authoritarianism of the state in the East and South-East Asian countries.8 This type of general state in India has a different set of features from those of most of the East and South-East Asian states. These features are obviously historically determined. The change of culture following from the evolution of history that has led to the marginalization of civil society and predominance of the political factors in India merits a thorough analysis.

STATE AND SOCIETY IN INDIAN POLITICS

Among civil societies, political organizations and economic forces, political organizations have achieved predominance in India. The economic policies of the state are largely shaped by the political system. The social forces have almost lost their independent role in the system of management of the country. This development emerged through a monatomic, unilinear course of events of the history of India over the last two and a half centuries. The British colonial government organized the state of India in a manner such that the coordination of activities of the whole country was entirely brought under the control of the center of political power. The nationalist movement for freedom of the Indians against the British rulers was mainly directed towards winning over that centralized control of congress by the Indian political party from the British colonial power. Before the advent of British rule in India, political activities were limited to the relationship of the monarch to the people. There was no political party and no movement for delegation of political power to any group of people. Rajni Kothari wrote the following about the role of politics and social aspects of life in pre-colonial India. Under the Hindu social order:

Changes in political fortunes did not greatly affect the business of social living. Dynasties rose and fell, empires spread and collapsed, but much of Indian society went on its own way. . . . Development of political dominance and administrative hierarchy (in the Muslim period) had no great impact for local institutions and village affairs, and still less on habits, beliefs and traditions of the masses of people that lived in the villages. For the most part, old forms of social and occupational organization continued.10

Monarchs had their seat of power in the very few towns which were of comparatively smaller size. The overwhelming majority of the population lived in the villages and were guided by a cultural milieu of social customs and practices. These social customs and the associated culture were founded on the value system of the people. Many of the services nowadays called public good in the theory of public finance were mainly provided and regulated by the village societies. To some extent the values that determined the culture and shaped the social system were derived from the various concepts of Dharma or principles of human behavior as laid down in the epics and in the basic texts of religion and ethics. Concentration of economic power at the center of political authority by the British colonial government led to a shift of wealth, as well as the literate upper section of the society, from the villages to the towns. Some of these towns were newly established by the British colonial power, the remaining were selected for their advantageous location for British interests of commerce and administration. The rest of the country, consisting mostly of villages and some old towns, which were deprived of their importance under the new system of coordination of activities for centralization of power, lost most of their traditional control over the public goods.

During the independence movement there was a considerable amount of debate among the nationalist leaders on the need in the economic development of the country for centralized political power, on the one hand, and decentralized social institutions, on the other. This debate is often epitomized as the difference in the economic and social programs of Gandhi and Nehru.11 Both Rabindranath Tagore and Mahatma M.K. Gandhi, irrespective of their differences in matters of detail, upheld the need for a revival of village societies for the provision of such aspects of public good as health, sanitation, education, drinking water, irrigation and control of externalities for productive activities of cultivation, small-scale industries and trade. Both tried to substantiate their principles with the examples of practices in ancient India and had high regard for the ways of life in the hermitages described in the epics and the classical Indian literature. British rule had introduced the poetical ideals of democracy and the welfare state in administration. The nationalist leaders of India were trained in the political ideals that emerged from the industrial revolution of Western Europe.

The freedom movement was mainly organized towards the mobilization of support of people for the achievement of political power over the state. British rule had consolidated the administration of various regions of the country into a centralized power. Regional political forces lost their importance and were subsumed under a central political force. The Indians inherited this centralized form of politics and administration, and all political parties, both before and particularly after independence, put high emphasis on their national character.12 The nationalist leaders gave very little attention to the generation of a culture for assuming social responsibilities under changing economic conditions. The attempts of Gandhi, Tagore and a few other nationalist leaders for articulation and coordination of social forces and the development of a sense of social responsibility were isolated events. Notwithstanding the fact that in many cases these attempts were based on faith in the possibility of the revival of a pre-industrial form of social culture and values, there was no nationwide or widely proclaimed movement for adapting the culture and values of the people to a new sense of social allegiance. The recent trend of formation of regional political parties is a sign of awareness on the part of the various ethnic and linguistic groups of their share in the control of state politics. But such political parties cannot be expected to bring about the institutional changes necessary for promoting autonomous civil societies.

Civil societies are formed to achieve selected social objectives independently of the state. In a nation with well-developed civil societies, an individual can be simultaneously a member of various social associations and organizations. These different organizations are supposed to function for the fulfillment of different social needs. This is a system of pluralism in which no social formation is assumed to subsume the role of any other social formation. Thus, an individual as a social being, under such a situation, could be simultaneously a member of a labor organization for his sustenance, a parents organization for the education of his children, a community organization for the development and maintenance of facilities of sanitation and public health, and various other associations serving various other needs of the people in a society. Due to the attribution of excessive importance to the political power of the state for economic development of the country, the needs of civil societies and pluralism were completely overlooked in India.13

In order to pull the economy out of a low-level equilibrium, the state had to take a large role in the mobilization of resources and organization of economic activities in India. As a result, the state had to establish and maintain organizations and public bodies for providing various different services. The political parties, in their endeavor to gain control over the center of power, automatically established control over different aspects of the economy. Irrespective of the ideology of the political party, the direction flowed from the center to the local areas. The local associations and societies are manipulated for strengthening the hold of the center. The social organizations in the various regions and localities have to depend on the central political leaders for fulfillment of any local need. Thus the social organizations of laborers, parents, students, and residents of civic areas become affiliates of central political parties, completely devoid of autonomy. Here it is necessary to sort out the difference between the so-called control of political parties at the grassroots level and the autonomy of civil societies. Government will have to take a predominant role in the mobilization of financial resources in a developing country like India.

So, it goes without saying that most of the social services in India have to be funded by the public authority of the state. But public funding of an institution does not essentially mean abrogation of its autonomy. This matter has been almost completely lost from the consciousness of the intelligentsia. So much so that sometimes Vice Chancellors of state-funded universities put up signs stating "Government of India" on the number plate of their cars.

BASIC NEEDS OF THE PEOPLE

In a labor surplus economy like India, for quite sometime, economic development will mean satisfaction of the basic needs of the people. Around 40 percent of the population live below subsistence in India. The minimum nutritional requirements of these people for survival are not satisfied. Besides, for 90 percent of the population economic transactions are not supported by any legally defensible contract. Even most of those living above the subsistence level do not enjoy a standard of living that can be called good in any modern sense. For most of these people basic needs consist of food, clothing, fuel and shelter. These consumables, taken together, are conventionally brought under a homogeneous and measurable scale of per capita consumption in monetary terms. For a long time, by economic development, people meant rise in per capita income in terms of money at constant prices. Since the mid-70s, increasing emphasis is being put on the different aspects that condition the quality of life. Thus health, sanitation and education are considered together with nutrition as elementary items of basic needs.14

The constitutional provision of equality of rights and opportunity restrains the state and the citizens from the violation of freedom of any person. But such legal provisions cannot ensure the existence of necessary conditions for enjoying freedom. Amartya Sen made a distinction between freedom considered as protection of rights and enjoyment of freedom arising from achievement of the rights. Freedom can be enjoyed by a persons if they can have initial access to the basic means of livelihood.15 A welfare state distributes funds for rural employment in public works and also for generation of facilities of self-employment. However, the amount of funds is scarcely adequate for the magnitude of the needs. The quality of life depends on fulfillment of various other basic needs, besides per capita consumption. In order to assess the level of satisfaction of the basic needs and also the quality of life, several other aspects like life expectancy at birth, infant mortality rate, and literacy ratio are taken together with per capita consumption. Moreover, the potentialities of economic progress and opportunities for the achievement of the facilities of life may be assessed by indicators of transport communication, irrigation and energy. These various indicators, like per capita consumption, life expectancy at birth, literacy ratio, length of road per person, and so on, are separate items and cannot be put together into the construction of a common homogeneous index. These various items, even when kept separate as elements of a vector, do not provide any idea about their quality. The quality of education or quality of roads cannot be deciphered from the figures measuring ratios and lengths of the respective items. The above items are merely some examples of the public responsibilities of redistribution of income and public goods of various types. In India these services are provided by the state. They are considered as goods and services constituting the social want aspect of the basic needs of the society.

A question arises about the efficiency of the state in the provision of public goods. The quality of service cannot be maintained without social vigilance. Even the quantity of service would be affected by leakages in the process of transfer from the source of the service to the ultimate target beneficiaries. The particular nature of the services, such as sanitation, public health facilities, communication, social conservation, etc., cannot be properly selected and generated without participation of the beneficiary. Social participation in the generation of public goods at the local level helps to shape the service according to the preferences of the targeted population and can better promote social welfare. The system of financial audit simply checks whether the funds are utilized according to the norms of allocation which were set by the legislature. The executive has to take the sanction of the legislature on the broad outlines of allocation of resources, but the former enjoys a considerable amount of freedom on the matter of details of allocation and utilization. Moreover, assessment of the quality of service is completely beyond the capacity of the audit administration.

POLITICAL CONTROL OVER BASIC NEEDS

Political parties assume a major role in indirectly monitoring the generation and distribution of public services in India. The political parties utilize this power of control over the public services as a means of maintaining their hold over the people. For the fulfillment of basic needs, be it provision of food grains or ordinary textiles or construction of roads or running of a medical dispensary, the people have to establish links with the political parties. This leads to the formation of various types of nexus between the political functionaries, bureaucracy and the economic agents, and creates complications in the dispensation of the right kind and the proper quantity of the services. Sometimes the administration takes special steps for vigilance. But such steps simply increase the cost of services without any guarantee that the standards of quality and quantity will be maintained in the long run.

The amorphous entity of the state to which the entire responsibility of correction of market failure is assigned in the literature of public finance, in reality performs with the help of political parties in India. The political parties in India are historically oriented towards control of the seat of power at the center. The basic needs of the people, instead of motivating the political parties in the formulation of programs of social action, are manipulated for establishing control over the center of state power. Here the people at the local level, instead of registering demands for public services according to local preferences, depend upon the decision of the center. The demand, instead of flowing from the various local social groups of people to the different higher levels of administration, has to be adjusted to the services decided at the center. This is the form of authoritarianism that is found to exist in a country with a huge public sector like India. Here economic development in the form of the fulfillment of basic needs is supported by the political system. There is no doubt that this political system is based on the principles of political liberty. But political liberty by no means ensures social freedom in the determination and control of means for the fulfillment of social needs. The social freedom necessary for designing the public services according to the preferences of the social groups cannot be achieved without proper autonomy of the social institutions. The autonomy of the social institutions gives shape to pluralism in society. Formation of a society based on the principles of pluralism, consisting of autonomous civil societies has certain essential preconditions in the domain of the culture of the people.

MOTIVATION OF ACHIEVEMENT AND SOCIAL BEHAVIOR

It has been stated before that prior to the advent of British rule politics did not play any important role in the life of people in India. Social and community services were provided by social groups according to the longstanding customs in the localities. With industrialization, a democratic system of government developed in Western Europe. British rule in India, on the one hand, led to dissolution of the earlier social institutions and, on the other hand, brought the ideas of modern political systems and institutions to the newly educated people of India. In the interest of economic development, the centralization of administration which was achieved under the British government, was consolidated further by the forces of state in India after independence. In this situation, revival of the preindustrial form of social groups in the localities, as advocated by people like Gandhi and Tagore, appeared as utopian.16 However, the basic principles of the development of a pluralistic society which was conceived by them may be cultivated for the derivation of new forms of social institutions that may be appropriate in contemporary economic conditions. Thus, the ideal of self-rule, "Swaraj", of Gandhi may be taken as the essence of the idea for the development of autonomous social groups.

Some people had doubted the relevance of continuation of rural reconstruction work in an educational institution founded by Tagore after assumption of the rural development work by the state as a part of national economic planning in India after independence. But the remoteness of the state from the lives of the village folk and the growth of political parties as intermediaries between the state and the various groups of people in their localities has upheld the need for the formation of civil societies. An educational institution situated in the proximity of a group of villages, following the experiments of Tagore, can very well undertake programs of rural development. Due to almost total denial of autonomy to the various publicly funded institutions by the state over the last 50 years, the scope of such activities appears to be totally lost in India. The political functionaires command control over various associations like trade unions, student unions, and other types of organizations of citizens formed for management of different local needs, and use such control as means of wielding power over the state. Due to the complete absence of a culture of functioning with autonomous bodies for providing public services, the above tendency has been sustained and crystallized into socially accepted forms over the 50 years since the independence of India.

The culture of autonomous civil societies, independent of political affiliation, can be developed through inculcation of a different set of values. A change of values from those of dependence on the state for personal gains to those of action for the generation of social services by the enterprise of autonomous bodies can be achieved through alternative motivations. In the interest of social reform and the economic development of India after independence, the government took upon itself the responsibility of large scale mobilization of financial resources. But it is necessary for the political parties to realize that public funding of services does not mean that the ownership or the agencies producing those services should essentially be vested in the state. The political parties will have to cultivate a set of values that would permit the existence of independent associations in the autonomous public bodies like educational institutions, hospitals and civic societies functioning with public funds. Civil societies, if properly empowered, can act much better as monitors of autonomous institutions funded by the government than the existing system of state audit. The members of civil societies should enjoy freedom to cultivate their motivations of achievement together with their self-interest. Amartya Sen discussed the various types of motivations starting from self-interest at one extreme to the urge for achievement on the other. In economic theory, only behavior based on the motivation of self-interest is treated as rational.

A method of derivation of conclusions based on maximization of a homogeneous entity like utility related to self-interest of individuals in a world without externality is highly valued in economics. Such a method is commended for its logical consistency. The conclusions are sometimes verified by aspects of real life. A person enjoys freedom in the pursuit of one's own well-being as well as in the pursuit of the interests of the society. The actions of a person for promoting the interests of a social institution need not have any immediate relevance to self-interest. In the book, On Ethics and Economics, Amartya Sen starts with the famous question of Socrates, "How should one live?" -- and concludes with the following statement:

Behavior is ultimately a social matter, as well, and thinking in terms of what `we' should do, or what should be `our' strategy, may reflect a sense of identity involving recognition of other people's goals and the mutual dependencies involved.17

One may think of establishing a link between self-interest and social interest through extension of the planning horizon of the individual. The matter can be demonstrated with examples from everyday life. Even educated persons are found to encroach on common goals through extension of the boundaries of their private holdings. Such activities are dictated by pure self-interest. With the increase of population, reduction in the size of common goods inevitably leads to problems of sanitation and creates health hazards. In most cases the educated and well-to-do persons who illegally annex areas of the commons do not themselves benefit from of this additional land during their life time. The motivation behind such illegal annexation is to bequeath a larger property to their progeny. Here they fail to understand that the welfare of the progeny would be served more by leaving room for better sanitation in the future than leaving additional land for them. One can find many similar examples of the short-sighted ways of functioning of the people. Most such people may be educated in the conventional sense. Personal alliance of individual customers with employees in organizations of public services like railways, telephone, public works, post office, etc., does not help in the general improvement of the quality of service. The customer establishing such personal alliance may have protection of his immediate service in view. But formation of a consumer's organization in such cases might help to simultaneously protect the immediate benefit and improve the quality in the future. Here the state should also provide status to the civil societies, like consumers forums, through framing appropriate laws. Educational reform through both formal instructions and informal publicity can bring long run interests into the cognitive world of the individual. Such change in consciousness that extends the time horizon of concern of a person might generate social interest out of the self-interest of the individuals.

The basic needs of public services including public provision of essential consumables to the poor can more efficiently be served by civil societies. The small social groups would, in such a case, on the one hand, be able to design the public good according to their specific needs and, on the other hand, closely monitor and regulate the performance in order to safeguard against "free rides" by any truant individual. For this purpose, civil societies of various forms should enjoy a reasonable degree of autonomy. A culture of "self rule" and sense of independence from political parties in the matter of the fulfillment of local needs will have to be developed.

Political parties should be concerned with the control and management of the affairs of the state. Various local needs should be regulated by different civil societies. Under such a system the generation and distribution of services for the fulfillment of basic needs of the people will be more efficient. Here the nature of pluralism will be multi-dimensional and every individual will enjoy greater freedom for exercising his rights of achievement. The political parties will derive legitimacy for their state programs from the harmony of their actions with free civil societies, rather than from dominance and control on of latter.

This will help to eliminate the maladies of overcentralization and allround dependence on the state that have developed in India over the last two and half centuries. The main program should be to encourage individuals to extend their time horizon of assessment of self-interest. Such extension of the time horizon may create scope for a transformation of motivation. The amorphous concept of the state in the theory of public finance will gain more concrete shape through such exercise.

NOTES

1. Amartya Sen, On Ethics and Economics (Oxford: Basil Blackwell, 1987), p. 8.

2. R.A. Musgrave, The Theory of Public Finance (New York: McGraw Hill Book Co., 1959), ch. 1.

3. James M. Buchanan, "Politics, Policy and Pigovian Margins", in A.J. Staaf and F.X. Tannian, eds. Externalities (New York: Dunellen, 1962). "The only behavioral model appropriate to the Pigovian analysis is that which has been called `the bifurcated man'. Man must be assumed to shift his psychological and moral gears when he moves from the realm of organized market activity to that of organized political activity and vice versa" (p. 184).

4. James M. Buchanan, The Demand and Supply of Public Goods (Chicago: Rand MacNally and Company, 1968). "In either small or large groups, it seems obvious that the recognition of the importance of decision-making costs, along with the expectation that similar choice situations will recur over time, may suggest the relative efficiency of institutions or rules of choice" (p. 155).

5. James M. Buchanan, op.cit, section on "A Probabilistic Approach to the Free Rider's Choice" in ch. 5.

6. "Civil society describes the associations in which we conduct our lives, and which owe their existence to our needs and initiatives, rather than to the state" (p. 237). Ralph Dabrendorf, "Economic Opportunity, Civil Society and Political Liberty," Development and Chance (1996), pp. 229-249.

7. John Keane, "Despotism and Democracy," in John Keane, ed., Civil Society and the State. New European Perspectives (London: Versa, 1988).

8. Dahrendorf, op.cit.

9. Rajni Kothari, Politics in India (Orient Longman, 1994), p. 31.

10. Rajni Kothari, op.cit., pp. 32-33.

11. Anupam Gupta, "State and Society in Indian Politics; Review of Crisis and Change in Contemporary India," The Visva-Bharati Quarterly, New Series, vol. 5, mos. 3 and 4, Nov. 1994, April 1995 (Santiniketan). Articles by Bhikhu Parekh, Anthony J. Parel, Judith M. Brown and Thomas Pantham in Upendra Baxi and Bhikkhu Parekh, eds., Crisis and Change in Contemporary India (New Delhi: Sage Publications, 1994).

12. For a good view of the development of national institutions under various compulsions of legitimation and balancing in Indian politics, see Rajni Kothari, op.cit. Partha Chatterjee, "Development Planning and the Indian State," in Partha Chatterjee, ed., State and Politics in India (Delhi: Oxford University, 1997).

13. Paul Seabright contends, "A genuinely pluralist theory must count it a social good that there may exist multiple views of the individual good that are not subsumable under an encompassing theory of the individual good." Does the very notion of an economic policy presuppose that the government has its own comprehensive theory of the individual good?" (p. 393).

For a discussion on the issues of pluralism and fulfillment of basic needs, see Paul Seabright, "Pluralism and the Standard of Living," in Martha C. Nussbaum and Amartya Sen, eds., The Quality of Life (Oxford: Clarendon Press, 1995).

14. Ashok Rudra, The Basic Needs Concert and Its Implementation in India Development Planning (Bangkok: ARTEP, 1978). "In the case of health, as in that of education, failure of the minimum needs targets being met arises less from any lack of financial, material or human resources than from an absence of the right kind of social ethos which is the result of not having been the right kind of social movements" (p. 46).

However, Rudra did not make any distinction between political movements and social movements, and to him social movements are motivated by an all-embracing political ideology. In this monograph, fulfillment of the basic needs of employment, primary education and health are taken as aspects of rights in the Indian Constitution. The matter actually is not so. These basic needs are incorporated in the Directive Principles of the Indian Constitution. An exercise on the role of civil societies in this realization of the goals laid down in the Directive Principles of the Indian Constitution would be useful.

15. Amartya Sen, "The Concept of Development," ch. 1 in H. Chenery and T.N. Srinivasan, eds., Handbook of Development Economics, vol. 1 (North Holland, 1991). Amartya Sea, On Ethics and Economics op.cit., pp. 56-57.

16. M.K. Gandhi, Hind. Swaraj or Indian Home Rule (Ahmedabad: Navajiban publishing House, 1933). Rabindranath Tagore (Thakur), Swadeshi samia. A collection of essays in Bengali, Visva-Bharati, Calcutta, Bengali year 1393 (1987 A.D.).

17. Amartya Sen, On Ethics and Economics, op.cit., pp. 2, 85. Amartya Sen, Inequality Reexamined (Oxford: Clarendon Press, 1992), ch. 4.