Friday, March 26, 2010

Theoretical Debates and Reality

We are all indeed always tempted to look at social reality through the theoretical baggage of hypothetical socio-political literature. Such a temptation generally revolves around pronouncements of world capitalism or socialism which also leads to new coinages like socialistic capitalism especially in the context of Government policies in the US & European Union using stimulus and bailout as economic policy tools to correct the economy.

There is indeed no comprehensive theory that explains what works in all cases and the advent of post-modernism exemplifies how theoretical models only aid in the understanding of disjointed social causality and cannot be generalized in the very strict positivist notion.

One of the greatest advantage of what we call capitalism today has historically been its adaptability and the absence of any rigid theoretical basis. What it relies on is maintenance of contracts that needs to be guaranteed by the legal infrastructure and the basic incentive for progress that is as natural as human instincts themselves. Marx would call this transfomismo or the inherent ability within capitalism to nullify revolution.

Ironically capitalism is again mostly blamed for inequality, the belief being that the rich gets richer at the cost of the poor. This is rooted in the belief that wealth is finite and if the rich takes all of it what could be left for the poor ? The truth cannot be any further from that belief. Failed economies and economies with gigantic informal markets statistically have recorded the greatest deviation in wealth creation possibilities between the rich and the poor, not because the rich benefits from capitalism at the expense of the poor but because missing markets or informal markets allow the rich to disproportionately accumulate wealth which are untaxed and unaccounted for in GDP estimates. Informal employment also indicates the absence of the requisite legal infrastructure and a massive governance failure.

Concentrating on the specific example of India, let us all ask the following questions ?

How and why is Agriculture untaxed-We never hear about the rich in the agricultural sector since formal estimates are impossible ?

Why do we not have formal credit systems in the agricultural heartland ?

Why are formal work contracts absent in the gigantic informal sector of our country ? --The informal labour market is the worst affected, heavily exploited with no access to housing, food or any of the basic living standard estimates of ILO.

The greatest advantage of capitalism is perhaps its informality and most importantly money by definition doesn't discriminate, discrimination- financial or otherwise is a problem of failed or informal markets, skewed political incentive structures and massive governance failures.

Some might still be more interested in debating Capitalism & Socialism but such is democracy. Isn't it ?

Thursday, March 25, 2010

The proposition of a Private-Public partnership model in Higher Educational service delivery.

Any commentary on educational policy essentially takes into consideration the various methodological debates that exist within the scope of the attempt to define education at elementary and advanced stages. It is essentially a wide ranging and interesting subject as the very tools and methods that go into researching a certain educational policy are in themselves real reflections of policies on education that have shaped the scope of logic.

Having thus acknowledged these various dimensions, and based on the need to restrict the scope of this article to the proposed changes to India’s Higher Education Policy I would speak about the higher educational policy in the context of an assumed service delivery model without questioning the underlying assumptions of such a model.

In order to fully understand the possible benefits of a Private-Public partnership (PPP) service delivery model in higher education let us explore what exactly is the rationale behind adopting PPP models and the various benefits that can accrue from it.

Initiatives of adopting a PPP model in most sectors seeks to fuse the skills, expertise, and experience from both the public and private sectors towards delivering higher standards of service delivery centered on the respective strategic advantages of both the parties in the initiative. The public sector essentially brings to the table its expertise in governance, responsibility to the electorate, access to funding (subject to other variables) appreciation of local cultural sensitiveness as well as a local workforce, many with long years of service delivery experience.

The contribution from the private sector includes operational efficiencies, innovative technologies, international and sometimes cross cultural managerial experience with access to additional finance and risk sharing. Risk sharing is one of the most important strategic advantages.

The definition of a private-public partnerships especially in the context of education is an important step because all stakeholders have very different perspectives on the problems and of the goals and aspirations of involving the private sector. Thus a consensus needs to be maintained within the following steps;

  1. The different sets of higher educational objectives are kept compatible or if possible aligned.
  2. The objectives of the higher education sector are agreed at the outset
  3. Unattainable objectives for this sector (education) are exposed and future steps are tailored to meet the objectives.

Concerns of private initiatives into educational service delivery have long been there and have been debated and the problems that accrue to the most important stakeholder in this context, that of the student in higher educational ventures of the private sector have been lack of accountability mechanisms.

This has been partially due to either lack of regulation or the presence of archaic regulatory bodies which are themselves mismanaged, and/or caught up in legal red tape-ism.

However, Government initiatives in higher education has not been without its own share of problems, mainly mismanagement, resource shortage and most importantly absence of industry linkages to the private sector.

In this context PPP models or a well regulated Private Sector model makes a lot of policy sense and is undoubtedly of tremendous significance for guaranteeing a certain quality of human resource for the society and the industry. However, attention needs to be on the all important regulatory model, which needs to be free from political processes as well as corporate interests.

This shall also mean that it would not just be the private educational initiatives that would be regulated but also the government sector- central or state government funded universities that should come under the purview of such a regulatory body which guarantees a uniform standard of educational service delivery across private and public sectors or any mutual alliance thereof.

The Comptroller & Auditor General of India in conversation regarding leakages in Welfare Spending.