Governance, institution building and economic prosperity - Part one

Governance, institution building and economic prosperity - Part one By W.A. Wijewardena Governance refers to how an individual relates himself to society’s ethical and moral code. Selfish Man has no respect for Society’s Governance Code  Individuals are, by nature, selfish creatures. Their genetic landscape, as argued by the evolutionary biologist Richard Dawkins in his The Selfish Gene, is both wired and made up for their own survival and protection. Hence, the prime objective of individuals is to work for self–interest and ensure survival, sustenance and well - being. When the moral and ethical code of a society is at variance with the individual self–seeking, there arises a conflict and that conflict gives rise to the need for a governance code. The reference that we often hear as ‘good governance’ or ‘bad governance’ is, in fact, made in relation to the divergence between these two objectives. What it means is that, if there is no difference between the moral and ethical code of the society and the uncontrolled self– seeking behaviour of individuals, then, there is no meaning in talking about good governance or bad governance. The Society of Robbers and Cheaters  This can be illustrated by considering a hypothetical case. Suppose that the society upholds robbery as its moral and ethical foundation. In this society, those who rob others are hailed and those who refuse to rob are jailed. What is the cherished principle of governance in this society? It is nothing but robbery and cheating at every human transaction. So, everyone is taught to rob and cheat others. The person who makes the biggest robbery (or equivalently, does the gravest cheating) is hailed by all as their super hero. Since non – robbers have no place in this society, it becomes necessary for everyone to become a robber or a cheater. Thus, robbers and cheaters will drive out all the good people and, eventually, the society will be made up exclusively of people of the former category. If one talks about ‘good governance’ in this society, that good governance is simply what people will do to rob or cheat. Sri Lanka’s Road Ethics are an example of a  Society of Robbers Sri Lanka’s road ethics provide a good example of a society of robbers. In the use of roads, everyone has an entitlement called the ‘right to use’ a given space of the road for reaching his planned destination. Economists call it ‘the assignment of property rights’ to road users. But, what can we observe on Sri Lankan roads? All those who use roads, whether they are pedestrians, push - cyclists, motor cyclists, three wheel riders or motorists, it does not matter, are inclined to rob the property rights of others freely and openly. How do they do it? Pedestrians cross the roads at all places except the zebra crossings forcing motorists to apply brakes abruptly. Drivers of all sorts of vehicles do zig zag driving without consideration for the motorist behind. In the night, drivers with powerful head lamps drive their vehicles with head lights on even in the well lighted city streets, thereby robbing the vision of the motorists coming from the opposite direction. Very often, the law enforcement officers who are expected to prevent such violations simply keep on watching such acts of robbery passively, as if robbery is the accepted norm of using roads. Those who do not rob the property rights of others cannot reach their destinations and, hence, they too have to violate the property right entitlements of others. If one meets with an accident due to the negligence of another, the innocent party is penalised (jailed in our society of robbers) by requiring him to bear the cost of the accident out of his insurance entitlement and thereby forgo his no – claim bonus. The perpetrator of the accident thus goes scotch – free.  The Essential Features of an Ethical and Moral Code For us to talk about good governance in a given society, its ethical and moral code should necessarily uphold and honour the following: the recognition of the rights of others; fair play in dealings; freedom of thought and expression; toleration of opposing views; peaceful resolution of conflicts and disputes and open and free debates over unsorted issues with a view to finding a lasting and amicable settlement. Governance is thus a way of life of a large segment of the members of a society. It is a self – discipline and an ethical and moral code which people have in – built in themselves. It is also a peaceful and amicable way to resolve the conflict between private self – interests and society’s common interests without injuring the psyche and the intellectual build – up of individuals. When followed by everybody in terms of its spirit and not as a mere lip serving, it contributes to the mutual benefit of all those in a society. Kautilya’s Prescriptions for an Ideal King A code of governance is specifically relevant to those who have enormous discretionary powers, whether they are in the state sector or in the private sector, over the affairs and the lives of others. That is because any unfair treatment by such powers will cause an irremediable injury to their victims. To prevent such powers from using their discretions haphazardly and unjustly, they should necessarily have an in – built code of moral conduct to observe at all times. Kautilya, in The Arthashastra, observed that ‘an ideal king is the one who has the highest qualities of leadership, intellect, energy and personal attributes. As regards, personal attributes, an ideal king should be eloquent, bold and endowed with a sharp intellect, a strong memory and a keen mind. He should be amenable to guidance and be just in rewarding and punishing. He should preserve dignity at all times and not laugh in an undignified manner. He should be sweet in speech, look straight at people and avoid frowning. He should eschew passion, anger, greed, obstinacy, fickleness and backbiting. He should conduct himself in accordance with the advice of the elders’. So, the weaker is protected only if the powerful follow a well defined moral and ethical code of governance. Inflict fear in others and harvest hatred in return What Kautilya has highlighted as the self – discipline which those with powers should have cultivated when conducting towards the weak has been amplified a century ago by Sage Dandamis in an answer to a question posed to him by Emperor Alexander the Great. As reported by historian Plutarch, Alexander, having been impressed by the way Sage Dandamis resolved many difficult riddles thrown at him, is reported to have asked a final question from Dandamis. ‘How can one make oneself loved and respected?’ Alexander had asked. Dandamis’ answer had been straight and to the point: ‘If you have enormous powers, but, if you still do not instil fear in others, you are loved and respected’. This answer is said to have opened the eyes of the Great Warrior. ‘What have I attained through my ruthless and brutal military expeditions?’ He is said to have questioned himself. By inflicting fear in others, he is now the most hated person on the earth, not only by the people whom he had subjugated, but also by his own army. This answer had caused Alexander to end his military campaign and turn back. Buddha’s Prescription of Treatment of Others  It is, therefore, important for people with power to design a way how they should conduct toward the others. Two centuries before Kautilya, the Buddha had the prescription. ‘If you do not wish to be treated in a certain way, do not treat the others in the same way’ the Buddha had preached. We do not wish to be unfairly treated, robbed, harmed or abused, denied of opportunities and deprived of our freedom. If we do not like them, then, our governance code should be such that we do not inflict the same on others. The adherence to such a code calls upon us to develop an innate culture in us by inculcating self – discipline, making a self – inquiry, exercising self – restraint and attaining self – realisation. Noble Eight – fold Path:  A Code of Governance The Buddha’s way to develop such an innate culture is through the Noble Eight–fold Path. It requires the adherent to have right view on the matters in the real world, form right conception of real world phenomena, engage in right speech, make right efforts, earn living through right livelihood, practise right behaviour, have right mindfulness and be in right concentration. It is important to follow the spirit of Noble Eight – fold Path, and not merely its letter, in order to cultivate the required innate discipline in oneself. Governance in the Real World However, the real world experience is that not everyone in the society could develop the innate culture in its true form. In such cases, the majority, openly flouting the governance principles, may reduce them to just words written in texts and not cherished dictums that are being followed. It, then, leads to the proliferation of a society of robbers with all its unfavourable consequences which we have noted earlier.  In such a society of robbers, everyone simply pays lip service to governance principles but, in reality, behaves in manners contrary to the ethical and moral code of the society.  To prevent the society from becoming a society of robbers, it is necessary to introduce governance principles as requirements from outside and promote institutions, both government and voluntary, to oversee that such principles are being adhered to. The importance of institution building  Institutions act as a deterrent to the pursuit of uncontrolled self – interest goals by individuals, help maintain law and order and observe the rule of law, ensure righteousness and transparency in public dealings, protect the rights of people to hold property, uphold freedom of thought and expression, impose effective checks and balances over the exercise of powers, penalise the violators and abusers of governance code and prevent the incidence of bribery and corrupt practices.  While the social institutions should name and shame the perpetrators, the legal bodies should pass penalties on them. The evils of bribery and corruption Bribery and corruption has been considered a social evil, though in strict economic terms, they help an economy to function smoothly by oiling the unmoving cog wheels of discretionary decision making processes. Yet, an economy - wide proliferation of bribery and corruption will become an economic evil too, when everyone in the society tries to make easy money through such practices (in economists’ parlance, rent – seeking), leaving hard and honest work which is the prime and sustainable source of wealth creation. At individual level, a person may rob from another person and make a living. But, at national level, a nation cannot rob from itself and become prosperous. Hence, all societies have been concerned about the ill effects of bribery and corruption and taken action to put a stop to them so as to promote sustainable economic prosperity.  Kautilya in The Arthashastra has advised the king to limit the opportunities for state officials and ministers to engage in bribery and corruption, while prescribing the severest punishments to miscreants. He has observed that it is a natural temptation of people to misuse or rob the moneys placed in their disposal by others. He said, ‘it is impossible not to taste honey or poison at the tip of one’s tongue and so it is impossible for one dealing with public funds not to taste a little bit’. The predicament of the king in this case is his inability to apprehend the miscreants. So, Kautilya said that ‘it is impossible to know when a fish moving in water is drinking it and, so, it is impossible to find out when public servants misappropriate money’. A small government to check bribery and corruption  The solution is, therefore, to place only the minimum quantity of honey on the tip of those who have to deal with public finds. That again should be done only in unavoidable cases. To do so, one should have the smallest government possible. This is because the proliferation of much hated bribery and corruption directly relates to the presence of a big government. In the next article, we will discuss how governance and institution building lead to economic prosperity. (W.A. Wijewardena can be reached on waw1949@gmail.com)