BWorld 112, Asia Liberty Forum 2017 in Mumbai

* This is my article in BusinessWorld last February 15, 2017.

Mumbai, India -- The title of this piece is from JP Narayan of the Lok Satta Party in India, who made that comment during the Asia Liberty Forum (ALF) that was held from Feb. 10 to 11, 2017 in Mumbai.

That remark seems to apply in many countries where the rule of law is weaker and the rule of men -- especially those in charge of several forms of regulations -- are stronger. These are the types of people who also impose restrictions and prohibitions on their political enemies and ordinary folk but exempt themselves, their friends, supporters, and families.

Below are other insightful quotes and comments from other speakers during the ALF. The conference was jointly sponsored by the Center for Civil Society (India), Atlas Network, John Templeton Foundation, Smith Family Foundation (USA), and the Friedrich Naumann Foundation for Freedom (Germany).

1. “The word ‘Freedom’ has been lost because we mean ‘freedom from’ while an enormous number of people mean ‘freedom to.’” -- Linda Whetstone, Network for a Free Society (UK).

That quote is correct and the confusion may be rooted from the common definition of freedom as “freedom from coercion” (by the State or government, clan, church, gang, etc.) and is similar to Friedrich Hayek’s definition of liberty as “absence of coercion.” Linda also added that “Trade and exchange is not a zero sum game... both sides can be better off.”

2. “Inequality is not the issue; what bothers people is the ‘psychological threat to my perceived status.’” -- Tom Palmer, Atlas Network.

Again, I agree.

Take note that free people are not equal and equal people are not free. Freedom allows people to be super-efficient or be super-mediocre or absolutely irresponsible in their own lives. This personal decision automatically results in material inequality among people. The only equality that matters is equality before the law, or the equal application of the law on unequal people. Thus, the law against robbery should apply to all, from the President to the richest people to middle class, down to the poorest people.

3. “What we have in India is a PPP -- Perpetually Planned Poverty” -- Rajesh Jain, Free a Billion (FAB).

This is a funny but brutal parody and satire of an otherwise famous catchword in the Philippines and other countries of PPP (Public-Private Partnership) for big infrastructure projects. Rajesh was referring to various laws and restrictions by the government of India that he also called as “like air, it is all around you in India.”

4. “Top communist individuals in this country come from the upper class of society... Capitalism and Caste cannot coexist.” -- Chandra Bhan Prasad, a public intellectual and commentator, India.

He is referring to the various privileges and perks that cronies and state-protected corporate interests enjoy but are withheld from the rest of society. This is true because competitive capitalism is driven only by endless innovation and is anathema to state protectionism.

5. “Demonetization is the biggest assault on property rights in India... Nehru nationalized industries, Indira nationalized banks, and Narendra Modi nationalized private cash holdings.” -- Barun Mitra, Liberty Institute, India.

In November 2016, the Modi government pursued demonetization, a policy to remove all 500 and 1,000 (about $15) rupees from circulation to supposedly curtail the huge black market economy and counterfeit currency that funds illegal activities. These are exactly the currencies that hundreds of millions of poor Indians hold because of their low income and government has disallowed use of these. Very autocratic indeed.

6. “Globalization of capital is the most liberating force particularly for the poor.” -- Christopher Lingle, Universidad Francisco Marroquin, Guatemala

Contrary to common belief that globalization only favored big capitalists and businesses, globalization has benefitted the poor more in the form of (a) being employed locally by foreign investors that were otherwise prevented from coming in, (b) being employed abroad as they were assigned by their multinational firms or being hired by competing foreign firms, (c) being stockholders through time of both local or foreign firms as enterprise competition intensifies.

7. “Regulatory focus is to tap down on innovation because nobody understands something new. Lack of rule of law leads to adverse selection. Legitimate firms exit, leaving only bad actors.” -- Susan Thomas, Indira Gandhi Institute for Development Research, India.

This is true. The implicit or explicit purpose of regulation is to limit and restrict innovation that can lead to business disruption and more income inequality. Some regulations simply kill innovation and we do not see or realize it because it was not initiated in the first place. Lack of rule of law means high rule of men; only friends and cronies of rulers will prosper while the non-cronies will remain small or exit the market.

8. “There is a messianic belief among regulators that if there is any money made in India it must be taxed. Also underlying core belief among regulators that India is the fastest growing economy so the world owes us investments.” -- Sudeepto Deb, Minerva Consulting, India.

This attitude by regulators of tax-tax-tax whenever there is perceived new income seems to apply in many other countries too. Former US President Ronald Reagan has a good summary of this when he said: “If it moves, tax it; if it keeps moving, regulate it; if it stops moving, subsidize it.”

9. “There are only two political philosophies: liberty and power.” -- Simon Lee, cofounder of Lion Rock Institute, Hong Kong.

Ultimately, yes. It is a battle between state-worshippers and regulators and the public or regulated parties who want more economic freedom. There are in-betweens of course, like people who move from the regulated to becoming regulators and vice versa.

There were many other useful comments and ideas during the conference but there is not enough space for this column. I am simply thankful to the Economic Freedom Network (EFN) Asia for giving me the travel grant to attend the event.

Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers and a Fellow of SEANET. Both institutes are members of EFN Asia.

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See also:

BWorld 109, Asians' march to liberty and progress, February 16, 2017 

BWorld 110, Should we go federal or not? February 19, 2017 

BWorld 111, Electric cooperatives and unstable power supply, March 01, 2017

ALF 9, Conference 2017 in Mumbai, India

The Asia Liberty Forum (ALF) is an annual 2-days conference jointly sponsored by the Atlas Network (US), Center for Civil Society (CCS, India) and the Friedrich Naumann Foundation for Freedom (FNF, Germany). Five ALF events so far from 2013-2017 and I have attended the last 3 -- 2015 in Kathmandu, Nepal; 2016 in Kuala Lumpur, Malaysia; and 2017 in Mumbai, India.

Some photos of the ALF 2017 last week, February 10-11 held at The Leela Mumbai Hotel. Below, Baishali Bomjan, a superwoman at the CCS, formally opening the conference on Day 1.

 

Speed networking, a traditional Atlas conference activity where participants introduce to each other one on one for 2 minutes, then move to the next person in front. Notice the background, "Freedom" translated in various Asian languages.

About 250 people registered, some they come and go. About 200 max at any one time.

Among the tweets on Day 1 under the hashtag #AsiaLF17:

"Trade and exchange is not a zero sum game ... both sides can be better off"…

"When you have free markets & property rights, you open up lot of opportunities" - Linda Whetstone

"After the collapse of the Soviet Union, we were intoxicated, thinking that our ideas had won...

I am a free market fundamentalist, I am also a democratic fundamentalist....

Populist trends did not happen on their own, they have been rising over the last ten years.... 

There is a huge political convergence that has taken placeThe traditional left and right agree on one point- use the state." -- Barun Mitra

Why #property rights matter for #India's poor: Give them rights and they turn rocks into a garden. -- #liberal activist Ambrish Mehta

One more #liberal bonmot: "Government is like air, it is all around you in #India." -- Rajesh Jain @freeabillion 

"Technology equalises power of communication and lowers role of money ... there would be no Tea Party without Facebook... "Every human being is fundamentaly a #liberal at heart. #Freedom is built into our DNA." -- Matt Kibbe @mkibbe

"why do we still turn our backs to private schools despite data that these schools are preferred choice for many?" -- Brajesh Mehra

Our panel on Deregulation, 4pm of Day 1.

From left: Vivek, Syed Mizanur, Seetha, Alex, me.

"Incentives for politicians have to be changed; data doesn't support reelection for good eco stewardship" --  Vivek Dehejia

"Standardised containers did more to reduce trade costs than lowering trade tariffs…  Exits are important for Liberty because it disciplines firms." Alex Tabarrok

My 19-slides presentation, Electricity deregulation and re-regulations in Asia, Philippines in particular.

My article in BusinessWorld last February 15 about the ALF17, The public sector is the private sector of those in public offices. It is reposted at the EFN Asia website.

A good keynote speech during the farewell dinner, Day 2 of ALF given by Amit Varma, The landscape of freedom in India.

Thanks to Simon Lee for this photo, with Parth Shah, President of CCS. I met Parth for the 1st time in April 2004 during the Mackinac Leadership Conference in Michigan conducted by Lawrence Reed, Joe Lehman, other great Mackinac guys. Andrew Work, Ellen Sandig Cain, Manali Shah were also our batchmates in that great conference. Andrew is represented in this photo by Simon who was 1 of 3 co-founders of the The Lion Rock Institute in HK.

Below: standing are me and Barun Mitra. Seated are Mohit Satyanand and Julian Morris. In June 2005, the International Policy Network (IPN, UK) organized the Global Development Forum in London, a conference in support of more free trade, less aid. It was held 2 weeks before the G8 summit in Scotland where the main agenda was more foreign aid (or simply more govt to govt aid) to "make poverty history". IPN Exec Dir then was Julian, I and Mohit Satyanand were 2 of about 6 speakers.

Flashback 2014, EFN Asia Conference in HK. Parth, Andrew and me, batchmates in Mackinac Conference 2004. Barun joined us.

I am very thankful to EFN Asia for providing me the travel grant to attend ALF 2016 (KL) and ALF 2017. Thank you Pett, Siggi. My attendance of ALF 2015 (Kathmandu) was courtesy of Media 9/Business 360, thank you Charu; and partly by Samriddhi, thank you Robin.
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See also:

ALF 6, Panel discussion on property rights, February 23, 2016 

ALF 7, Panel on TPP, RCEP and other RTAs, March 18, 2016

ALF 8, Toast to Douglas North, March 19, 2016

IPR and Innovation 27, India strengthening its IP protection

There are a number of positive news in India recently regarding strengthening its intellectual property right (IPR) protection. Among the most recent was the article at The Hill by Mark Elliot, the EVP of the U.S. Chamber of Commerce’s Global Intellectual Property Center (GIPC). He wrote,

The ultimate goal – both for India and for all nations striving to foster economic growth and global competitiveness – is to put in place policies which lay the groundwork for the creation of a true knowledge-based economy.  For that to happen, the government must create guidelines which provide greater legal certainty for private sector investors, create a viable technology transfer mechanism, and foster greater enforcement of legislation aimed at protecting IP-intensive industries in India. Each of these factors, in turn, will support the creation of a robust innovation ecosystem, one from which India surely has the most to gain.

Then a report from NDTV, India to protect intellectual property rights, PM Modi  tells media heads,

"This is a technology driven era. We are a technology driven society... We are committed to protecting IPR which is essential to fostering creativity," PM Modi said. In May, the US had kept India and China on its Priority Watch List of trading partners that fail to protect intellectual property rights of its enterprises that invest in India, hurting the economy.

And this news from The Hindu,

Thanks to those pieces of good news. It is not possible to have more revolutionary and costly innovations in many sectors and sub-sectors of an economy if the inventors and innovators cannot internalize the rewards of success and the losses of failures, simply because a horde of copy-catters are just milling around to say later on, "we also invented that" and do good business even if they contributed nothing to the discovery of new molecules, industrial and circuit designs, new songs and books, and so on.

Meanwhile, Pugatch-Consilium released its new report, the Biopharmaceutical Competitiveness and Investment (BCI) Survey 2015. From the few selected countries covered by the report, here is the summary of BCI scores and ranking. India ranked 11th out of the 15 countries surveyed.

For India in particular, a score below 60 means that it is non-competitive in biopharmaceutical research, clinical trials and investments.

The US Chambers' GIPC also released the supplementary statistical charts and analysis, Unlimited Potential, also prepared by Pugatch-Consilium. Below, the report plotted the data of the GIPC Index Score and the Global Innovation Index 2014.

While Singapore, S. Korea and Japan scored high, India and Indonesia scored low, though not as low as Nigeria's.

Also a plot of GIPC index score and Online creativity score, and India and Indonesia scored low, though not as low as Nigeria's.

Hence, the recent pronouncements by PM Modi. He needs to counter the low or negative image of India when it comes to respecting and protecting the various products of the mind and intellectual entrepreneurship.

The main role of government in this case is to lay down rules that are fair and transparent to all players, to protect private property whether they are physical or non-physical/intellectual.
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See also:
IPR and Innovation 23, Letter to WIPO by 85 think tank leaders from 51 countries,July 21, 2015 

IPR and Innovation 24, The US-China IP cooperation dialogue, August 18, 2015 

IPR and Innovation 25, Malaysia's IP Monetization strategy, September 13, 2015 
IPR and Innovation 26, Countries with most patent applications, most innovative universities, September 19, 2015

Drug Price Control 42: New Round of India Price Caps

 Another round of drug price control in India.

Lessons for the Philippines?

Discussion below, after the news report.

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India caps prices of 36 more drugs to improve access - government official

BY ADITYA KALRA AND ZEBA SIDDIQUI

NEW DELHI/MUMBAI Fri Sep 19, 2014 7:34pm IST

(Reuters) - India has capped the prices of 36 drugs, including those used to treat infections and diabetes, in its latest move to make essential medicines more affordable, a senior official of the country's drug pricing authority told Reuters on Friday.

The medicines join a list of 348 drugs deemed essential and that are therefore subject to price caps, covering up to 30 percent of the total medication sold in a country where less than 20 percent of people are covered by health insurance.

"This is a straight-forward, most predictable, overdue action which has been done by us," the official at the National Pharmaceutical Pricing Authority (NPPA) said, declining to be named because of the sensitivity of the matter.

Global and Indian drugmakers have been hit in India by wide-ranging government-imposed price reductions over the last year. Industry officials say prices in the country are already among the lowest in the world, but the cost of drugs is overwhelmingly covered by patients themselves.

India in July capped the prices of more than 100 drugs that are not part of the essential medicines list. The pharmaceutical industry has challenged the move in court.

Indian drugmakers, including Cipla Ltd, Ranbaxy Laboratories Ltd, and Cadila Healthcare Ltd, are among the companies that will be affected by the latest decision, research firm AIOCD Pharmasofttech AWACS said….

MORE TO COME

More big selling drugs for treatment of diseases including cancer, HIV/AIDS and cardiovascular could be brought under price cap to make them affordable in the country, said Rahul Sharma, an analyst with Mumbai-based brokerage Karvy Stock Broking.

The senior official at the pricing authority said the NPPA was drawing up a list of mass-consumed, essential life-saving drugs which it thinks should be added to the essential medicines list, but did not confirm treatments affected….

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What are some lesson for the Philippines from this report?

These are my impressions and observations:

1. Government intervention like price control, once started, is never or hardly reversed and recalled. It only invites more intervention. In this case in India: original 348 drugs in the essential medicines list + more than 100 drugs outside of the essential medicines list last July + 36 drugs this month + “more to come”.

Thus, people should not be enamored or hoodwinked with more government interventions  like price control and their beautiful, bleeding heart promises and justifications. Once started, they acquire their own life and create their own momentum. And such interventions will soon victimize those who asked for it in the first place, either directly or indirectly, like the proverbial "Law of unintended consequences."

2. India’s NPPA could be the “model” of former Cong. Ferjenel Biron, Sen. Manny Villar and other legislators in the last Congress when they were adamantly pushing for the creation of a permanent bureaucracy to be called Drug Price Regulation Board (DPRB). One consolation of PH drug price control experience is that we do not have a permanent bureaucracy with permanent and full time bureaucrats whose main purpose in this planet is to justify endlessly, and expand endlessly, the list of medicines to be put under price dictatorship.

A permanent price control board is very dangerous. The most extortionists, the most corrupt in  government will salivate to head it and use it for harassment and extortion of some players. Like threatening "pay us or we will put your most saleable, most popular drugs under price control". It is happening in India. The NPPA officials have gone outside the essential medicines list.

The DOH Advisory Council on the Implementation of RA 9502 (previously called the Advisory Council for Drug Price Regulation) is a non-permanent agency, just an ad-hoc body that does not even meet regularly.

3. While the original target of price control were the products of west-based innovator multinationals (US, Canada, Europe), continued expansion of price control is now victimizing local companies, generic multinationals:  Ranbaxy Laboratories (5th largest specialty generic pharma in the world),  Cadila Healthcare (5th largest pharma company in India), Cipla  Ltd. (42nd largest publicly traded company by market value in India). Data I got from wiki.

Ranbaxy (or Dr. Reddy’s?) is the India version of Unilab, they are both the biggest pharma in their respective countries.

This is one reason why we do not see or hear any local generic pharma in the Philippines supporting drug price control, in 2009 or now.

A physician friend from PhilHealth, the government-owned social health insurance (SHI) corporation, asked me,

What if the social health insurance provides the cap?One, the cap is meant to protect those that are insured.Two, the covered population provides predictable demandThree, it opens a group of consumers who previously are not buying.. Example,  the poor.. Or not compliant with their medication.. Example, those who have NCDs .What if those who are selling pharma products covered by SHI receives rebate?

Good questions. If the SHI like PhilHealth will provide a price cap to certain medicines that patients will pay, and the selling pharma companies receive a rebate from the SHI, then I think it  is fine. It is not a price control but a price subsidy. It is no different from a rice subsidy (NFA pays high to rice producers and consumers pay low) or MRT/LRT train subsidy (DOTC pays huge money to MRT operators and passengers pay low).

If government should impose a mandatory, forcible price cut (ie, price control), then government should pay the firms that are affected -- through DOH budget or DOF-BIR tax rebate. Government must share burden for some of its bleeding heart programs.

In the current practice of price control, neither the DOH nor the DOF share any burden. And not only for the 19 or so molecules covered by price control of August 2009, but also for the mandatory, forcible price discount of 32 percent (20% forced discount + 12% VAT waiver) for senior citizens and persons with disabilities (PWDs). Not all senior citizens and PWDs are poor that they deserve a forced discount. And not all drugstores, restaurants, bus lines, etc. are rich to shoulder the forced revenue cut. Henry Sy, Gokongwei, Lucio Tan, George Ty, Manny Villar, Sonny Belmonte, Franklin Drilon, FV Ramos, ettc. are no poor yet in the law, they deserve a forced discount and private enterprises are forced to  give them a 32 percent discount. This is a continuing headache for many players in the health sector -- pharma (local and multinational), drugstores, hospitals. Nagtuturuan who should shoulder the biggest burden and the burden inventor, the government, has zero share in the burden sharing.

Some people may ask, "You have criticized a lot of policies, what do you propose?"

Simple. Government should step back, zero  involvement, in pricing by private enterprises. Government should encourage more players and competitors to come in. Competition will drive prices, not only of medicines and vaccines but also lab tests, hospital fees, professional fees. Unless patients will deliberately go to expensive hospitals and physicians, expensive drugstores and  choose expensive  medicines. 

When someone sells fake or counterfeit medicines, anesthesia, vaccines, etc.  and public health is affected, government should come in. Hard and harsh. Why? Because there is clear violation of contract, that sellers and producers should only supply good quality meds, food. It is in the promulgation of the rule of law that I believe in  BIG government. Government should over-spy, over-bureaucratize, over-penalize, criminals,, thieves and  murderers, sellers of fake medicines and adulterated food, etc.

Government should also reduce if not abolish, various taxes and fees on medicines and  vaccines. In many instances, government is a major contributor to  expensive medicines, expensive rice, expensive electricity and so on, via various taxes, charges, fees and royalties on those products and services. Yet government portrays itself as the "champion of the masses" and indirectly demonize the major players via more regulations and prohibitions, like price control policies.

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See also: 

Drug Price Control 38: Presentation at USC, Cebu, March 2010, March 01, 2014 

Drug Price Control 39: Presentation at USC, Cebu, March 2014, March 25, 2014

Drug Price Control 40: CWF Wants Price Dictatorship for Lipitor, September 12, 2014

Drug Price Control 41: Exchanges with Joey Ochave at MeTA PH, September 17, 2014

Agri Econ 11: Protecting Land Properties by the Poor in India

Another good article from my friend Barun Mitra (2nd from right in photo) of Liberty Institute in India, co-authored with his wife Madhumita Mitra, posted before the on-going India general elections started early this month.

I particularly like their point on 

"Abolish land ceiling laws, particularly in agriculture to facilitate consolidation such fragmented land into viable farm units."

That is similar to the campaign to end the no-time table agrarian reform (AR) program and forced redistribution of agri land here in the Philippines. AR was started in 1972 by the Marcos government, then a new law on AR in 1988 during Pres. Cory Aquino’s time with 10-years time table. The 1998 deadline came, and AR was extended to 2008. And further extended to June 2014. Now there are moves to further extend it for many years more.

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Recognising Right to Property: An agenda for reforming land related laws and policies

India’s land management regime has for decades been mired in obsolete laws and misguided policies that distort markets, enable corruption, and deny fundamental property rights. Current land policies are a mix of outdated laws and even more obsolete ways of thinking, many of which are rooted in colonial India.

The paradox is best illustrated by the fact that many landowners, including farmers, would like to move out of agriculture, but cannot find remunerative price for their land assets, while industrialists and investors who would like to buy land cannot find access to land at a reasonable price. Tens of billions of dollars of investment, in public and private projects have been stalled due to land related conflicts. This land alienation is also contributing to a section of society sympathising with leftwing insurgency in some parts of India.

Land is the only asset that most Indians, even the poorest, possess to at least some degree, but technicalities often prevent them from claiming legal ownership over what they possess. A functioning land market founded on strong property rights would expand the opportunities for economic advancement for those who possess land, empowering them as citizens in a democratic India. Such a market would also allow those with wealth to access and invest in property and engage with land owners in mutually-beneficial transactions, rather than trying to use their waning political influence to access land.

The 16th General Elections to the Indian Parliament, the House of the People, (Lok Sabha), is being held thro’ April-May 2014. A new government will take office by the end of May. Reforming land management will be a key factor shaping the political and economic trajectory of the country. In that context, we suggest the following agenda items, which may be considered by the incoming government, and the country at large, in the coming months and years.

§  Clearly articulate the need to create a functioning land market which will significantly reduce the need to invoke eminent domain.

§  Partner with private, community and public-sector stakeholders to build a modern land recordkeeping infrastructure based on GIS and other imaging technologies.

§  Abolish land ceiling laws, particularly in agriculture to facilitate consolidation such fragmented land into viable farm units.

§  Eliminate capital gains tax. In a poor country, taxing capital is self-defeating.

§  Drastically reduce or eliminate fees and taxes that impede land transactions and increase the potential for corruption, replacing them with a nominal fee to cover only the administrative costs of keeping up-to-date land records.

§  Transfer authority over land-related regulation such as zoning, land use and environmental concerns, to local governments and councils.

§  The scope of eminent domain needs to be severely restricted to truly public purposes, and with the consent of those affected, not to facilitate private investment and business projects.

§  Recognise the land owners rights over forest and other environmental resources, including minerals, whether above or below the ground.

§  A new mines and mineral law, which recognises the rights of land owners and communities, and allow them to directly negotiate access and royalty with investors, is much awaited.

§  A land titling law to grant conclusive title guarantee to land owners is imperative. Property transfers must legally validate transfer of titles rather than merely enabling registration of the deed.

§  Restoration of Right to Property as a fundamental right in the Constitution.

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See also:

Agri Econ 7: Bt Eggplants vs Environmentalism, December 20, 2010 

Agri Econ 8: On Rice Price Stabilization, January 16, 2013 
Agri Econ 9: On Agrarian Reform and Agri Credit, April 29, 2013 
Agri Econ 10: On Rice Price Spikes, September 29, 2013

Election 9: India's Political Dynasties vs. Democracy

India is the world's biggest democracy. People directly vote their representatives and local executives. And they are doing it now, in India's general elections 2014, happening in various phases from April 07 to May 12, 2014.

I like this article by a good friend, Barun Mitra, founder and Director of Liberty Institute (LI) in Delhi. Originally posted in LI website last April 09, and reposted in EFN Asia website last April 11. For brevity purposes, I removed certain details from the original article so that readers here can focus on Barun's general argument,

dynasties may exist in politics but democracy has the power to equalise the dynasts. The diminishing power of the political families in India bear testimony to (this). Democracies have little to fear from political dynasties. As long as the elections are free and fair, it is the dynasts who need to fear political marginalisation or oblivion once the voters give their verdict.

Check the two links above to read the article in full. The photos I got from the web and not part of Barun's original article. Enjoy reading.

Diminishing electoral dividend for the political dynasties

Barun Mitra

Any discussion on dynastic politics in drawing rooms or in the media, usually degenerates in to a slanging match. One side tries to wrap itself in a democratic halo, and who see political dynasties as anathema in democratic polity. The other side aggressively argues that after all the dynasts do have to get democratically elected too and therefore legitimate.

Hardly any political party is immune from their own dynasties, small or big. The list of candidates related to political families in the 2014 election is a long one indeed.

But how do political dynasties stand out in terms of political performance? Do successive generations measure up to their famous ancestors? Why do some families make their mark on the political landscape, while others fail? Is there legitimate space in a democracy for favoured families? Are political dynasties an aberration in a democracy where at least at the time of the ballot, every citizen is truly seen as equal? Or does the focus on political dynasties diverts our attention from the truly equalising impact of a democracy?

The Nehru-Gandhi family is of course seen as the standard bearer of political dynasties in the democratic world. Since Independence in 1947, three members of the family has been elected as India's prime ministers, another son became notorious for wielding enormous extra constitutional power, without actually holding any elected office. A daughter in law came quite close to the ultimate political position, but political necessity ensured that she renounce office. And a son who seemed reluctant to join the race, and can't figure out either to get off the track, or take the plunge whole-heartedly.

This is the beaten track, travelled many times in the past. However, what seems to have been almost completely missed by the critics and supporters of political dynasties is that like in all other fields of life, there is a consistent diminishing returns for the dynasties in politics.

Motilal Nehru was the patriarch, and twice president of the Indian National Congress, during the British colonial rule. But it was his son Jawaharlal Nehru, a protégé of the original Gandhi, the Mohandas K Gandhi, who became India's first prime minister.

Nehru won three successive general elections and was in office from 1947 to 1964. Indira Gandhi, Nehru's daughter was selected for the post by a powerful section of the party bosses to be India's Prime Minister, following the untimely death of Lal Bahadur Shastri, in 1966. Indira was in office through the tumultuous days of the emergency rule, till 1977,when she became the first of the many prime ministers since to lose a general election. Although she led her party to another victory in 1980, and had yet another turbulent term in office, she was assassinated in 1984 by her own bodyguards.  Mrs Gandhi held the high office for about 15 years.

Rajiv Gandhi took office within a few days of his mother's tragic death in 1984, swept the elections a couple of months later, and won an unprecedented 3/4ths majority in Parliament. He came in with great hope, but in the later half of his term his government got embroiled in corruption scandals and political crisis, and lost the general election in 1989. Since then the Congress party has never been able to win a majority of seats in any general election. And no one from the Nehru-Gandhi family has been the prime minister in the past 25 years.

No one can say with certainty whether another one from the fabled family will become India's elected prime minister in the foreseeable future. This dynasty has clearly seen better days. Democracy has been a great leveller.

Not surprisingly, the other political families in India have not done any better. In fact, one would be hard pressed to find a political family whose star is on the ascendant.

Charan Singh, once a very powerful chief minister of Uttar Pradesh, went on to hold the prime minister's post for only a few months, and became the first PM who never faced the Lok Sabha….

In Maharashtra, the Shiv Sena had been led for decades by the fire brand Balasaheb Thackrey….

In the small but prosperous state of Punjab, one family, the Badals, has survived the past 3 decades. Following the decade long separatist violence in the state in the 1980s, the society started picking up the threads again in the early 1990s….

In the Himalayan state of Jammu & Kashmir, the family of Sheikh Abdullah has been the preeminent political family since the 1950s….

There are many lesser families, which have survived but experienced diminishing political status…There are countless other examples of offsprings trying to wear the mantle of their ancestors, and failing.

So far, the only exception to this diminishing political trajectory traversed by the dynasties, has perhaps been the Patnaik family in Orissa….

Political dynasties may get a head start, but ultimately they have to perform to meet voters' expectations, or perish.

While every political party has its own dynasties, preeminent or localised, equally every party has tried to leverage a split in the dynasties to undermine the family brand. The most famous schism is in the Nehru-Gandhi family, where the widow and son of Sanjay Gandhi, are today prominent members of the BJP…

There are many members of parliament who come from political families. But equally there are many others who try to enter politics on the back of their family connections, but fail to make a mark electorally. The numbers in the latter category would be far larger than the former category. Unfortunately, there is no register of documenting familial ties among those in politics.

But one thing is clear, dynasties may exist in politics, but democracy has the power to equalise the dynasts. The diminishing power of the political families in India bear testimony to the deep roots democracy has struck in the country.

Democracies have little to fear from political dynasties. As long as the elections are free and fair, it is the dynasts who need to fear political marginalisation or oblivion once the voters give their verdict.

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Other articles by Barun Mitra in this blog: 
Energy Econ 3: Market Reforms in India's Electricity Sector, July 30, 2012 
Lion Rock 11: Barun Mitra on Democracy, Reading Salon 2013, October 28, 2013 
EFN Asia 34: Rainer Adam and Economic Freedom in Asia, March 11, 2014

See also:

Election Watch 6: On Political Dynasty, May 11, 2013 
Election 7: My Candidates for Senators, May 12, 2013 

Election 8: Growth, Debt and the 2013 Polls, May 30, 2013  

EFN Asia 22: Dealing with Economic Nationalism, Jeju Forum, June 03, 2013 

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Drug Price Control 25: Top 10 Articles on Google Search

The existing drug price control policy (also known for their illegal terms as MDRP + GMAP) in the Philippines will turn three years old in four months. I checked today google search engine and typed "drug price control" and I was surprised of the result.

The top five papers there were all mine :-). Three from this blog:

1) Drug Price Control 24: Forcing Drug Firms to Report Payment to Doctors

2) Drug Price Control 23: Greece's Pharmacy Nightmares, and

3) Drug Price Control 22: Comparing Prices of Drugs, Diagnostic Tests, PFs.

Two from the online magazine, http://thelobbyist.biz that I wrote in August and September, 2011.

The next five articles are the cases of India. No. 6, National Pharmaceutical Pricing Authority is a government website about the Drugs (Price Control) Order 1995.

The 7th paper on Drugs Control, Indian Drug Pharmacy is nice, it lists the recent articles with links. But one needs to register and log in their site.

The article on  MNCs move SC over drug price control dated November 23, 2011 is interesting. Drug manufacturers, mainly multinational-innovators, are pleading the Indian Supreme Court (SC) to be heard on the issue.

This is a weird issue. Pricing of commodities like drugs are to be heard at the SC? Usually protagonists debate at an agency under the Executive Branch, say the Ministry or Department of Health. People go to the SC only to question the constitutionality of an order by the Executive or Legislative branch, or even by local government units (LGUs), but they should not debate the pricing of commodities there. But then again, I'm no lawyer, much less familiar with Indian laws and Constitution.

Another interesting article there, India plans to price-control 60% of pharma market dated November 01, 2011. It's about the plan of the Indian government to expand the list of price-controlled medicines from the current 34 to at least 400. For me, this is another weird development. India boasts of about 20,000+ pharmaceutical companies, from small to large, from generic to innovators. So one can expect that the level of competition among them should be very high, resulting in very low drug prices. So why another government coercion to further influence prices downwards? The competition is not working or the government officials simply want to look "heroes" to the people?

The last or 10th article there, Drug Price Controls Will Hurt Consumers  from The Independent Institute (US) dated April 17, 2001, is self explanatory. The author of the paper is proposing an alternative:

If prescription drug price regulations are not the answer, what should the government do? The government should provide targeted subsidies to low-income seniors and other low-income individuals to allow them access to private prescription drug insurance plans.

Most of those literatures here saying that "drug prices in India are a lot lower than in the Philippines" could be referring to drugs that are under price-controlled by the Indian government. So Norvasc 10 mg price-controlled in India should be several times cheaper compared to Norvasc 10 mg in 2009 prior to our price control policy implemented in August 16, 2009. But after the price control here, the prices of the two products should not be far behind. Consider also the fact that medicines here are taxed by the government, national and local, while they may not be taxed in India, and the price differential between the two countries is further exacerbated and distorted.
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See also:
Drug price control 17: Wikileaks on the planned Pfizer drugs withrawal, September 22, 2011
Drug price control 18: Wikileaks and former US Amb. Kenney on price control, September 28, 2011
Drug Price Control 19: Why is the Policy not Withrawn Yet, November 08, 2011
Drug Price Control 20: Competition, not Price Regulation, November 10, 2011
Drug Price Control 21: Illegalities in the Implementation of the Policy, November 14, 2011