Does Democracy hit the Poor?

All parties in the general elections swear to eradicate poverty. Yet voters know that any party coming to power will adopt policies targeted mainly at the non-poor.

Central and state governments have instituted hundreds of subsidies over the years. All expert studies show that the bulk of these subsidies go the non-poor. Dr Kirit Parikh has estimated that barely a fifth of the food subsidy reaches the poor. Up to two-third of educational subsidies go to higher education, which is dominated by the non-poor. The overwhelming bulk of subsidised fertiliser, canal water, rural credit, and rural benefits non-poor farmers. Subsidies for industry benefit millionaires.

Observers usually ascribe this to the power of interest groups. This is no doubt true to some extent, but I think the problem is more fundamental. I suspect democracy itself is biased against the poorest. Democracy is majoritarian, and the poorest are rarely a majority.

The government says one-fifth of the population is below the poverty line. Others put at it around one-third. Either way, the poor are a minority.

While democracy is majoritarian, minorities count too, since they are capable of forming part of a majority coalition. So democracy will certainly pay some heed to needs of the bottom one-fifth. But it will necessarily pay more attention to the non-poor four-fifths.

In a democracy, the votes of the poor and non-poor have exactly the same value. Indeed, the votes of the richest 20 per cent count for as much as the poorest 20 per cent. Many people think, mistakenly, that democracy is inherently egalitarian. This is not so. Democracy is inherently majoritarian. And the majority in any polity, no matter what its composition, will necessarily include many sections other than the bottom 20 per cent.

Most voters are in the middle of both the income and ideological spectrum, the world over. Save in exceptional cases, elections are not won by the far left or far right. They are won by parties closer to the centre, because that is where most voters are. Indeed, if an extremist party comes within reach of power, it immediately begins to moderate its policies to attract voters in the centre

When a feudal society first turns democratic, it may have an upper crust of 10 per cent with everybody else at the bottom. Democracy in such circumstances will ensure a speedy redistribution that enables large numbers of poor to rise to the middle. But as people move from the bottom to the middle, the poor cease to constitute the majority, and become a minority. The more poverty alleviation succeeds, the less will be the clout of those who remain poor.

Many thinkers in India urge that the food subsidy should be restricted to the poor, not be hogged by the non-poor, regard a ration card as a birthright. It is not politically difficult to exclude the top 10 per cent, who buy very little from ration shops anyway. But consumers in the middle account for up to two-thirds of the population, and no politician wants to antagonise them.

Similarly, non-poor farmers greatly outnumber poor ones. So politicians want subsidies for all farmers, and will not withdraw them from the better-off. The same logic applies to subsidised hospital care or university education. The middle voters have a numerical strength no politician dares ignore.

This is equally true in other countries, rich and poor. A global review by Dr Emanuel Jimenez says that the richest quarter of the population utilises 51 to 83 percent of higher educational subsidies in Chile, Colombia, Indonesia and Malaysia, while the poorest 40 per cent utilise only15 per cent of the money. In Indonesia, the poorest 40 per cent get only 15 per cent of public medical benefits. The story goes on endlessly.

In rich countries, the welfare state was originally aimed at the poorest and unemployed. But entitlements were not limited to the needy and became universalised. Ironically, left-wing parties (like the British Labour Party) were often at the fore of universalisation. This meant benefits leaked to the non-poor These are now so large that they are bankrupting several European countries, reducing their ability to cater to the really poor.

Ronald Reagan and Margaret Thatcher were both outspoken opponents of the welfare state, yet did little to trim it. Why ? Because the welfare state benefits mainly the vast middle class. Neither Mr Reagan nor Mrs Thatcher had the guts to cut middle-class entitlements: they simply cut the entitlements of the poor, whose voting power was small.

So, is democracy bad for the poor? By no means. Indeed, democracy gives them a chance to have influence that goes well beyond their bare numbers. But this is possible only if the poorest organise themselves effectively, and form coalitions with other groups big enough to constitute a majority. For the poor to pit themselves against all others is a strategy doomed to failure (something Mr Kanshi Ram needs to learn). Lone wolves are easy prey, but a wolf pack can be the strongest force in the jungle.

What do you think?