Friday, 21 October 2016

Why the Human Rights based approach to Development is either unnecessary or counterproductive

The Human Rights based approach to Development stipulates that all human beings have inalienable rights to what Rawls called 'primary goods' including food, water, sanitation, education, due process of law and so on. These rights create a corresponding obligation on the part of the State with respect to all residents within its borders.
Some, if not all, primary goods are scarce (i.e. their use has an opportunity cost) and thus come within the purview of Economic Science. This raises the question, is Rights based Development compatible with Economic theory?

A sanguine response might go as follows- 'If Society treats human beings decently, they will be more productive. Society will be better off. A virtuous circle would be created. Furthermore, wealthy countries could help poor countries. As these poor countries rise up, they will buy more from the wealthy thus enabling their economy to expand. War and Religious intolerance and institutionalized Misogyny and the stigmatizing or scapegoating of minorities will come to an end. The World will be peaceful and prosperous.'

The problem here is that if human beings are rational and if the above arguments are empirically valid, then there is no need for a 'Human Rights based approach' at all. People and Nations would spontaneously follow the policy prescriptions of this approach without any need for a costly bureaucracy to enunciate its precepts.
What they wouldn't do, however, is to Legally enshrine human rights to scarce primary goods.
Well, if all human beings are granted a legal entitlement to scarce primary goods, then it follows that the obligation bearing party must either have been granted legal rights of control over scarce resources so as to fulfill these entitlements or else have appropriated such control by some means, fair or foul. If the obligation bearing party has no control over the allocation of scarce primary goods, legal or appropriated, it can't fulfill the 'vinculum juris'- the bond of law- between it and the rights-bearers. This does not mean that primary good entitlements will definitely not be fulfilled. Private charity or Exit by the Poor or a self-help program may fill the gap. However, the law in this respect would be a dead letter.
Let us now look at the sort of legal rights of control which the obligation-bearer may be awarded in order to comply with Laws granting a Human Right to a particular primary good- let us say drinking water, which, clearly, is essential to human functioning.
Imagine you are an invalid living in the Kibera slum in Nairobi. You pay up to 50 times as much for drinking water as the wealthy residents of Muthaiga. Clearly, your human right to water is not being met because you have no income. Your health is in danger because you are probably using less water than is compatible with health and hygiene.
What happens if the State not just passes a law assuring you of sufficient water at a price you can afford but, what's more, enforces this law against the Municipal Water Company?
The answer depends on whether the Municipal Water Company is granted a corresponding legal 'right of control' over available water resources. Ideally, the Water Company will calculate how much water it has to distribute for free, or at a very low cost, and find the most economical method to distribute it to the poorest and most vulnerable. They will then calculate how to sell their remaining water so as to generate a surplus. This is called 'price discrimination'. It works if the market can be segmented at low cost such that people who can afford the high price can't buy at a low price.

If the Water Company is run by benevolent people of the highest integrity, the story ends here. However, in that case, there would have been no need for the law. In fact, the law has created a problem for the Water Company which it didn't have before. What is that problem? It is that it now has a residual right of control over a scarce resource. Bad people, who previously weren't interested in this form of social work, want to get control over the Water Company. If they succeed, by hook or crook, they can borrow money on the strength of their property right over locally available water and use that money to bribe poor people to leave Kibera. In other words, the creation of a property right to offset an obligation to satisfy a human right can skew wealth distribution in a manner which creates a runaway process unfavorable to the poorest and most vulnerable.
From the Economic point of view, it may look like a 'fair' exchange- a 'Hicks-Kaldor' welfare improvement- if a poor man takes money to leave a place where he has an entitlement. Actually, it is nothing of the sort.
Human rights have created a Property right inimical to the very human beings in whose name it was created.

What if we don't create any new right of control to water? We could say to the Water Company- 'we don't care how or from where you procure the water. We certainly aren't going to give you any legal right to any water anywhere. You buy your water from wherever you like and sell it at whatever price you like but just make sure everybody's human right to water is met.'
In this case, though the Water Company gains no new 'right of control', it can appropriate such a right without legal backing. How? Well, it can ration water such that rich people are told that their taps will stay dry on certain days so that the poor can get their share.
This may sound like a good thing. Why should the rich not suffer a little?
The answer is that a 'parallel market' will develop based on a mix of technologies. The very rich will bore their own tubewells and have ample underground reservoirs for their own gated communities permitting them to exit the Water Company's network. The middle class will have to make do with storage tanks replenished by tankers. The working poor will take the brunt- paying high prices for jerry cans. The destitute may initially still get their legally mandated entitlement. But, at the margin, their condition deteriorates. Why? Well, even if ground water is non-depleting or there is plenty of riverine water (i.e. water isn't scarce, only the distribution network uses up scarce resources) then, though no ecological crunch occurs, it is still the case that Man does not live by any one primary good alone. When the poor, as a group, have to pay more for an essential item the whole ecology of their neighborhood changes. Niches which permitted the poorest to survive can suddenly disappear.
The effect of 'appropriable rights of control' turn out to be the same as that of residual rights of control. Both end up enriching the few and pushing the very poorest towards the wall.

In practice, there is a middle way. What is it? Well a mixture of residuary legal rights and de facto appropriable rights can create an opaque rent seeking environment- it may look 'privatized', it may appear 'public-private', it may be wholly State owned- in which there is no accountability, no efficiency, some people get rich and either some nationalized banks or funding organizations get stuck with bad loans or else the whole thing is buried in the Public Sector's Borrowing Requirement. Once again it is the poorer and less sophisticated element of the working population which pays the price for the inevitable macroeconomic day of reckoning.

Finally, let us mention what actually happens in many 'illegal' slums across the world. Here public provision of stand pipes or water trucks creates an economic rent which is captured by the local slum-lord or 'water mafia'. This by itself can lead to the political instrumentalization of disorder from which once again it is the poorest who suffer most.

Let us leave water aside. We are nowadays all too aware that water is scarce over large parts of the globe. What about a different type of Primary Good, one free from ecological constraints- what about the Right to Education as promulgated in India? What is wrong with saying that the Schools for the Rich should admit a percentage of poor kids from the neighborhood? After all, many of the leading families in India are descended from very poor kids who managed to get a scholarship. Poor kids are just as good as rich kids- in fact they are more likely to be of good character and to have a thirst for knowledge.
The answer, of course, is that this reduces the incentive of the more vocal and socially conscious poor families to apply pressure to their elected representatives to ensure that State Schools are fit for purpose. Indeed, India's R.T.E legislation is premised on the notion that State Schools are worthless and nothing can be done about it because Govt. School teachers- who are far better paid than those in the sort of private schools which have enabled the urban poor to rise up- count the votes in Elections.

Still, leaving aside the issue of getting State Schools to perform, what great harm does it do to force good private schools to admit a portion of poor kids? The answer is that good private schools have only become good by making students pass rigorous exams. Students who fail exams are kept back or expelled. This isn't allowed under R.T.E because otherwise the fear is that elite schools will get get rid of unprofitable or underachieving students from economically weaker sections of society.
What has the outcome of R.T.E been so far? The answer is that it has failed utterly in at least 90 percent of cases. On balance it has reduced life chances for the poor because good unaided schools lacking infrastructure were closed down while bad aided or Govt. schools were exempt from the requirement to have adequate infrastructure.
Going forward, some good unaided schools may actually honor the 25 percent quota- but they would have done so anyway- while the vast majority will flout its provisions by paying a bribe or using their influence. Aided schools will either become indistinguishable from the State Schools they compete with- i.e. worthless- or else game the system to capture rents.
In theory the Indian RTE act was the best in the world because, unlike America, it was the Government's duty, not the parent's, to ensure every child got an education whether or not they had money to pay. Yet, it is a miserable failure which has made things worse for everybody concerned.
No administration will repeal it but it will be ignored like Vinobha Bhave's crackpot 'Bhoodan' scheme which led to almost all the land in Bihar being gifted away to the poor. The result of that piece of nonsense was Bihar's decline into anarchy.

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