A New Path for Post-COVID Policy
The framework of public policy and public discourse are trapped in a technocratic state of mind. In the post-covid world, not just public policy, but its entire framework needs to be reimagined to make it more participatory.
This year, as we come out of a phase of assembly elections in India, the worst of Covid-19 may finally be behind us. At this stage, it is important to take a long, hard look at the norms embedded in our governance and do so with a sense of urgency as we transition into an uncertain and changing global order. In this piece, I would like to focus on the nature of policymaking, especially in the context of the pandemic, and flesh out areas that need rethinking.
Against the backdrop of a specific event or duration, intellectual commentary frequently descends into debates on the net failure or net success of an overall administrative effort. This is largely a rhetorical, not analytical, exercise and characterized many commentaries in the wake of the pandemic. Although they spoke in a unique context, their views operated in the same analytical terrain. Yes, there is a range of variables at play between policy responses and their results, especially given the threat of a rapidly mutating killer virus. But the ‘policy’ being debated here is itself a political category rooted in ideological assumptions. Thus, merely arguing for reforms in governance is hollow. It traps public discourse in a technocratic frame of mind when the framework itself demands reimagination.
For a fresh vantage point, let us look at the public health response in general through an unorthodox economic lens. The economist Richard Wagner offers detailed insight on this. He underlines that in the face of a complicated situation with multiple moving parts, policy decisions are not rational but based on the intuitions of a few people at the top. This is referred to as the ‘knowledge problem’—the issue that the government-planning elite always acts with a heavy deficit of knowledge, for they cannot capture as ‘data’ the constantly changing knowledge that is distributed in the minds of the entire population. Because it is next to impossible to circumvent this problem, economists like Wagner make this their starting point of analysis. They make it not a problem to be solved but a humble admission of the human condition.
A recent survey of Indian Administrative Service (IAS) officers, the highest-level bureaucrats of India, found that even though most of them preferred participatory measures to tactics like penalties for enforcing the lockdown, nearly half of them believed that compliance had more to do with the public’s fear of the law than anything else. This result is telling of the tension between a vision for ‘participatory’ governance and how detached it can be from daily life. Administration must proceed by acknowledging the complexity of reality, not by acting in an abstraction. Insofar as it doesn’t, we are bound to get different flavors of the same thing, and ideological camps can contest these endlessly. It is no surprise that substantial coercion often accompanies the solutions all camps suggest.
Where does this land us? Research on the topic lays out some clear implications: (1) even in the case of infection, where individual behaviour can have an externality on the public, one cannot assume that the government can solve this; (2) government experts are themselves lodged in the system they intervene in; (3) planning measures reduce reality to far simplified versions; (4) the previous three point to the need for rethinking foundational assumptions in economic epidemiological models. To clarify these points, let us consider the oxygen crisis that transpired in India during the most severe phase of Covid-19. I select this example for three reasons: (a) it was a deeply unsettling phase that left an imprint on our collective psyche, (b) it is hopefully behind us (almost a year has passed), but close enough in memory to merit extensive discussion, and (c) it was a palpably complex phenomenon that cannot be reduced to a single case study or viewpoint.
At the peak of India’s second wave of infection (April – May 2021), our healthcare facilities faced an acute shortage of medical oxygen, leading to widespread public agony and anxiety. The causes were multiple and ambiguous. Though the production, trade, stocking and usage of oxygen is privatized in India, only a dozen big vendors in the country produce it. It is an essential but costly drug. During the shortage, district-level hospitals, nursing homes, and small and medium-sized hospitals were seen to lack uninterrupted supply systems and sufficient storage. Some pundits blamed expensive private hospitals for not stocking up in advance in order to maximize their profits. Various aspects of the supply came under the jurisdiction of various entities, each acting under the constraints of their institutional incentives. In March 2020, a bureaucratic Empowered Group II (EGII) was reconstituted to supervise the allocation process for states. But regulatory action, rather than being altruistic, is shaped by competition between various lobbies. Thus, the EGII could not broker a consensus among states in time vis-à-vis adequate distribution. Towards the end of 2020, the Department of Pharmaceuticals as well as some state governments imposed price and procurement restrictions on medical oxygen as a response to increased demand.
Regulatory overload and demand pressures had perverse results for the market – hoarding by private groups and blockages by states prioritizing domestic needs. Certain states extended territorial jurisdiction over private producers. It was even reported that some had thwarted the Centre’s efforts for small-scale production with a view to continuing outside procurement. Evidently, even though enough oxygen was being produced domestically, an impeded supply chain lay at the heart of the problem. The states that witnessed the maximum caseloads were located far from those with robust production capacities. But it was quickly argued that the demand might have been underestimated, too. To overcome the deficiency of transport and storage infrastructure, the government announced that it would import a large quantity of medical oxygen. Manufacturing licenses were accelerated, and private industrial manufacturers were asked to divert their flows for medical use. Yet avoidable bottlenecks and bureaucratic delays persisted at various steps.
As research shows, decision-makers have no logical basis for prioritizing certain needs and services as essential over others. They cannot anticipate changing circumstances until it is too late and often hamper the spontaneous mechanisms of adjustment in an economy. This is primarily because they compress distinct spatial ways of living into a single dimension where many splintered economies conflict. The oxygen crisis portrayed a grim picture for us. It begot crushing letdowns with small, scattered pools of success. It showed us more than anything that policies only address beasts of their own making. Albeit to very different degrees, we saw a similar pattern play out in other events too, such as lockdowns and vaccination. One year on, there may be no magic wand. But we can use the burden of awareness to steer our thought in a new direction.
Studies in urban planning laws and public governance have emphasized on a pluralistic paradigm for administrative systems. This means that policies should shun universal categories in favour of sensitivity to difference. Even when there is no ‘crisis’, urban life is always entangled in diverse spaces, relations, plans and beliefs. If every individual is considered an entrepreneurial actor, it makes sense to have an arrangement that has not one but multiple, heterogeneous, competing and cooperating centres. When this complexity is removed from discussions on reforms, policy, public welfare and planning, it not only fails to grasp the real world but also manipulates it into something to be managed. Contrary to what the textbook may tell you, economics is not household management.
Acknowledgements: The author would like to thank the F A Hayek Program scholars for the conceptual foundations of this piece, and Devika Dinesh, Tejashree Murugan and Vaishnavi Chandrasekar for their valuable suggestions.
About: Jayat Joshi is a Don Lavoie Fellow at the Mercatus Center at George Mason University, and Freedom Fellow with the South Asia Students for Liberty.