THE ECONOMIC WEEKLY August 6, 1960 EXPANSION OF BASIC UNIT the dilemma of effective govern­ requirements and requests rather than The tendency in local government ment; but whether effective govern­ State programmes, they could per­ has been to increase the size of the ment could also be democratic, and haps first be educated intensively by basic unit of self-government to coin­ fulfil the goal of developing local dedicated public servants and then cide with the area of development initiative, is more doubtful. left to themselves. The efficacy of blocks. Within this area, councils such local autonomous bodies as deve- (panchayat samitis) of local repre­ PROBLEM UNRESOLVED lopment agencies has never, to sentatives and government officials The problem remains unresolved: author's knowledge, been given a fair hold power for both development what is the function of local govern­ trial. work and local administration. Vil­ ments in rural India? If they are to lage administrations are, in effect, be agents of reform and develop­ In the hopes of reconciling the responsible to the councils which are ment along the lines of a national ideals of political democracy and part elected, part nominated, arid programme. larger units managed by economic development at the local part official. As a result, State power the State and responsible to the State level, governments have not recog­ increases to cover all aspects of governments would appear to be the nized their mutual inconsistency, and village administration through out only way of circumventing the in­ therefore this basic cause of disap­ body, although the State acts in con­ conveniences of political dispute. pointing results has not been tho­ sultation with citizen representatives. Thus panchayat samitis are proba­ roughly understood. This would lead At the time of writing, it is impos­ bly the most efficient, if not the most one to believe that decisions leading sible to discover how effective these democratic solution. But if the vil­ to basic reform in the village govern­ experiments had turned out to be. lages are to be primarily local admi­ ments through legislative measures In theory, they would seem to resolve nistrative bodies, inspired by village have, thus far. not been made. Nyasaland and the Federation I S Gulati "AN examination of the effect of This is the conclusion of two Ox­ cial claim that Nyasaland stood to federation on the economic de­ ford economists who undertook to benefit economically from its fede­ velopment of Nyasaland leads to study "the economic effects on Nya­ ration with the two Rhodesias. The three conclusions. In the first place, saland of its federation with the Report on Economic Survey of Nya­ it appears that the pace of economic Rhodesia." The study* and its con­ saland. 1958-59, an official docu­ growth in Nyasaland has. in fact, been clusions are significant for a number ment, claimed that "evidence from somewhat slower since federation than of reasons. In the first place, this all sources points to a considerable in the period before 1953. , . An independent assessment of the bene­ economic and social development in analysis of the situation, however, fits which Nyasaland actually derives the country in the course of the pre- shows that Federation has had both from political and economic- union sent decade and particularly since stimulating and retarding effects on with the two Rhodesias will be help­ 1953 when Nyasaland became part Nyasaland's development. The in­ ful in the current discussions taking of the Federation." Even on the creased public expenditures have sti­ place in London about the political basis of the data contained in this mulated development while the eco­ future of Nyasaland. Report, the above claim is. to say nomic union of Nyasaland with the the least, ill founded. UNEASY CASE more developed parts of the fede­ Secondly, the conclusions of this ration has worked in the opposite In the accompanying table of eco­ study cast strong doubts on the offi­ direction. That is the second con­ nomic indicators the authors have clusion . (In the third place.) association with Southern Rhodesia has benefited Nyasas by keeping open their opportunities for employ merit in Southern Rhodesia . - • (although') in other ways the asso­ ciation with Southern Rhodesia has been unfavourable for Nyasaland's economic development. The stimu­ lus to development arising from in- creased public expenditures has been, until now. solely the consequence of Nyasaland's association with North­ ern Rhodesia/' {Parenthesis ours) * Nyasaland: The Economics of Federation by Arthur Hazlewood and P D Henderson. Bulletin of the Oxford University Institute of Statistics, February I960. (Basil Blackwell Oxford.) 1225 THE ECONOMIC WEEKLY August 6, 1960 set out the data obtained from the derson point out, "repeatedly taken transactions of the three territories, Report in a form which facilitates for granted that the economic bene­ now forming the Federation did not comparison between periods of equal fits of federation are too obvious for in each case account for more than length before and since the Federa­ detailed argument to be necessary,' 20 per cent of their respective tran­ tion came into being. Only three of whereas the discussion of the above sactions with the rest of the world the nine indicators show a bigger arguments in the context of the Cen­ during 1950-52. The authors are, percentage rise in the post- than in tral African Federation leads them therefore, perfectly justified in say­ the pre-Federation period. to conclude that "the economic case ing that the three territories are less Item (e). balances due to Post for Federation has been greatly over- inter-dependent " than other groups Office Savings Bank depositors, regis­ stated." of countries whose separate existence ters a percentage increase three times INTER-DEPENDENT? and sovereignty are taken for grant­ ed." bigger than in the pre-Federation Let us look into the arguments one period. by one. The extent to which fede­ JOINT PLANNING Item (g), consumption of petrol ration as such has contributed to About the need for joint planning, and oil is a dubious indicator: the creating a wider market is uncertain. theoretically, the argument has its same Report goes to the ridiculous As we shall observe later, whatever force but it may not be realised in extent of giving the data on the use extension of the market has taken practice in spite of federation. The of motor vehicles "as indicators of place has benefited only one of the Economic Report, referred to earlier, general development because of the three territories, and that too the most provides evidence that in respect of widespread use of motor vehicles prosperous one. As regards the crea­ capital expenditure, at any rate, among all sections of the population tion of a more stable and broad there has been a "Mack of integrated except the Africans."' Of the total based economy, "since all three terri­ planning". The Report confesses population of 2.507.000 in 1956, tories export almost entirely primary that "under the present system, in­ Africans numbered 2.580.000 in Nya­ products, and are in this respect vestment may be made in a Federal saland. similar arid complementary, the argu­ ment is robbed of some of its force; service which carries a low priority, As for item the electricitv con­ and the Federal economy as a whole judged in terms of the overall needs sumption, "'the increase since fede- remains exposed to the risk of fluc- of the territory, while higher priori­ ration is exaggerated by the fact that tuations, particularly in view of its ties in territorial services may be supply increased through the com­ dependence on the copper-mining deferred through shortage of funds missioning of generating capacity the industry." and rice versa." The 'system refers installation of which was decided to I he constitutional structure of the upon before federation." On the third argument, the authors Federation. Since the arrangements sum up by saying that it is doubtful The more important indicators between I he federal and territorial whether any degree of economic in­ like "domestic money product. 'Afri­ levels of government regarding the ter-dependence, however great, is a can personal income' and 'exports of division of responsibilities and allo­ serious argument for federation; and crop and animal produce' show a cation of revenues are not based that in the ease of Central Africa, purely on economic considerations, substantial slowing down since the three territories are less interde­ it is, as the authors say. perhaps, Nyasaland joined the Federation. pendent than is often suggested. inevitable in any federation that the Taking the cases of the U K and ECONOMICS OF FEDERATION actual distribution of public expen­ the Republic of Ireland, and of diture deviates from what would be Thirdly, they should serve to cor­ the U S and Canada, in the regarded as rational distribution. rect the widely prevalent impression period 1954-57. the proportion of that it is always to the advantage of U K share in Irish exports was The fifth argument regarding the geographically contiguous areas to 83 per cent and in imports 55 stimulus to foreign capital has been join into some sort of a union, espe­ per cent; the proportion of U S given great prominence by the sup­ cially when they are by themselves share in Canadian exports was 60 porters of the federation. Accord­ small. Such a union may or may per cent and in imports 73 per ing to the authors. "iit is highly pro­ not take the political form of a fede­ cent. As against this, inter-territorial bable that federation has provided ration but it can almost be taken for granted that an economic union is followed, if not preceded, by some sort of close political alignment be­ tween the territories joining the union.