Public trust shapes policy-making. Time for the Modi govt to harvest the trust reposed in it for reforms
As per the 2015 Edelman Trust Barometer, respondents in 21 out of 27 market economies surveyed deeply distrust their governments or business or both (with the level of trust below 50%). In India, however, the trust levels with both government and business, as per the survey, seem strong (82% and 84%, respectively).
Given that political reading of the public opinion is likely to cause a government to push ahead or retreat from a proposed change in policy, citizens’ trust holds considerable sway over public policy. And, as Steve Utterwulghe, a World Bank Specialist on private sector development notes in a blog post, multi-stakeholder dialogues, especially those facilitated by the government or industry, can help reduce trust deficit among the general public. Interestingly, growing distrust with the government or industry creates conditions rife for over-regulation with the public strongly backing creation, and often sweeping empowerment of regulatory institutions—quite in the mould of the Jan Lokpal agitations of 2013.
Utterwulghe cites research published in the Quarterly Journal of Economics that holds “government regulation is strongly negatively correlated with measures of trust”. Such over-regulation creates conditions in which the market can’t thrive and consequently growth stagnates, fuelling further distrust. Given the Modi-led government still enjoys the trust of the people, it should leverage this to bring about reforms in the upcoming budget that may not yet be popular, but could shape India’s economic future for the better.