There is a famous story, which goes something like this: An international exhibition of crabs was held in Japan. All countries sent their best and the most exotic variety of crabs. The representatives of each country were exhibiting crabs in sealed glass containers. However, in the Indian stall the crabs were on display in open containers, and the worried organizers asked the Indian representative whether the crabs would not climb out of the containers. Pat came the answer from the Indian: “Ha! Nothing to worry; these are Indian crabs. If one tries to climb up, the rest will gang up and will bring it down!” Quite often we hear such lamentations about the incapacity of Indians to work together.

Some decades ago, development or a nation’s well-being was measured in terms of gross of physical assets. Thanks to economists such as Mahbub ul Haq, we now have better tools, like Human Development Index (HDI) to measure well being of a nation. Similarly, the concept of social capital is gaining prominence in understanding and identifying the suitable conditions for development and harmonious existence. The reconstruction of war-ravaged South Korea, Japan and Western Europe, and their consequent rapid development have been attributed to the ability of their people to work together. On the contrary, the slow growth rates of the Indian economy and the problems afflicting our polity have been attributed to our inability to work together in teams. The ability to work together in groups is often termed as part of the social capital, and this is contingent upon “trust” between the individuals. Trust in turn is a function of shared values and norms.

Indians do work together; however primordial loyalties predominate such cooperative behavior. Primordial loyalties are the axis along which substantial amounts of charity work is done – caste associations, function halls and hostels along caste lines to name a few. All these are definitely products of collective action, but they are based on interests of particular groups. As Eric M Uslaner points out, such collective action is based on particularized trust rather than on generalized trust; hence, such actions cannot be treated as social capital. Whatever little positive impact particularized trust may have is far outweighed by its negative consequences. Social schisms and communal violence are manifestations of such particularized trust. Even worse, it becomes an important factor for continuation of inegalitarian practices. The predominance of particularized trust and inegalitarian practices has an impact on institutions of state and goods/outcomes of democracy. The inefficient functioning of the state apparatus is a consequence of the inability of the individuals manning the state apparatus to work collectively. The services rendered and the distribution of resources by state apparatus will not be rational, as the selection of beneficiaries will be influenced by various externalities.

The absence of social capital can have pernicious impact on democracy. Democracy is not merely voting in elections, but it is a way of life wherein the citizens collectively deliberate and decide on issues that affect their lives. Associational life and civic participation are the defining features of democracy, which implies that people have to work together. However, in India today, there is very little of social capital in terms of true associational life and civic participation. Apart from sociological reasons such as hierarchical society, the weak state apparatus is an important reason for the absence of “trust”, which is a necessary prerequisite for true collective action. As Francis Fukuyama succinctly summed up: “ No one will volunteer to work for a neighborhood organization if the police cannot guarantee public safety; no one will trust the government if public officials are immune to prosecution; no one will sign a business contract with a stranger in the absence of tort law and enforceable contracts.” To put it briefly, social capital cannot stand in thin air; it needs support structures and it demands an effective government.

This brings us to another important aspect. If civic participation or working together for societal good on the basis of generalized trust demands effective government, then some of the assumptions that form the bedrock of our development policies have to be revisited. In the late 1980’s and early 1990’s, India along with many other countries opened up its economy. It was argued that the state must withdraw from non-core sectors and private sector should be allowed to play a greater role in the economy. Greater role for civil society was also advocated to justify the withdrawal of the state. Civil society is a domain where ordinary citizens voluntarily work together to achieve common good. However, it is now evident that for citizens to voluntarily work together on the basis of generalized trust we need a vibrant state.  To have a vibrant state, we have to work for political reforms not merely to ensure proper representation but also to ensure that people interact with each other with trust and dignity. It is trust and dignity which are the real foundations for a true democracy and sustainable development.

There are three issues which need to be examined in this context. First, the absence of ‘trust’ in our society across social divides is manifesting in the Indian state in the form of centralization. The centralized authority does not trust the smaller tiers of government, or allow functioning of peers. The way chief ministers function, or state governments stifle local governments is too well known to need elaboration. Second, we cannot confront primordial loyalties and particularized trust by preaching or through patriotic fervour.  We need to recreate state institutions in a manner that politics of individuation takes root. An individual who realizes that her personal benefits are linked to ‘better’ service delivery (health care, education, policing, etc.) and not to primordial loyalties (teacher or doctor of ‘my caste’) is more likely to break out of the shackles of social divisions. Institutional mechanisms to decentralize power, promote accountability, and empower the citizen-consumer are the best guarantors of social harmony across the traditional barriers.

Finally, economic liberalization cannot mean the mindless roll-back of the state. What is needed is the redefinition of the state, with sharper and more focused role. A weak and ineffective state is sure to drive society to anarchy and worse. Both prosperity and harmony are possible only when the state recognizes its limitations, but also fulfils its potential.