Gist of EPW July Week 2, 2020

The Economic and Political Weekly (EPW) is an important source of study material for IAS, especially for the current affairs segment. In this section, we give you the gist of the EPW magazine every week. The important topics covered in the weekly are analysed and explained in a simple language, all from a UPSC perspective.

TABLE OF CONTENTS

Gist of EPW Week 2, 2020:- Download PDF Here

 

1. Towards More Inclusive Water Management
2. Procedural Rationality in the time of COVID-19

Towards More Inclusive Water Management

Context:

The article focuses on different interdisciplinary approaches that should be adopted for better management of water as a public good.

Why is an interdisciplinary system required for water management?

  • Following points make the interdisciplinary approach necessary for water management:
    • Water management needs to be analyzed through different lenses as several factors govern the developmental decisions such as social, economic and environmental factors.
    • The interaction between water, land use and sanitation should be kept in mind while formulating the policies for water management.
    • Finally, the interactions between actions taken at different scales – local, national and international – also need to be understood.
  • However, the sector is currently managed in silos by institutions.

Critical thinking in Water Resource Planning

Ideas of some critical sociological thinkers can contribute to the more inclusive management of our ­water resources and truly ensure water for all.

  • Critical thinking develops a questioning perspective on the systems at hand.
  • It enables us to recognize how problems-riddled current systems are and how to improve prevailing practices.

Problems analyzed by the critical sociological thinkers in the existing practices:

  1. Dominance of Engineering and Economic Approaches
    1. Bias towards engineering and economic approaches can be found in modern water management.
    2. Water resource departments in most of the Indian states recruit only civil and mechanical engineers.
      1. They mainly focus on the cost-benefit analysis and often neglect the consultation of other stakeholders.
      2. The stakeholders of a ­hydropower project typically include Panchayats, non-governmental organi­zations, community welfare groups (that include farmers, users of irrigation faci­lities, women welfare groups, self-help groups, and ­village youth welfare groups), hydropower developers and the state energy department.
      3. Despite the presence of welfare groups, communities on the ground remain sidelined by the latter two stakeholders that unilaterally drive decisions to serve their interests in earning revenues from energy generation.
  2. Ignorance of the important issues such as equity, ecology, power and justice

The idea of profit maximization dominates the current water management institutions due to which certain important aspects are often neglected.

  1. Equity gets hampered
    1. There is neither benefit-sharing with locals nor their ­inclusion in decision-making around sustainability concerns.
    2. For instance, locals often find out about a life-altering hydropower project only after the arrival of machi­nery and workers in the area.
    3. This develops a feeling of exclusion among the communities which are displaced by these projects.
  2. Ecological concerns
    1. Rivers are not human artifacts; they are natural pheno­mena, integral components of ecological systems, and inextricable parts of the cultural, social, economic and spiritual lives of the communities concerned.
    2. They are not pipelines to be cut, turned around, welded and rejoined.
  3. Power
    1. More preference to the engineering and economic approaches leads to the supremacy of certain powerful classes over others.
  4. Justice
    1. Under the reductionist approach, water is often seen as a resource to be exploited for various water services and not as a resource that has certain basic economic, cultural, social and environmental value.
    2. The current uses of water reflect only scientific and economic sense. This “scientism” serves the political and economic motives of the powerful.

Other concerns

  • Modern-day planning ignores the plurality of knowledge and realities.
    • The domination of research and policy by powerful castes, classes, and gender recognizes only their knowledge.
    • Water projects based on colonial designs and heavy ­infrastructure reflect the masculine, centralization-focused identities that ­designed these systems.
  • According to some researchers, modern-day practices prefer certain knowledge systems over others and lead to unequal distribution of power.
    • For example, the Green Revolution which is characterized by high-yielding variety crops, intensive use of inputs and market-oriented farming, dominates the other agricultural practices.
    • This has led to investments in large hydropower projects for irrigation at the cost of land that communities relied on for generations.
    • This practice successfully served the objectives of the World Bank but has worsened the condition of marginalized vulnerable agricultural groups by providing privilege to certain knowledge.

Solutions

  1. “Praxis”
    1. Some researchers have developed the idea of “praxis” which focuses on participatory thinking and engagement with communities on the ground.
      1. This method is adopted by recent participatory practices. These methods can be used to integrate ­local people into development initiatives and enhance their control over the resource allocation and decision-making processes.
      2. It will enable the stakeholders to share their opinion in the important projects.
  2. “Strategic Purposive Action” and “Commutative Action”
    1. Another method suggested by researchers is “strategic purposive action” and “communicative action”. The objective of this method is to act in coordination with others and go beyond the egocentric approach.
      1. This approach is beneficial in water resource planning particularly in the situation of conflicts.
      2. It will help to maximize collective welfare and eradicate conflicts.
  3. “Standpoint theory”
    1. It enables them to think and act in favor of the disadvantaged.
    2. The Standpoint Theory will help to develop empathy among engineers, planners and policymakers towards the hardships and aspirations of the marginalized communities.

Conclusion

  • Ultimately, engaging with the social sciences can ground us to the contexts we live and work in, create a sense of humility in our abilities, and inculcate a consciousness towards those on whom we have an impact.
  • It is of greater importance to employ critical theories to constructively reflect on current water management practices and improve these systems.
  • Expan­ding the range of approaches that ­inform water governance in India can go a long way in making the system more just, inclusive, and efficient.

Procedural Rationality in the time of COVID-19

Context:

  • This article focuses on the importance of procedural rationality amidst the COVID-19 pandemic. 

Background:

  • Apart from the flu pandemic of 1918, no pandemic has ever come close to COVID-19 in the last 100 years.
  • The responses of nations have been varied starting from total denial to imposing complete lockdown putting economy and life at standstill.
  • We are now entering a transition phase where different countries are contemplating reopening their economies partially, fully, or in stages.
    • India, for example, had introduced nationwide colour-coded activity zones, where red zones were extre­mely restrictive and green zones were attempting a return to normalcy. 
      • Now we have most sectors operating with rules and regulations put in place by the Government.  
    • The USA has delegated the authority to its states, without ­adhering to a single coordinated nationwide criterion. 
  • However, these steps are like shooting in the dark without any promising antidote.

Uncertainty created due to COVID-19:

The pandemic has created three levels of uncertainty:

  1. Biological uncertainty:
  • It arises from the fact that we are unsure of treatment drugs and do not have a clear time span for a vaccine. 
  • Furthermore, we have very limited knowledge of COVID-19 and Sars-Cov-2.
  • However, social distancing has partially provided some relief by flattening the new infections curve but, reopening will again trigger the situation.
  • Most countries are facing challenges in the monitoring of asymptomatic patients and there is a lack of protective equipment for frontline workers, medical staff, doctors and nurses.
  • Not only these, but countries are also lacking medical necessities such as hospital beds, ventilators, etc. for the patients.

2. Economic uncertainty:

  • With economic activities coming to a halt, the pandemic has created a situation of economic uncertainty.
  • For ins­tance, without a termination point, it is simply not possible to do dynamic optimisation, that is, optimal decisions over multiple time periods are not feasible.
    • Due to this, businesses, large and small, will defer investment decisions no ­matter how cheap loans become.
    •  Production planning is also made difficult by the fact that supply chains are now global, subject to vulnerabilities outside a firm’s control.
  • Add to that the substantial uncertainty on the demand side, which is harder to predict even under normal circumstances. Job loss, falling wages and movement of labour across regions are going to affect demand on an unprecedented global scale. 

3. Uncertainty due to the interaction between biological and economic uncertainty

  • The third type of uncertainty has turned out due to the interaction between biological and economic uncertainties. 
  • Coupled with individual-specific uncertainty, it will develop a variety of individual responses making it more difficult to offer clear solutions.

Concept of Procedural Rationality

  • Economists while making decisions or formulating any policy, always quantify all the possible outcomes.
  • But, under a situation of ambiguity like the current global crisis, it is not possible to predict all the possible outcomes because we don’t know what the different states of the world might be and/or their associated probability distribution.
  • Some economists suggest that in such a complex situation, “we should shift our focus from the outcomes of the process to the process itself”. 
  • They suggest that our goal should be to have a method for making decisions that satisfy consistency in a way that suggests and leads to “reasonably good” outcomes. They termed it as “procedural rationality.” 

Procedural rationality at work

To see how the evidence stacks up in ­favour of procedural rationality in the current crisis, we need to exa­mine the pandemic responses in light of exposure to other such phenomena in the past, particularly exposure to SARS.

  • SARS cases were first found in the Guangdong province of China in Nove­mber 2002. 
  • The disease spread to 26 countries over the next several months causing 774 deaths. Countries with the highest deaths from SARS were: China (349), Hong Kong (299), Taiwan (37), Canada (43), and Singapore (33). With the exception of Canada and France, the Western world did not suffer any casualties.

I) Analysis of country-wise response to the current crisis:

Taiwan’s Response:

  • In response to the SARS crisis, Taiwan had established the National Health Command Centre in 2004 with the objective to prevent the spread of any such pandemic in the future. As a result, in response to the current COVID crisis, it immediately started screening passengers coming from Wuhan.
  • Further, Taiwan merged its national health insurance and immigration and customs database and started using the travel history and clinical symptoms to identify the suspects of the coronavirus disease.
  • Taiwan centralized the services such as production and distribution of masks and important healthcare guidelines were passed on to the general public on a priority basis.

Singapore’s Response:

  • Singapore placed travel restrictions on people coming from China, against the World Health Organization’s advice, along with aggressive testing and tracking right away.
  • In addition to this, Singapore also provided free testing and quarantine allowance.

Hong Kong’s Response:

  • Hong Kong promptly sealed all the borders connected to China and made 14 days quarantine mandatory for the people coming from China.
  • Schools, universities and public places were closed and people were encouraged to work from home in order to prevent the outbreak of the disease.

United States’ response:

  • In contrast to the above countries, the US, even after being warned about the pandemic in January 2020, did not take any measures till the third week of March.
  • In the third week of March 2020, the US issued guidelines urging people to stay at home, avoid travel and gatherings of more than 10 people at public places, bars and restaurants.

Canada’s Response:

  • Canada aggressively focused on more and more testing and ensured the availability of testing kits and protection equipment. 
  • Due to prior experience of the SARS disease, the health agencies at different levels were able to coordinate effectively.

Other European Countries:

  • In Europe, Italy, once the epicentre of COVID-19, refused to take strict measures until the situation got out of hand. 
    • Initially, the Italian government imposed partial lockdown only in certain “red zones.” 
  • The story of the UK is not different from Italy. It was not until the third week of March 2020, that any strict measures were taken.
  • The late response can be seen in the case of many other European countries and some of them have not imposed lockdown yet.
  • One explanation for such a response could be that the Western world in general has not faced catastrophic events of such propor­tions since World War II.
  • Except for Canada, the Western world cumulatively had fewer than 100 SARS cases. 

It can be said from the gathered evidence that developing countries like India, which are facing various challenges, have responded better than the developed countries to the current pandemic.

II) Analysis of sectoral performance

Let us examine the performance of the different sectors of the economy:

(i) Industrial Sector:

  • The airline industry and the hotel industry have been affected severely due to the current pandemic because they totally depend on travel. But the hotel industry claims that its recovery is faster than the airline industry because its franchise depends on a diverse set of owners.
  • It is believed that the low-cost airlines in the US will do better than their counterparts in Europe because of tougher competition.
  • Sectors of an industry that are constantly innovating or face more competition and adversity seem to be doing better and preparing better. 

(ii) Education Sector: 

  • The education sector with a significant proportion of higher education immediately adapted itself to online teaching because they are constantly dealing with new technologies.

(iii) Agriculture:

  • Agriculture is probably the sector that is always dealing with some type of ­uncertainty. It is subject to economic ­uncertainty because an individual farmer or country has little control over the global output or agricultural policies ­followed in other countries. 
  • We can take the example of the Indian agricultural sector here. Despite facing adverse uncertainties such as demonetization, several droughts, anti-inflationary practices, and the current pandemic, the Indian agricultural sector is able to make decisions and adapt faster than the other sectors of the economy due to its experience with adversity.
  • India is facing the problem of hunger but not starving, at least, not for the time being because of our public distribution system and pro-poor food distribution-related efforts in different states.

III) Analysis of risk taking behaviour

  • Finally, the procedural rationality suggests that the experience of this pandemic is likely to influence future beha­viour as well, and these changes could persist long after the pandemic is over.
  • According to procedural rationality, those who have experienced certain economic and non-economic events, which are severe in impacts, are more risk-averse.
  • The experience of a large macroeconomic shock, such as the Great Depression, ­exposure to war during childhood, and the experience of a natural disaster can cause people to become more risk-averse. 
    • For example, individuals who experienced the Great Depression tend to be less ­active in the stock market.
    • Similar ­effects on risk-taking behaviour have been observed for individuals who were exposed to wars. 
      • For instance, adults who were exposed to World War II as children show greater risk aversion, are less likely to invest in stocks and more likely to have life insurance.
  • Ultimately, individual behavior tends to encompass a wide variety of ­experiences and can, therefore, be more individual-specific. 
  • It would not be surprising to see people maintaining social distance, washing hands, wearing masks in public places, and taking other precautionary measures long after this pandemic is over.
  • Their risk attitudes and their beliefs about the recurrence of a pandemic are likely to reduce activities that might expose them to strangers, such as traveling by plane, eating out at restaurants, or shopping at malls, affec­ting such sectors more adversely than others.

Conclusion

  • We cannot predict what is going to happen in the future, but we can rely on procedural rationality.
  • We should hope that things get better sooner than later.
  • In the meantime, the outcomes for countries, sectors of the economy, and individuals will vary based on their experiences and decision criteria.

For more EPW articles, read “Gist of EPW”.

Leave a Comment

Your email address will not be published. Required fields are marked *