On the economic origins of the No-Confidence Vote

I argued in the previous column that the no-confidence vote and the government’s response to it – flouting the very constitution President Granger and his party revere – indicate another chapter in the long-term and persistent ethnic conflict playing out in Guyana. Over the years going back to the mid to late 1980s, Mr. Ravi Dev, Dr Baytoram Ramharack and others have proposed two ethnic security dilemmas (ESDs). According to my interpretation of their written works, I have seen Dr David Hinds, Dr Henry Jeffrey and others support the broad thesis of two security dilemmas, but they disagree on the fundamental forces sustaining the dilemmas. While the layman (and party loyalists) would no doubt find reasons to demonize these persons, it is their academic disagreements which extend the frontiers of knowledge. Only by pushing out the knowledge frontier can a society grow and find solutions in the social, scientific, political and economic realms. This fact is well known to researchers.

Although not in my primary research interests, I took up the challenge to understand the ESDs using part of my core methodological training in economics and political economy. I challenged myself around 2010 to outline the economic origins and consequences of the ESDs. Prior to this effort, I was mainly concerned with demonstrating why the conventional textbook theories of monetary economics are inappropriate and sometimes harmful to the interests of people of the Caribbean and the Global South.

Describing and proposing the phenomena, others have done. For me, it was futile to argue who introduced “apan jaat” or which side started the ethnic distrust and on what date it all started. The distrust of one side feeds off the distrust of the other side. They are jointly determined or what economists call endogenously determined by some exogenous force. I argued over the years in columns and academic papers that both security dilemmas are jointly determined by conflict over the distribution of national income and wealth (hence, the exogenous force). Others have tried using cultural and other social explanations to unravel the endogeneity. That is no doubt part of the picture. However, unravelling causation in that context will be difficult and murky. Therefore, I am sticking with my economic explanation.

The ESDs play out in the strategic pro-ethnic voting not because Guyanese are intrinsically racist, but because there is no legal or constitutional framework that forces and incentivizes them to share and cooperate over big national policies, which have distributional implications. Every single economic policy from the boring annual budgets to long-term plans have implications for who gets what and how much. Information asymmetry is at the centre of the pro-ethnic strategic voting, which means people vote mainly to keep the other side out from government. The information shortage makes knowing how the other side will vote on the day of secret ballot an uncertainty. The self-serving politicians from both sides that stoke the strategic votes are not the cause of the ESDs; they merely intensify them by being agents in this long-term struggle for who gets what and in what amount.

So, what is this information asymmetry? It means that one group does not know how the other will vote on the day of election. It is a group-level problem and not a problem at the individual level. I am convinced that many people would like to vote for an independent party instead of their historical ethnic party. But there is no way of knowing whether the other side will do the same on the day of secret ballot. We have here a major coordination problem and information deficiency. Therefore, the best strategy or dominant strategy of the majority of East Indian masses is to vote PPP. Similarly, the dominant strategy of most of the African masses is to vote for PNC. Furthermore, a corollary in this setup is the tenuous nature of the voting base of third parties, which I explored a few years ago in a Development Watch column.  What I just outlined there is the prisoners’ dilemma trap that explains why Guyana underperformed its peers among the Caribbean and other small open developing economies since 1960. Therefore, my illustration of the ESDs allows us to make a prediction about development outcome. The framework is not meant to just describe and ascribe blame. Endogeneity, furthermore, means “there is no guilty race” as the old sage Eusi Kwayana said long ago. It just means that the behaviour of about 87% of the population is endogenized to the said exogenous force. This, moreover, is how economists determine logical causality.

Knowing that the majority of Guyanese voters find themselves in the bind of the logic of ESDs, the leaders of the main parties can now maximize their self-interest instead of the national interest. The parties high-ups wave the national flag, sing national songs, denigrate the diaspora for migrating and selling out, etc., but ultimately they are only concerned with their self-interest over what’s best for the country. The political party, the present constitution, the list system and the electoral structure are the tools for enabling the domination of the economic space. It is in this context, therefore, I interpret the haste of the PPP for proposing the no-confidence motion and fierceness with which the PNC is rebuffing the vote.

Moreover, intra-party contestation over who becomes the presidential candidate is fierce as we saw in the last decade in the PPP and the PNC. A shot was fired at one party’s congress and the other party insists that there must be a show of hands. The intra-party contestations are still with us up to today, but have changed somewhat. The ubiquitous Mr Jagdeo dominates the PPP, while the PNC has various factions vying to control the party and ultimately economic distribution. Why is this so important? It’s important because he who becomes the President (or who controls a weak candidate) and who is armed with the constitution’s list system, controls the flow of patronage to his base. The respective ethnic base, in turn, understands that this is the most certain source of economic gains given the present system. These gains are what economists call rents, since they are not earned through a competitive market process but by political networks and ethnic loyalty.

Of course, the winners try to buy some sense of legitimacy by offering generous rents and patronage to a selected few from the other side. The PPP is particularly good at this strategy. However, the leaders of both parties cannot appear to be overly generous; they stand to be accused by their respective base. Indeed, economic self-interest also breeds envy.

Herein lies the inequality problem which is ultimately linked to the strategic pro-ethnic voting. As the winning elites economically empower themselves and just a few from the other side, we should expect a more unequal society. Income and wealth distributions could be skewed in favour of the political leaders and those who are connected, regardless of ethnicity of working people. On the other hand, it is also possible that we could have distribution skewed in favour of one group. We do not have data on inequality by ethnicity, but some very original research by a young Guyanese PhD student, Mr. Collin Constantine, is for the first time quantifying overall income inequality. I will discuss this in the next column. We will also take up the question of how various policies have distributional implications. Since policy influences ethnic distribution, I will argue that the country needs some framework of power sharing to implement the kind of radical policies necessary for development.

Comments can be sent to tkhemraj@ncf.edu.


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