KATHMANDU: As Nepal grows into a pluralistic and democratic society, many previously unheard of voices are finally finding platforms. Yet, amongst this plethora of voices, political rhetoric seem to be the loudest. What we generally hear are populist slogans from various groups unanimously often agreeing that ‘The government should provide free education, health care and food!’ Amidst all this demand for ‘free’ goods and services, I tend to wonder at our naivety. Do we really think that all those goods and services are ‘free’? Or do we actually not care where the money comes from as long as it is ‘free’ for us?
A firm believer of the adage ‘there is no such thing as a free lunch’, you may call me a sceptic for questioning the established welfare
function of the state. But having been a student of economics for quite some time, I cannot help but question the cost associated with everything. Even more so, what we students of economics have been taught as opportunity cost — where else could we have used this money? What is the next best alternative that would have given us the maximum benefit?
Every year, the government collects revenue from us through various measures — direct taxation, indirect taxation and several kinds of fees and fines. The welfare function that the government provides is often done in the name of the marginalised and under privileged or poor. But at the same time, poor Nepalis also buy goods and services from the market. The last time I checked, shopkeepers were not asking
anyone whether they were rich or poor and deducting taxes accordingly. So, we all do pay a certain amount
of money that helps fund these ‘free’ programmes of the government.
At the same time, how many of us actually receive the benefit of ‘free’ programmes run by the government? Look at the impending disaster at places like Bir Hospital or the lack of health personnel in remote areas. Public education is rapidly producing useless degrees and the strikes called on by rather friendly ‘students’ associations’ and ‘teachers’ association’ do not help the case either. This phenomenon of ‘tragedy of the commons’ is not limited to education and health. How many of us have heard that the hard-earned money we pay in taxes is being squandered at public corporations like Nepal Airlines and Nepal Oil Corporation? Yet, we keep demanding the government to give us ‘free’ goods and services and more.
The government invests billions of rupees raised from us through taxes or grants and loans in our names in welfare functions of the state every year. However, the state of welfare services reflects the sorry state of affairs of our government. The associated cost however does come to us eventually with the debt per Nepali growing to an estimated Rs 11,000. If it really was ‘free’, how come I owe so much money while I have not been able to use the services that government apparently provides?
Whenever we demand the state intervene in our lives with services like health and education, how come we do not realise that it does not come for ‘free’? The costs associated are not necessarily monetary all the time. A recent example of this is, after we established Nepal as a republic, we complained that the education system had been destroyed by the Shah dynasty since the only history we read was their
glorified past. It was the public education (read also the state decided curricula) that brought this on. Now, as we demand the state to take over education again, are we choosing to read about the Koirala family’s glorified past or R for Revolutionary?
With the writing of the new constitution, many of us are expecting miracles.
But while the constitution
provides us an essential framework to conduct our daily lives, it will not deliver wonders at our doorstep. As the new government is being formed and discussions ongoing about a new budget, maybe this is the right time to question our priorities and scrutinise public spending and the approaches we use. Today there are several policy alternatives available in the world to cater to the welfare function of the state and ensure that it reaches the poor. The wheel does not need to be reinvented.
In the education sector itself, voucher system championed by Nobel Laureate Milton Friedman is a possible
solution, which is currently being tested by India. A tried and tested approach in Nepal is involving the community itself for service delivery
or outsourcing the delivery to private parties while ensuring transparency. Therefore, a little bit of focus on examining costs and prioritising our expenditure and revising our policy approach to handle issues instead of going for ‘populist’ policies (read schemes like the ‘self employment scheme’) may yield better results.
Moreover, when we make all these endless demands from the state, we should also consider whether a state like Nepal can actually deliver. Using a pragmatic approach instead of ideological rhetoric may be the answer. If we really would like to reduce the cost of these ‘free’ programmes and actually ensure that public spending is helping build the nation (not just in government statistics), a major change in policy approach is called for in Nepal. Incremental benefits can be made, but it does require government to be a facilitator rather than the driver of economic growth. It also requires the government to think of alternative ways of using the civil society, media and other agencies to ensure that the marginalised are catered to. The government should also forgo its attitude of a ‘parent’.
So next time you hear the demand for ‘free’ goods and services and agree that the government should provide for all and everything, I would humbly request you to pause and think: ‘What are the likely implications for us? Is there a better way to go about this?’ After all, like the famous motivational speaker Shiv Khera says, ‘[even] freedom, is not free!’.
(The author is the research manager at Samriddhi, The Prosperity Foundation and can be reached at email@example.com)