Abstract
The old paradigm of development is that of a Mai-Baap Sarkar, based on the assumption that the active involvement of the state is essential for economic development and poverty removal. This spread of the Leviathan has been accompanied by a gradual but pervasive deterioration of governance. There is therefore the need for a new paradigm that recognizes that 'government failure' is a much more important problem than 'market failure', based on a recognition of the strengths and the weakness of the state and the people. A democratic society has enormous potential for entrepreneurship, innovation and creative development. The people, their diverse forms of activity and association such as companies, cooperatives, societies, trusts and other NGOs must be allowed and encouraged to play their due role. The state must focus on what it alone can do best and shed all activities that the people can do as well or better. The heavy hand of the government in the form of incentives, distorting laws, rules, regulations, procedures and red tape, have also corrupted industry, business and other organized interest groups. These must be removed so as to release the energy of the people. The state should confine itself to managing the economy so as to accelerate employment and income growth in a self-sustaining manner, ensure that all citizens receive their entitlements of basic public goods and services, and empower the poor so that they have equal rights (and responsibilities) with other citizens.
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