Thoughts on economics and liberty

Is India a Flailing State? (2009) by Lant Pritchett: some observations

In April this year I had chanced upon Lant Pritchett’s 2009 article “Is India a Flailing State?” and commented briefly about it here.

I did not have time, then, to read it in full, but was able to identify a really big problem with the article: a claim about “the incredibly spectacular intelligence, cleverness, and competence of the top tiers of the Indian government” (the IAS) and that “The brains of the Indian state can formulate excellent policies and programs in nearly every domain.”

And yet Pritchett went on to say, “the capability of the Indian state to implement programs and policies is weak”.

This is exactly what Gurcharan says, and I’ve rebutted him in BFN at length.

Are We Weak in Policy Design or Implementation?
Does the poor performance of the Indian bureaucracy lie in bad policy or in poor implementation? Some commentators such as Paul Appleby and Gurcharan Das have suggested that poor implementation is a problem peculiar to India, and has allegedly arisen from a uniquely Indian trait of lack of action-mindedness. This view believes poor project management is the primary weaknesses of the Indian bureaucracy.
However, I don’t think there is some uniquely Indian trait. The malaise lies elsewhere. I believe it starts with a lack of systems thinking. Indians fit into good systems designed by others but rarely design good systems on their own.

I then go on to explain at length (I wish I had time to simplify and revise the argument, which I will in the second edition of BFN) why Indian do not conceptualise their system as whole, with focus on underlying incentives.

In chapters 4 and 6 of BFN I’ve elaborated on the socialist and Colonial incentives at work at every step of India’s governance system.

I am writing today another (brief) article on governance reforms which I’ll send to Lant in case he hasn’t got the time to read BFN.

Let me say that although Lant’s article touches the tip of the iceberg, he has failed to drill into the details and has therefore failed to identify the strong incentives for poor policy making, lack of accountability and corruption that are embedded in the Indian system.

He cites my ex-boss and good friend NC Saxena at length – who was the Director of LBSNAA when I was professor of management there. I think NC is partly right in his analysis, but NC was always a socialist and did not enter deeply into the details of the incentives at work in India.

I do hope that some day people like Lant will start paying attention to what I’ve been saying for nearly 20 years now. If they start understanding what is wrong with India’s governance system, they can help influence change.

Sanjeev Sabhlok

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