What is holding back India’s economic development? What prevents us from realizing our undoubted potential? The current economic slowdown has re-ignited the debate on economic growth and development.
If one were to follow the mainstream debates, the answers would revolve around insufficient liberalization, over-bearing government, and pervasive corruption. Such discussions about development focus on the progress made in social and economic spheres. For those inhabiting the Bharat versus India debate, development means access to a lifestyle and opportunities that are comparable with developed countries. For the academic and policymaker, development is about rapid growth in gross domestic product and macroeconomic stability.
But such explanations are only a small part of the story and fail to address the basic requirements of development. It is not as though development, especially one that is sustainable, just happens. Near double digit growth rates for a sustained period does not happen just because of a large young population and policies that unlock the power of private enterprise. They are built on the strong foundations of the rule of law, enforceable property rights, transparent contract management, human capacity development, and the delivery of good quality public goods and services. Public systems, especially those at the cutting edge, have to deliver on the small details of implementation to build this foundation. Unfortunately, they have been failing far too often, leaving a widening implementation deficit. But this deficit is a reflection of a much more fundamental administrative capability deficit.
In fact, arguably the most important cause of our governance failures is deficient state capability. Worse still, far from improving, it appears to be in a state of continuous erosion. Across sectors, public systems just do not appear to have the capability to translate even well-conceived and laid out policies and agendas into the desired outcomes.
Harvard University professor Lant Pritchett describes many developing countries as being caught in a “capability trap”. In a recent co-authored paper, he argues that “state capability stagnates, or even deteriorates, over long periods of time despite governments remaining engaged in developmental rhetoric and continuing to receive development resources”. He uses several indicators to show that in most developing countries, including India, state capability has declined in the past decade.
These capability failures are everywhere. Our government schools are writ large with neglect and apathy. Teacher absence is rampant; learning levels are abysmal; toilets, wherever available, are mostly non-functional; and so on. In healthcare, doctor and nurse absenteeism is very high and the quality of primary care services unacceptable. Even when resources and personnel are made available, most large government hospitals remain very badly managed. In both sectors, well designed national programmes, with adequate implementation flexibility, have fallen far short of expectation when subjected to the field test of implementation.
Inordinate delays in fixing a leaking pipeline or repairing potholes, leave alone laying new roads or drilling hand bores, and lethargy in lifting piled up garbage are familiar frustrations to most Indians. The execution of small panchayat works, even when tendered out and money made available, takes months and even years.
In spite of very progressive and comprehensive legislations on social protection, atrocities against lower castes, children, and women continue unabated. Supervisory systems, even when not compromised, struggle to enforce regulations.
The glamorous sectors of modern India, infrastructure and urban facilities, too, are marred by the same malaise. A word cloud of our infrastructure sector is certain to prominently highlight “time over-run” and “cost escalation”. The recent large-scale electricity outages are a reminder of our inability to meet even modest capacity addition targets.
For sure, there are multiple reasons behind all these failures. Some of them go beyond the government and highlights underdeveloped markets, deficient private sector capacity, social problems, and so on. However, a common thread in all of them is an inability to translate policies and guidelines into effective action during implementation. In fact, even capable and well-intentioned public officials struggle to bridge the administrative capability deficit.
There are several reasons for the erosion in state capability. They include politicized and compromised bureaucracies, widespread corruption, weakened supervisory monitoring systems, staff indiscipline, decline in professional standards, and even over-burdened officials. Falling ethical standards and work culture and demotivated employees amplify the downward spiral. Public functionaries appear to have lost sight of their original mandate.
There is a dismal circularity to governance debates in India. Public systems are inefficient. So we need to promote private participation. But the platforms on which economic growth is built are, and will continue to be, mostly managed by governments. Therefore, instead of dismantling public systems, we need to focus on improving their capabilities. We need to significantly enhance the capability of administrative systems and its personnel to effectively deliver on their responsibilities.
Capable governments are indispensable for development. So the right question to ask is what can be done to improve state capability. Unfortunately, this is a super-difficult challenge to address to any degree of satisfaction. The best way to start would be acknowledge the problem and its underlying causes.
Gulzar Natarajan is a civil servant. These are his personal views.