Opinion | The outsider’s perspective and the wisdom of lateral hiring

There is a feeling among insiders in the government—bureaucrats and politicians—that outsiders give rather high-level (30,000 feet) advice and that it is mostly useless for policymakers and politicians. For the most part, it is true. For example, it is easy to say that India should do structural reforms, improve its banking system, make its labour market more flexible, improve the ease of doing business, reduce the cost of capital for businesses, keep inflation under check, make its agriculture viable and make its fiscal deficit sustainable. Some may add that India should do administrative reforms.

These are part of a list of desirables. They are not policy recommendations or policy proposals. They are mostly useless for those in the government because they would know these by reading any newspaper article.

But is it really possible for external advisers to get further and more specific than that? Yes, it is possible and some do. Let us take one example: Bringing the fiscal deficit down by raising revenue via selling of government-owned land is a recommendation that has already improved from being a mere wish for sound government finances.

Suggesting that the government makes medical education affordable is a desire. Proposing to the government that it changes its policy to let private hospitals append medical colleges is another example of a good policy proposal.

However, if someone wrote that the goods and services tax (GST) should be broad-based by including petroleum products so that the average GST rate could come down, that is an embarrassing recommendation. The amount of duty that petroleum products carry is so much that they would only increase the GST rate if their inclusion has to be revenue-neutral.

Coming up with policy proposals requires concern for the public, domain knowledge, thinking and homework. The absence of the last two leads to homilies being proposed to the government. But it may not be possible for an outsider to be able to provide answers to all the questions that would arise in the implementation of the proposal.

I can cite from my own example of being the dean of a business school. To improve the standing and ranking of the business school, one can say the school needs to raise the bar on the students admitted, ensure good placement for graduates so that good quality students aspire to join the school, hire good faculty with good standing and research output, enhance and update the courses and curriculum, and so on. These are platitudes and not recommendations.

For them to be taken seriously, proposers must propose answers to follow-up questions: How much and by when should the quality norms for admission be enhanced? What changes to bring to the curriculum? Which courses to add and which ones to drop and why? How to tie up with companies and recruiters? How to prepare students for good placement and which agency to hire for their grooming? Not all of the answers will be known or visible to an outside expert.

For an outsider to offer advice at the level of these specifics, they ought to have run a place like this before. Even then, they need to be inside to know which of these is most needed and which ones less so.

So, there is something to be said for former ministers and bureaucrats offering advice. There is a possibility that their advice would be precise, pointed and specific. But then, they will run the risk of being blamed for not having practised what they are preaching now.

Experts who have done it in other countries could come and assist. Drip irrigation in Israel could be transported to India, perhaps. Grooming and sustaining small and medium enterprises can be picked up from countries like Switzerland and Germany. But, even then, they have to be inside the system, understand it and then tailor their advice to the context.

Why, on “Ease of Doing Business”, practices from different states and cities from within the country could be propagated elsewhere. But to be able to do so, one has to be inside to know who has done what. There should be a mechanism for information sharing. There should also be political will.

Even if all these conditions are satisfied, it will be almost impossible for anyone from the outside the system to figure out how to create and ensure the right political economy incentives for governments to do the right things. Nor can one engineer ethics, morality and integrity from the outside. Thus, there are natural limits to the usefulness of expert recommendations from the outside.

The only way to bring in the freshness of a different perspective and at the same time ensure that this fresh perspective translates into implementable ideas is to have outsiders inside the system.

So, for outsiders to be taken seriously by insiders, outsiders have to become insiders. Lateral recruitment in droves is the way to go.

Finally, I do realize that this too is like an item in a wish list. Many more details remain to be fleshed out for this to be implemented and implementable in the first place.

These are the author's personal views.

V. Anantha Nageswaran is the dean of IFMR Graduate School of Business (KREA University)