Is India a “Flailing State”? – Excerpts

Dear All, I am reproducing below some excerpts from a fascinating article that was forwarded to me last week by Sachin. It is deeply thought-provoking and raises a number of disturbing questions…

Please read and comment…The original article in full is here

*** CAUTION: Long Post ***

*** Excerpts from “Is India a Flailing State?” by Lant Pritchett ***

…The novel (Q&A on which Slumdog Millionaire is based, by Vikas Swarup) opens with the hero having won the game  show but is being beaten by the police in a Mumbai police station as the producer of the game show, short on cash, has decided to pay-off the police to extract a false confession of cheating by the contestant rather than pay out the winnings. This is not remarked upon as unusual.

As one reads the novel in each instance in which the hero’s life intersects with agents of the government—he is treated with the same mix of venality and casual brutality. This is especially striking for two reasons. First, the bad behavior of the government is not a theme of the book nor is it ever remarked upon, rather these descriptions are there to provide verisimilitude of a real person’s life—to make the book seem realistic and in-touch with the “true” India. Second, the novel was written, not an estranged radical, but by an active duty member of the Indian Foreign Service.

…To understand the Indian state today one has to read fiction because non-fiction, the streams of government reports and commissions and documents produced by official agencies (including of those foreign agencies working with the government) are truly fiction.

Because of the incredibly spectacular intelligence, cleverness, and competence of the top tiers of the Indian government—in particular the national services such as the Indian Administrative Service—it has managed to project the myth that India is just another regular modern state, with a growing economy, a democratic politics, a functional civil service, and making progress on social issues.

India today is a fascinating mix. The economy is booming. India’s democracy, by any measure, continues to astound, as despite all kinds of pressures, free and fair elections are held and control of the government changes hands regularly.
…The Indian Supreme Court, the Indian Institutes of Technology, the All India Institute of Medical Sciences (AIIMS), India’s nuclear program, to name a few, are all world class institutions. The IAS is full of officers who have passed an entrance examination and selection process that makes getting into Harvard look like a walk in the park.

How does one reconcile the contradictions of a booming economy and democracy with world class elite institutions and yet chaotic conditions in service provision of the even the most rudimentary types?

I argue that India is today a flailing state—a nation-state in which the head, that is the elite institutions at the national (and in some states) level remain sound and functional but that this head is no longer reliably connected via nerves and sinews to its own limbs.

In many parts of India in many sectors, the everyday actions of the field level agents of the state—policemen, engineers, teachers, health workers—are increasingly beyond the control of the administration at the national or state level.

…The first section outlines the four-fold structure of the transitions to modernization and suggests the term “flailing” state for those for which a primary failure is in administration. The second section gives evidence from a variety of sectors as to why India can be said to be a flailing state—with examples from a variety of publicly provided services: education, health, transfer programs, driver’s licenses. The third section, the most speculative, presents conjectures about the underlying causes of the failures of administrative modernization to date and what the future might hold, in this section we return to some considerations of how society, state, and economy inter-link.

…Before I venture into this territory let me just issue three big caveats. First, much of what I am going to say is the kind of broad-brush descriptions that are entirely out of fashion, for many good reasons, with historians and social scientists. I am well aware that to every generalization I make there are a host of exceptions, divergences, and, one might say, counter-narratives.

…a “failing” state means one that has failed relative to the expectations of the path expected under modernization, but is not to be interpreted normatively.

…The fascinating aspect (in the context of Index of Failed States) is that, while it (India) scores far above its neighbors in measures of democracy or human rights or absence of conflict—it does not outperform them in measures of human development outcomes and is side by side in measures of governmental effectiveness or (negatively) on corruption.
…
A final way of posing the difference between a failing state in an economic or political dimension and a flailing state is to compare India to other countries with similar track records on democracy in their performance in controlling corruption.
…
While one doesn’t want to place too much weight on any given cross-national comparison, and one can quibble endlessly over whether the broad concepts lie “democracy” and “corruption” can be precisely measured, there are a couple of items on which there is clarity.

First, India is not a failing state. It is not failing economically. It is not failing to maintain the basics of law and order and security—with some (worrisome and growing) exceptions with Naxalite areas and movements on the edges of India—the state actively maintains order.

It is certainly not failing to maintain democracy, while there are certainly pockets of trouble, by and large India has maintains all of the features of a modern democratic polity: electoral democracy, an active parliament with constraints on the executive, respect for human rights, a free press, an independent judiciary.

But it is equally clear that India is not an entirely successful state either—its performance in basic services lags even compared to its region.

I propose to label the inability to maintain sufficient control of the administrative apparatus in order to effectively deliver services through the government in spite of democracy and strong capability at the state level a “flailing” state.

Section II:  The Weakness of Administrative Modernism

…The essence of administrative modernism is that civil service agents of the state carry out their prescribed functions according to the organizational processes and procedures and irrespective of politics, personal characteristics, or pecuniary motivations. This, while certainly it happens, has ceased to be the norm in large parts of India in which the civil service, from top to bottom has been politicized, personalized, and corrupted.

I could give dozens of examples, including from government reports.
…I will focus on three relatively recent studies that have examined particular aspects of the flailing state:

II.a) Attendance of nurses in Rajasthan
80 percent of success is just showing up – Woody Allen
A group of academics have been working with Seva Mandir, a local NGO active
in Rajasthan, to define and examine…innovations that would benefit the poorer rural population of Rajasthan. Their initial investigations …and a extended careful tracking study of the attendance of the medical staff at local level facilities confirmed what earlier studies had shown…that attendance on any given day was only around one-half.
That is, one half of the staff appointed and being paid to run these facilities were present during the facilities stated hours of operation.

To address this problem of staff absenteeism the NGO worked with the government to devise a scheme to improve attendance…

…in spite of the additional observation, in spite of the incentives, in spite of  the monitoring…by July of 2007 the presence rates on the monitored days were almost exactly the same—both around one-third.

The comedian Woody Allen once quipped that 80 percent of life is just showing up. When workers do not even show up this is an indication of a serious inability of the administrative system to control the behavior of government employees—how can it induce the correct behavior in the job when they cannot even assure attendance.

Feasible attendance rates (given illness, other duties, emergencies, etc.) are almost certainly more than 90 percent. If absence rates are above 10 percent an organization has a management problem, if they are more than 15 percent it has a management crisis. But when one-half to two-third of workers do not show up—that reflects not the management of a particular school or district or agency, but rather a more severe system crisis.

And when these attendance rates are impervious to well-designed attempts to raise them this suggests the systemic issues run deeper than merely organizational or incentive design6.

II.c) Driver’s Licenses in Delhi
For my friends, anything; for my enemies, the law – Oscar Benevides, President of Peru, 1933-1940
A third recent study also uses the method of a controlled experiment, this time in obtaining a driver’s license in Delhi to get more insight into the organization and consequences of corruption of routine administrative tasks.

Some of the most important results of the study come from just examining the comparison group, although these results confirm what any resident of Delhi intuitively knows. First, even in the comparison group that had no bonus for rapid acquisition of a license many hired an agent to facilitate the process.

The primary response of those who failed the exam was not, as you might guess to receive more driving instruction but rather, in the next round of application, hire an agent (which, one suspects, was the point of failing them).

…The importance of this study is not documenting the existence of corruption in obtaining a driver’s license (which is obvious to anyone who has a driver’s license) but rather three features of that corruption. First, it is fully institutionalized. Almost no one reported paying bribes directly to the public sector employee; rather they paid fees to intermediaries. This suggests that the corruption is highly organized

…Third, it does appear that this subversion of assessments of driving competence does allow unqualified drivers onto the road. The corruption does not merely accelerate outcomes but changes them.

While these are isolated examples drawn from limited activities and places, they are consistent with the cross-national evidence, the nation-wide evidence on absenteeism, data on corruption and leakage, and surveys of citizen satisfaction…and with everyday experience of Indians9 (and, not coincidentally, modern fiction).

Section III:   Looking to the Future

…the government, at every level, is today not adequately equipped… to meet the aspirations of the people. To be able to do so, we require the reform of government and of public institutions … No objective in this development agenda can be met if we do not reform the instrument in our hand with which we have to work, namely the government and public institutions. Prime Minister Manmohan Singh, June 24, 2004

…Robert Solow also taught me that “just because the tire is flat does not mean the hole is on the bottom.”

There is little question that, while the symptoms are manifest in administrative failure, this does not mean administrative reform is the cure.

The next two subsections speculate on the root causes (especially as compared to China) and possible future trajectory.

III.a) Roots of the failure of administrative modernism
There is a substantial body of thought in India today that believes that it is the way in which democracy has evolved in India that has undermined, rather than strengthened, administrative modernism in India. Naresh Saxena, a former IAS officer who served in Uttar Pradesh, penned a note for the National Advisory Council at the time of the newly elected government (in 2004) that is breath-taking in its hard hitting honesty about the current state of affairs (particularly in North India)…

As he says:

The political system in many states is accountable not to the people but to those who are behind the MLA; these are often contractors, mafia, corrupt bureaucrats, and manipulators who have made money through using the political system and hence are interested in the continuation of the chaos—and patronage based administration.
…between the expression of the will of the state…and the execution of its will…there cannot be any long-term dichotomy. In other words, the model in which the politics will continue to be corrupt, casteist and will harbor criminals where as civil servants will continue to be efficient, responsive to public needs and change agents cannot be sustained indefinitely. In the long-run political and administrative values have to coincide.

In this view, the long-term dynamic of a steady deterioration of the Congress Party’s role as an “encompassing interest” and institutionalized political aggregator…the rise of regional parties, and especially the rise of caste based parties have resulted in a politics that is detached from delivering the broad based benefits to citizens and more focused on jobs and contracts for their supporters and actively leads to a deterioration in administrative functioning10.

But as Pratap Bhanu Mehta has pointed out in his insightful essay, The Burden of Democracy, the simplistic attribution of the problem to bad politicians begs the question, as those willing to take the role of bad politicians are in abundant supply in every country. Rather, one must seek the root cause of the ability of bad politicians to survive and thrive in a very competitive electoral environment.

…Perhaps the root issue with the flailing of administrative modernism in India today is the as yet unresolved (especially in the North) issues of identity politics around caste and communitarian concerns12. Up to a point, politicians have been able to survive on creating identities around caste and religion claiming to deliver social justice by the very fact of their election. That is, that someone of their group holds high office in and of itself provides social legitimacy to a group’s claims to fully equal participation in the social and political sphere.

…For groups for whom the election of politicians who shared their identity represented a public symbol of their own personal and identity claims to equal treatment in the social and political sphere at the local level, attacks on these politicians for a lack of effectiveness or corruption could be seen as, at best, missing the larger social point and at worst, as a retrograde attempt of the forces of the elite to “keep them in their place.”

…Recent research examined the transcripts of the Gram Sabha (local village council) meetings that are intended to discuss and ratify various issues. The bulk of the discourse did not involve appeals to a common public weal or shared understanding derived from discourse but rather identify based claims (Ban and Rao 2008, Rao and Sanyal 2009). .

III.b) Consequences and relation to the economy
One question that naturally arises is, if indeed, India is a flailing state, how is it that its economy has managed to grow so fast for so long?
… But three comments of the relationship with a “flailing state” are possible.

First, India, while it is has grown very rapidly is still at very low absolute levels (roughly a third the PPP income of a middle income country like Mexico for instance) – so while it may take higher levels of government/state capability to reach middle income status, it is not impossible to grow from very low levels of income even with very weak governance.

Many of the reforms undertaken over the last decades were “administrative capability saving” reforms in which the state simply stopped trying to do what it was flailing to do anyway.

Second, on the level of proximate causes of economic growth, it is arithmetically capital(s) accumulation, the efficacy of that capital, and growth in overall productivity that account for growth. India has managed to maintain high levels of savings and
Investment…

And, many of the post 1991 reform actions have (meant that)…efficacy of the state is less of a concern.

Third, the relative weakness of the Indian state in implementation capability has also affected the pattern of economic growth.
The growth of the outsourcing industry is an obvious case in point. It is not that this industry was not affected by the government policy, it was that thrived on the things the government did well (e.g. the elite IIT graduates) and essentially cocooned itself from reliance on any government provided infrastructure services.

III.C) Future
If this view, that the failure, so far, of the forms of political and administrative modernism to deliver the benefits of effective government is the result of unresolved issues of social identity that are playing out in the political and administrative spheres, is correct, what of the future? Is it bright or dim?

…India…inherited its basic administrative structures wholesale from a colonial period in which the primary purposes of the administration machinery were not particularly developmental or service provision but maintaining order and extraction of revenues.

Existing initiatives.

India does not suffer from a dearth of proposals or initiatives for administrative reform nor from a lack of commissions (including of course an Administrative Reform commission). Nor even does it suffer from a lack of successful initiatives. Vikram Chand (2006) has documented more than a dozen case studies of successful initiatives in service delivery. However, the key question is why, if there is not dearth of initiatives, or even successes, things are not getting better at a more rapid pace.
There are three generic issues that face the political economy of administrative reform.
First, a number of successful initiatives are the result of senior and powerful civil servants creating (or being given) political support and space to act as “reform champions” or “change agents.”

…However, these reforms often prove fragile as they do not have a solid either popular base nor broad political buy-in.

…If the reform death rate and birth rate are similar then there will always be a stream of reforms, but no forward progress. As long as the reforms are dependent on a particular civil servant (rather than politicians, who even with anti-incumbency bias sometimes have a longer and more protected tenure in office) it is difficult for the reform to take hold.

A second problem is that existing initiatives are always up against the powers behind the existing dysfunctions—whether it be the institutionalization of corruption, the patronage protection of civil servants or the contractors and their allies.

…When dysfunction has settled in, then there are settled expectations about future flows, which are often capitalized

…at this stage, many positions, both political and civil service appointments are effectively auctioned off. The prices paid for positions depend on the anticipated take. Hence reforms that attempt to reduce the benefit of a position can be seen as taking away an asset they had purchased. This will be naturally be strongly resisted. How to dig one’s way out of corruption that been “capitalized” and is semi-openly traded is a very difficult problem to which, to my knowledge, there is no research at all.
A final difficulty with mobilizing reform is that, in response to governmental dysfunction, people adopt coping mechanisms to provide the services in alternative ways.

…Municipal water services have deteriorated in most Indian cities to the point that, even for those who have connections for piped water, the pipes are only pressurized for a few hours a day. In response to this, houses in the richer neighborhoods of Delhi have invested in an array of ways of coping—private wells, cisterns, storage tanks on the roof, etc. Once these expenditures are incurred, households do have 24/7 pressurized water inside their house.

A recent study in Delhi showed that, in richer neighborhoods households spent more privately on water alternatives than their payments to the water corporation. Suppose now there is an initiative for reform that promises better service, say 24/7 water, but at higher than current cost (but lower than total public plus private coping expenditures). Do you support this? Probably not as the costs (higher bills) are immediate and the benefits are uncertain (what if the reform doesn’t work)…

These dynamics can lead into tipping point dynamics into a political vicious circle, beyond which one cannot assemble a majority (particularly a political power weighted majority) for reform because the threshold at which the typical household benefits is far from the realistic potential of reform improvement. This is already almost certainly true of ambulatory curative care (85 percent of visits private) and urban private schooling (in many states two thirds or more of children are in private schools).

…In sector after sector the response to continued administrative flailing has been the exit into alternative service delivery modes: private schools for government, from surface irrigation to groundwater, from water utilities to water vendors, from public clinics to private clinics.

The combination of rising incomes and in some cases technological shifts (e.g. telephony, satellite TV) have allowed India’s elite an easy exit option, at least until a crisis hits.

The role of ideas. While certainly entrenched interests are an obstacle to reform, perhaps the power and role of ideas should not be ignored. As Keynes argued, in the long run they may well be all that matter15. However, in this respect the role of ideas is itself something of a puzzle. It is difficult to summarize the intellectual zeitgeist of any country, particular one as complex as India, but the issues of government dysfunction seem to attract much less attention that one might expect given the otherwise vociferous and hugely “argumentative” (as Amartya Sen would have it) intellectual life in India.

The obvious and blatant facts of life to these same intellectuals: that their children were in private school, they used private health facilities, used agents for necessary interactions with the government, avoided the police (or paid bribes when stopped), relied on private coping mechanisms for water—that is, coped with state dysfunction as best they could—never seemed to penetrate from the private sphere into debates about public policy.

It seemed striking the extent to which advocacy of the “disadvantaged sections” nearly automatically translated into criticism of the market and advocacy of greater government action—even when the flailing incapability of the “business as usual” actions of the state has been amply documented.16

The risk is that the “right” settles into a “expect nothing, get nothing, try and pay nothing” alienation from all politics and the left continues as if the India, unreformed, could solve all ills if only sufficient resources were devoted to the social problems, neither approach appears capable of generating the ideas base for a transformational social movement.

…What this produces is a combination of different uncertainties at different horizons. In India, one is deeply uncertain about the near future (and even, for that matter, about what is really happening in the present). But, as India’s formal political and administrative institutions are roughly those of many advanced nations, one can imagine India 50 years in the future without having had any major institutional shifts but having made a long hard steady slog to prosperity and governmental efficacy so long-run uncertainty is less. In contrast, in China one is very confident about the present-what the government says will happen will, with some slips twixt cup and lip, happen. But transitions in authoritarian regimes have, in many instances, been very problematic, and accompanied both in Chinese history and in recent practice, led to long interruptions in both economic and social progress so the long-run future of China is especially uncertain.

*** End of Excerpts ***

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