Why does the Indian state both fail and succeed?

From the Journal of Economic Perspectives by Devesh Kapur:

The Indian state’s performance spans the spectrum from woefully inadequate, especially in core public goods provision, to surprisingly impressive in successfully managing complex tasks and on a massive scale. It has delivered better on macroeconomic rather than microeconomic outcomes, where delivery is episodic with inbuilt exit than where delivery and accountability are quotidian and more reliant on state capacity at local levels, and on those goods and services where societal norms on hierarchy and status matter less than where they are resilient. The paper highlights three reasons for these outcomes: under-resourced local governments, the long-term effects of India’s “precocious” democracy, and the persistence of social cleavage. However, claims that India’s state is bloated in size and submerged in patronage have weak basis. The paper concludes by highlighting a reversal of past trends in that state capacity is improving at the micro level even as India’s macro performance has become more worrisome.

The downside is well-known, here is the sometimes underappreciated upside:

But on the other side, the Indian state has a strong record in successfully managing complex tasks and on a massive scale. It has repeatedly conducted elections for hundreds of millions of voters—nearly 900 million in the 2019 general elections—without national disputes. In this decade, it has scaled up large programs such as Aadhaar, the world’s largest biometric ID program (which crossed one billion people enrolled within seven years of its launch). Most recently, it has implemented the integrated Goods and Services Tax (GST), one of the most ambitious tax reforms anywhere in recent times. India ranks low on its ability to enforce contracts, but its homicide rate has dropped markedly from 5.1 in 1990 to 3.2 (per 100,000) in 2016 (UNODC 2019).

And this:

Public health services in India leave much to be desired. Yet India achieved a remarkable public health milestone when it completed a full five years as a “ polio-free nation” on January 13, 2016. Even into the 1980s, tens of thousands of children were contacting polio each year. As late as 2009, India reported 741 polio cases, more than any other country in the world. It faced daunting challenges in eradicating polio: high population density and birth rate, poor sanitation, widespread diarrhea, inaccessible terrain, and the reluctance of a section of the population to accept the polio vaccine. The sheer scale of the effort, requiring 172 million children to be vaccinated twice each year, all within a day or two, with the assistance of about 2.5 million volunteers and 150,000 vaccine administration Why Does the Indian State Both Fail and Succeed? 39supervisors, required substantial state capacity in logistics and coordination. Again, the Indian state performed well in a “mission mode” activity that was highly temporally concentrated

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Because every state both fails and succeeds?

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Prestige projects can succeed even in countries which cannot even feed their population, for instance North Koreas missile program. These kind of projects are easy to monitor because they have clear goals and limited boundaries. The real test of a system is not whether it can deliver prestige projects but whether it makes ordinary lives better. India fails miserably on this, but I don’t know really why. Indians do very well outside India, they are hard working, and even in India extremely entrepreneurial. Corruption is surely part of it, but cannot be the only part.

Greg Cochran's take on North Korean missiles is that it shows what smarts can do even if you're poor and crazy. In contrast, wealthy Gulf countries could not create their own nukes even if they wanted to.
https://twitter.com/gcochran99/status/1209125780292128768

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North Korea started actively developing nuclear weapons in 1962 and only had some successful nuclear tests of small atomic bombs in the early 2000s. Taking more than 40 years to implement 50+ year old technology is not a great track record.

India's achievements seem more impressive.

I mentioned the missile program not the atomic bomb. And of course India is more effective than NK, it is a small barrier though.

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India has had 7% annual growth in per capita GDP this century. While not quite as good as Greece from 1950 to 1973 this is still very good. Life expectancy has risen from 41 in 1960 to 69 today. So not a miserable failure, ChrisA. It's one of the world's great success stories.

Yes recent growth is good, but why is India not at the same level of development say Sweden? It is far behind in every measurement that counts. I mean this as a serious question, I have never heard a satisfactory answer. As I said they have some bad corruption but I just cannot see why that would be such a drag. Colonial times were 70 years ago, surely that cannot be the reason. I do a fair amount of business in India and the people I deal with are all very competent and capable so I don’t go by the national IQ hypothesis either.

It's 3 orders of magnitude the size of Sweden.

sorry 2*

the point stands

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Also, far more diverse ethnically. India has what? 16 official languages.

Diversity is our strength

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ChrisA, Sweden started it's industrial revolution around 1870. Going by steel consumption, India didn't start it's industrial revolution until 1971. That's about it.

Crikey, surely this cannot be the answer, India has the benefits of 150 years of Industrial Revolution in other countries to use, they don’t have to reinvent the technology. And in fact if you went to India in 1970 you would see plenty of examples of modern tech like refineries, steel plants, planes, cars etc

It is the answer, or at least the best answer you're going to get. Being able to copy existing technology and techniques is why their per capita GDP has been increasing at 7% per year this century instead of the 1.5-1.6% Britain had during the first 60-70 years of the industrial revolution and around 3.1% afterwards.

If I went to India in the 1970 I would have seen airports and planes and cars but that was only a patina of wealth on a durian of poverty. It had as much relevance to the average Indian as the fact that Queen Elizabeth the first had pearls and silk had any bearing on the wealth of average 16th century English person.

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Like Justus and JonFraz says, it's almost a completely different entity than Sweden, comparing apples and tractors. It's like when people talk about things they do in Singapore and Iceland that the US should consider. There's no comparison.

India is unique, and their developmental challenges are many: huge population, massive bureaucracy, caste system, 16+ languages, difficult geography (so hot, and many parts lacking water), historical mistreatment, on and on.

They are doing pretty well all things considered. As Crikey points out, the massive increase in life expectancy really shows this.

why exactly is a caste system an issue? UK has the class system. US has the old boy network vs the others. They are fairly segregated as is an endogamous caste system; they also help in-group folks more than others and tries to keep others out.

This comment indicates a fundamental misunderstanding of how mobile the US society is, and a complete lack of thought into what the Indian Caste system looked like.

Also indicates lack of familiarity with European class issues.

Great handwave. Now get down to the "why" question.

Please keep in mind: any system that evolved has accreted the good and the bad and downright ugly and built in iniquities; https://en.wikipedia.org/wiki/Wikipedia:Chesterton%27s_fence

Consider race in US if not caste.

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Completely agree.

With Crikey.

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A confident election system, a national ID program, and a GST aren't prestige projects but necessary to a modern functioning state. If you want to harp on their space program (lunar missions!) or their military research (supersonic missiles!) then that's fair game but even then they are able to achieve rather impressive results on a shoestring budget. ISRO's entire budget is less than the up and down swings of Tesla's stock. India's strategy toward building semiconductors in house using RISC-V (Shakti) looks promising as well. India's UPI payment system allows you to send money fee-free without a bank account using your email/mobile/ID. The US still laughably uses paper checks that takes days(!) to clear and charges a fee for everything else.

India's number one problem is their crusty, hierarchical work culture. The manager/employee relationship is a master/slave one which unfortunately does not provide the best opportunity to top talent. This broken culture manifests in corruption everywhere because your skills are honed to just schmooze and playing games so if all you have is a hammer ....

(((((India's number one problem is their crusty, hierarchical work culture. The manager/employee relationship is a master/slave one which unfortunately does not provide the best opportunity to top talent. This broken culture manifests in corruption everywhere because your skills are honed to just schmooze and playing games so if all you have is a hammer ....)))))
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The extreme hierarchy (between manager/employee) issue is real. I agree. But this will gradually dissipate, go away as more competition emerges on the scene. When I say competition I mean more alternatives to employees to choose from.

While the hierarchy problem is real - I am not sure that it is a major cause of poor performance of the organizations (in India). The master slave relationship may also lead to reduced number of layers between the top (CEO) to the bottom (Individual contributors).

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State just doesn't really have very much money sounds like a simple answer. Or is India's state thought to be markedly less effective than others when they had/have equivalent funding base?

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From the Index of Economic Freedom:

“India is developing into an open-market economy, but traces of its past autarkic policies remain. Economic liberalization measures that began in the early 1990s, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, have accelerated growth. Corruption, underdeveloped infrastructure, a restrictive and burdensome regulatory environment, and poor financial and budget management continue to undermine overall development.”

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In New Delhi, they are chanting "shoot the traitors" and on social media you can find videos of somebody actually do just that. He waves his piece in full view of the police who do nothing until he actually fires a round into the crowd of protestors. Makes chants of "lock her up" or even racist tiki torch marches look quaint. There's something much deeper here than just economic growth and without addressing it we will retrace the steps of the last century's World Wars. Man does not live on bread alone. Nationalism is quickly filling that void that markets do not address.

https://www.nytimes.com/2020/02/11/world/asia/delhi-election-modi.html

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That's correct. Rain falls on the just and the unjust.

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"It has repeatedly conducted elections for hundreds of millions of voters—nearly 900 million in the 2019 general elections—without national disputes. "

To India's credit, they do a better job than Iowans who have a couple orders of magnitude less voters.

To be fair, it's "...without national disputes -- ever since the shockingly homicidal ethno-religious sorting."

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Polio? That's so 20th century. Coronavirus is where's its at.

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India, it seems from the blog post, is good at counting stuff, but not so good at building stuff. Maybe that's why there are so many economists from India. And physicians. By comparison, Americans have been good at building stuff, but not so good at counting stuff. However, today, with the best young talent drawn to tech, America has shifted to counting stuff; thus, Thiel's dictum: “We wanted flying cars, instead we got 140 characters.”

They are still in beta, but they exist. They were shown at the Las Vegas tech expo recently. They look like big drones.

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India's widespread diarrhea problem is caused by their very, very spicy food. Has anyone eaten Indian food? It is like fire. How a billion Gandhis can eat like that is beyond me.

Thanks for the relief. Comic, I meant. Very much.

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Is the executions in Central Park theme becoming a new running joke here?

I think many people are worried because we are sailing uncharted waters right now. Never before a communist agitator managed to become America's president.

Isn't the future always uncharted? Assuming you're not into astrology.

Sure. But there are known knows, known unknowns and unknown unknowns. A communist being elected president of the USA is unprecedent.

Just googled Bernie Sanders. He's in favor of a minimum wage similar to Australia's -- a country that is significantly less rich than the USA -- and less regressive taxation. I normally would recommend a Holiday in Cambodia as a cure for your condition, but that's probably not going to work these days.

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According to experts, Senators Sanders might already have won: https://www.nytimes.com/2020/02/12/opinion/bernie-sanders-campaign.html?action=click&module=Opinion&pgtype=Homepage [NYT].

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My hypothesis is the paucity of good managers in the Indian bureaucracy. This means that the good ones get assigned to the prestigious projects and these projects get delivered.

In other areas, you are left with the vast bulk of bad managers (including c.50% of affirmative action candidates)

The best Indian managers go into the spectacular Indian motion picture industry.

Yes Indian movies are often focused on spectacle. But like American movies most are crap.

I disagree that American movies are crap. Some of them are crap. Yes.
I agree that many (not most) Indian movies are crap because they love to show that poor people are faultless and rich people are evil. I am yet to see an Indian movie (with socio-economic theme) in which the blame has been put squarely on poor people. Of course the movie-producer has to make money and hence he tries to show that poor people are great and faultless.

India's main problem is the worthless pieces of shit called "poor people".

Remember how back in the 40s the American movie It's a Wonderful Life left us with the beautiful message that the poor are vermin and deserve to be exterminated. Who doesn't love the scene at the end where father and son bond over spitting on and then burning images of Jesus the Traitor in a bonfire? It's what our nation was built on.

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((( The real test of a system is not whether it can deliver prestige projects but whether it makes ordinary lives better. India fails miserably on this, but I don’t know really why. Indians do very well outside India, they are hard working, and even in India extremely entrepreneurial. Corruption is surely part of it, but cannot be the only part.)))
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India does poorly mainly because everyone in India is out to absolve the worthless pieces of sh*t (aka poor people) of all their shortcomings and faults.

Nobody (in India) dares to even think (let alone - say out loud) that poor people suck at most things.

Good trolling!

But that begs this serious question: what's the cause & effect? being poor leads to suckitude? or suckitude led them to be poor? and lather rinse repeat vicious cycle.

Suggest you to read "economic lives of poor" by Abhijeet Banerjee.
The cause is moral hazard and effect is suckitude.
Moral hazard is caused by almost everyone decisively bailing the poor out all the time. Nobody criticizes the poor.

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