Monday, April 09, 2007

What’s good for Bihar is good for India

A Stanford-India Mirror Conference took place in Patna this week. It was part of the state government’s programme of confronting the state’s challenges with an open mind to best practices from around the world. The conference brought together a team from the Stanford Center for International Development, members of the state government, researchers from area universities and think tanks, members of the global and local Indus Entrepreneurs (TiE) and other members of civil society, to discuss policy challenges for Bihar.

The focus was not so different than the kinds of general questions that policymakers in India have on their minds: what policies would accelerate inclusive growth? Nick Hope (Stanford) made a presentation on lessons from China, Anjini Kochar (Stanford) on education policies, Ward Hanson (Stanford) on IT and growth, TN Srinivasan (Stanford) on employment generation as well as centre-state relations and AN Sharma and Pinaki Joddar on povert. We spoke on public private partnerships and investment climate.

The Chief Minister of Bihar summarised the reform and legislative initiatives over the last 15 months, and laid out his vision for the coming years. The deputy CM, ministers of HRD, RCD, energy, rural development, science and technology, apart from the chief secretary and commissioners of HRD and finance, among others, provided insights into Bihar’s current strategies. Ramesh Yadava, a charter member of Silicon Valley TiE, also brought out the importance of accelerating the pace of implementation of the multiple commitments made in its recently launched Approach Paper to the XIth Plan. The theme running through all sessions: given the pressing needs, administrative challenges, and constrained financial and human resources in comparison with the task at hand, what steps deserve priority?

Some consensus did emerge:

Learn from others’ experience.

There’s no need to re-invent the wheel in all cases. The world is full of relevant experiences, both successes and failures, to learn from. On SEZs, for example, much of the debate has focused on comparing India and China’s fiscal policies. Nick Hope brought out the importance of an exit policy to wind up any special preferences once their purpose is over.

Given the many pressing needs, administrative challenges, and constrained financial and human resources in comparison with the task at hand, what steps deserve priority?

But tailor this experience to local conditions.

Nick Hope’s presentation on China’s development strategy raised a number of suggestions that would need to be tempered to suit India’s democratic setting. China’s differential treatment of coastal and interior provinces, for example, would not be feasible here as a way to focus resources. Our session on mobilising investment discussed an adaptation of the strategy focus on enabling ‘infrastructure clusters’ like office parks, small-store retail malls, or time-share equipment shops that any citizen with an entrepreneurial bent could access, no matter how small the enterprise. These could balance the benefits of focus with the need to avoid shutting any group out of development at first.

And take advantage of India’s conditions.

Democracy might look like a ‘constraint’ when policies fail to reach consensus, vested interests block reforms, or people occupy land intended for a power plant. But it is actually an advantage in other ways. The freedom to protest provides information about preferences and needs. Confidence in challenging government policies also lets citizens act as monitors of service quality better than if they were subdued by authority. Active community groups, a byproduct of an open society, could complement governments in providing infrastructure and services.

Take unintended consequences into account.

Anjini Kochar’s presentation on education pointed out that education policies’ focus on creating access to education by localising the school system seems to also have affected the level and variance in quality. Schools designed to serve small localities effectively become segregated when there is residential clustering. Localisation also means that school size is determined by population density more than efficiency. In the end, Professor Kochar recommended an adjustment of the policy to take these multiple dimensions into account: place pre-schools in localities to draw people into the system, but then aggregate students to the efficient scale for higher grades.

Leverage technologies to create change.

India’s development efforts, especially its rural policies, are taking place in an era where ICT can (in theory) mean the ‘death of distance’. The challenge: to develop the content to be diffused through this network and ensure greater access. We discussed in our session the need to create an open-access rural Internet backbone to support government programmes (like agricultural extension) as well as any other applications and services that private entrepreneurs can dream up.

Rework institutions to enable change.

Sessions looked at not only the state’s institutions, but also the state’s institutional context. TN Srinivasan emphasised the importance of rationalising intergovernmental transfers, reconsidering the role of the Planning Commission and restructuring the mechanism for Centre-state relations.

In the end, implement.

Policy pronouncements are just words and aims. Changing outcomes takes concerted actions, coordinated by pragmatic strategies. In all of these areas, Bihar is not alone or unique in India. What is good for Bihar could also be good for India.

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