A Modest Proposal for Making India 100 Percent Literate within Three Years

In yesterday’s musings on whether education promotes development, I had promised to outline a proposal for making India 100 percent literate within three years. Here is the modest proposal. Continue reading “A Modest Proposal for Making India 100 Percent Literate within Three Years”

Does Educational Spending Promote Growth?

Back in February I had examined the matter of why education is underprovided in India. My insistence that basic education was a necessity for development prompted Alok Mittal to ask about the connection between economic development and education. Continue reading “Does Educational Spending Promote Growth?”

Misplaced Conclusions

“My uncle died sadly due to his habit of drinking tea?”

“That’s amazing! I have heard of people dieing because of alcohol. But tea?”

“Yes, tea lead to his death. He was crossing the road to get himself a cup of tea, and a bus ran over him. Tea caused his untimely demise.”

You may think it’s funny. But wait till you see the conclusion drawn from the following. This is from a report by my friend Priya Ganapati of rediff.com:

Jhunjhunwala cites a case where an email was sent to a number of government officials including the chief minister about a possible breakout of the small pox epidemic in a certain area.

Though the email was ignored by many, it finally did reach the right official and prompt administrative action to prevent the epidemic was taken.

“In Attapatti village, Veermani, a man with disabilities was unjustly dismissed from his job. He wrote an email to many government officials, one of whom finally took note and he was reinstated,” Jhunjhunwala points out.

You may not believe it but one is supposed to be persuaded that the above examples argue for IT-enabling of Indian villages. A moment’s consideration is all that is required to see that the conclusion is as asinine as blaming tea for the uncle’s release from this mortal coil.

If you substitute postcard for “email” in Priya’s report, then obviously the conclusion would have to be that what is required for rural development is a postal system. But wait!! We do have a postal system, don’t we? So what exactly does an email do that a postcard does not do?

Someone should clue these people in: emails and postcards are the means of conveying a message. Emails don’t suddenly make caring people out of apathetic government bureaucrats. The failures of government is not a technological failure and producing technical fixes for that is as effective as casting spells to fix a broken car.

One may say, “Well, emails are faster. And you can send it to a zillion officials.” Sure, you can. But so when everyone and his brother is sending a zillion messages to thousands of officials, the officials will also learn to file those emails under “T” for trash. You would be back to square one with the only difference being that money that could have helped with development ends up in the pockets of Bill Gates, HP, and Intel.

The bottom line is very simple. We need to ask where the failure is in the above examples. Then figure out a solution. And if in that solution we find that the use of IT tools is cheaper than any other method, we should use IT tools. Until then, all who are IT-trigger happy should sit on their hands and contemplate the universe.

{Deja vu? Indeed, this one is recycled 🙂 }

The Power of M-type Arguments

Suhit Anantula forwarded an open letter to Krugman from Arnold Kling. In it, Kling told Krugman that he (Krugman) was using too many M type arguments (M for “motivation”) and not enough C type arguments (C for “consequence”) when Krugman argues for or against certain policies. I think that Kling’s letter is worth reading. And I believe that Kling is mistaken.

Kling takes Krugman to task saying that he should eschew M arguments and concentrate on C arguments to make his point. Economists, Kling claims, have always employed C arguments to evaluate public policies and that is what Krugman should stick to.

Here is what I believe. Public policies are made by humans. Humans are motivated by self-interest. It is therefore important to understand the motivations of the humans involved in policy making to comprehend why a certain policy was advocated. In most cases, the consequences of a policy are not completely known a priori and there is considerable uncertainty in the actual outcome of a policy. Depending upon the motivation of the policy maker, the policy maker has the freedom to claim that a particular consequence would necessarily follow. By identifying the motivation of the policy maker, one can control for the biases in the claimed benefits of the policy.

My position is not that C arguments are worthless when evaluating policies. It is rather that C arguments are not sufficient when it comes to understanding why a certain course of action is actually taken from a menu of choices.

To take a specific example, consider the so-called US “war on terror”. Suppose one were to make the C argument that “invading Iraq would not stop terrorism, but instead would intensify terrorism by inducing more Islamic terrorism.” Would that argument be sufficient to deter those advocating the invasion of Iraq? It would be if those people were indeed ignorant of the possibility of inducing more Islamic terrorism and having heard the C argument, would change their minds. But those who pushed for the invasion of Iraq are not stupid. They would have already worked out C argument for themselves, anyway. Yet, if inspite of understanding the consequences of their chosen policy, they still go ahead of with the invasion of Iraq, then one has to ask what their motivations are for doing so. If one finds that the benefits of an invasion (to the policy makers) is greater than the cost of the war (which the policy makers do not bear), then one can explain comprehensively why the invasion was undertaken.

In a purely academic environment, debating the pros and cons of a specific policy is best undertaken with C arguments. But in the real world, people are motivated by self-interest and have a certain amount of control over what course of action to take, rather than being dispassionate observers of a world that they don’t have any control over.

A diverse set of issues — from why the Bush administration invaded Iraq, to why worthless expensive PCs are foisted on poor rural Indians — can be better understood by the simple device of following the money and asking what is in it for the advocates of a particular policy and how it benefits them.

Why, oh why, are they so materialistic?

Prashant has raised a very interesting point. And one of the more important statements he makes is “… several religions of the world preach that material belongings are unimportant.”
Continue reading “Why, oh why, are they so materialistic?”

You might be a third-world country if …

I have been writing this blog for a year. I have learnt a bit and I hope that it was not a waste a time for those who visit it occassionally. About 100 unique visitors show up every day on the average, and every day a few write in with comments or an email to me. Thank you all.

On reviewing the archives, I note a glaring omission. The blog needs some humor. Sure the topic is extremely serious. But one can definitely make a serious point with humor. So I want to add a bit of humor occassionally.
Continue reading “You might be a third-world country if …”

The Power of Incentives

It is said that one should not ascribe to malice what can be adequately explained as stupidity. I would go one step further and say that one should not ascribe to malice or stupidity what can be explained by basic self-interest. In other words, the power of incentives. Incentives matter and just like you can explain all sorts of natural phenomena by understanding the law of gravitation, you can explain all sorts of diverse economic puzzles by asking what are the incentives.

Consider this. BBC News on Sept 3rd 2004 carried an item: Solar plan for Indian computers. Some excerpts:

Authorities in the Indian state of Uttar Pradesh have drawn up a pilot project to use solar power to run computers in village schools…

Many have to use kerosene lamps for light and most government-run primary schools have no power at all.

It is hoped the plan will help schools cope with the rural power crisis.

Last year, the Uttar Pradesh Education for All Project Board bought about 1,000 computers for selected primary schools in all 70 districts.

The schools were selected in villages which had no power lines, and teachers were given special training for computer-aided education.

Consider the typical village school in UP: totally strapped for resources, teacher absent most of the year, perhaps not even a blackboard, students unable to afford books and most likely malnourished. Why, one asks incredulously, would anyone be spending money on computers when there are more important needs that are crying out for resources?

The report goes on to say:

A further 1,000 computers are to be purchased this year for village schools, but most of these will not work because there is no power available.

The mind boggles at the waste of resources which a poor state can ill-afford. Funds for rural public education are severely limited and yet they are wasting it buying computers that will serve no apparent purpose. These funds could have been used more effectively in paying teachers living wages, buying supplies such as books and blackboards, perhaps food for the starving students. Why?

Here is my explanation. Some time ago, I had pondered the question of why telephones, radio, and TVs don’t make the conference circuit. The vendors of PCs have an incentive to push their wares and they are a powerful lobby. Couple that with the avarice and corruption of the “authorities” mentioned in the BBC report, and you have the answer. When tens of millions of rupees are spent in bulk purchases of computers, there are kickbacks. The authorities make their pile, never mind that the computers end up being expensive non-functional display items in the villages without power.

But wait, it gets better. No power for computers? No problem: use expensive solar power to power them. And you will find the vendors of solar power panels eagerly getting into the game of rural development. They make hay while the sun shines.

It is disgusting, all things considered. Last Friday I made the mistake of driving about 10 kms on Mumbai roads. It took an hour and a half. We were stuck at a T-junction for about 20 minutes because of a deadlock. Vehicles had moved into the intersection and there was no way any vehicle could move. I had described a similar situation earlier in a post entitled Seduced by ICT:

Recently I came across a news item which said that they are looking at solving Mumbai’s traffic problems by making Mumbai roads “electronic intelligent roads.” I don’t have the slightest doubt that it would involve huge outlays to the tune of millions of dollars and lots of people will make lots of money up and down the line providing expertise and hardware and software for this hi-tech venture. I am also convinced that it will not make the slightest effect on the congested Mumbai roads because it is not the roads that need the intelligence but the people designing the roads that need to be intelligent.

Close to where I live in Kandivali, a suburb in North Mumbai, there is an intersection that is almost always caught in a grid-lock. The intersection is like an “H” with bi-direction flow of traffic along all the sections and it has one traffic signal at one of the points where the horizontal section meets the vertical sections. Traffic gets log-jammed around 300 meters of this intersection and it takes about a half hour to cross this bit every evening. Hundreds of autorickshaws, buses, cars, trucks, two-wheelers, and whatnots spew exhaust fumes and honk continually and people suffer. It is astonishing that the traffic people have not figured out that the simplest thing to do would be to paint some part of this intersection with the “KEEP CLEAR — DO NOT BLOCK” sections and put a couple of traffic cops to teach the people to keep off these sections. It would be a simple effective system which would cost very little compared to the enormous price that everyone pays throughout the day due to the congestion.

Instead, the Mumbai municipal corporation is investigating ways of using electronics. Why not better road markings and so on? Because there is not much money involved in a simpler but more effective system. Simpler may be better but there is not much profit in it. A blackboard, a teacher, and a dozen slates and some chalk may be simpler and better for adult education, but there is not as much profit as in putting PCs with literacy programs to teach adults how to read in rural areas.

That is all there is to it. Expensive solutions are proposed because those in control of the spending benefit. This is a universal phenomena, not restricted to poor overpopulated corruption ridden third-world people. Doctors in the US freely sometimes recommend unnecessary heart-bypass surgeries instead of recommending life-style changes. They make more money performing by-passes and don’t make any money if the patient changes his life-style.

The power of incentives is awesome. Look carefully at the roots of persistent poverty and you will see that someone makes money and therefore it is in the interests of the person to perpetuate that poverty. This is not even limited to the economic sphere alone, of course. Mother Teresa’s goal was religious glory and her incentive was therefore perpetuation of overpopulation because people are the fodder that the church feeds on. Is there a way out? I think there is. Stay tuned.