[UnpackED - 1] Why do governments' efforts to reform education not yield outcomes?

[This is 200th post on my blog! Came a long way in 1.5 yrs]

This is the first post in the new blog series summarising arguments of my book "UnpackED-The black box of Indian school education reform". [Zeroth post here]

My book is a result of exploration of question "Why do governments' efforts to reform education not yield outcomes?". The standard explanations given to this question like - teacher training is broke, recruitment is broke etc. didn't satisfy me. This is an attempt to give a comprehensive answer to this question.

Governments' reforms to reform education don't yield outcomes because they lack quantity and quality. Quantity is about the "amount of reform", while quality is about the "quality of executing the reform". It may sound intuitive but it isn't. Let's explore each of these.

I. Quantity: Governments' follow a fragmented, piecemeal approach to reform. Only a few constraints are addressed at each point in time. Since, the effectiveness of these initiatives also depends on addressing other complementary constraints (that are left unaddressed), they don't yield outcomes. This is one of the reason why many controlled experiments seeking to evaluate the effect of adding individual inputs of education (free textbooks, SMCs, infrastructure, diagnostic feedback etc) don't show outcomes.

Reforms, even if incremental, across a wide range of connected domain are essential to translate efforts into outcomes.

II. Quality: Quality of reform is essentially about the "executing" the policy ideas. It is usually termed as "we need to get implementation right" or "we need to implement properly". However, these phrases conceal more than what they reveal. Weak implementation is certainly not the issue with education alone, it's prevalent across many sectors in India. Therefore, one has to identify specific mechanisms that lead to weak implementation and not just simplistically term it as an implementation issue.

The specific reasons for poor quality of reform in education are four fold: 

i) Mismatch between nature of governance required for education and the nature of governance being pursued: Education delivery is fundamentally different from other government tasks because the frontline worker (teacher) has to exercise discretion and to continuously engage for long time. These aren't amenable to strict rules and rigid mechanisms. This is unlike tasks like post office where the steps involved in task are clear; front line worker needs to exercise little discretion; amenable to rigid rules. Tasks of former nature are difficult to execute as compared to latter; they require fundamentally different form of governance that has more flexible and dynamic forms of bureaucratic interactions, unlike post office or conducting elections where SOPs can be put in place.

The issue with quality of reform in India is that education is being governed with a mindset suitable for post-office like organisations. This primarily involves converting a dynamic, discretion involving, implementation intensive task to rule based task, stripping away the dynamism and discretion. This is reflected in several government actions.

For instance, teacher mentoring is a implementation intensive task involving continuous long-time mentoring. It is converted into a task amenable to rule based monitoring stripping away dynamism. This is is done by converting teacher training into only a series workshops and continuous support is reduced to complying with filling up reports. Similarly, teacher monitoring is reduced to complying with "completion of syllabus", a rule based monitoring. Implementation intensive and dynamic nature of teacher support personnel's tasks are reduced to data gathering, something that can be monitored using rules.

It is no surprise that many personnel feel that they are mere cogs in the wheel and their duty is just to follow instructions from above. Reforms don't yield outcomes if people who are supposed to use their discretion creatively are regimented to follow instructions from above. There is also evidence to suggest that states that enable local initiative and pursue dynamic informal bureaucratic norms at local level are more likely to have higher outcomes.

ii) Overlaying pedagogy interventions over weak systems: pedagogy scale-ups are parachuted into classrooms which mostly fail because the system doesn't have the supporting structures like teacher training capacity etc. When these scale-ups fail, particular pedagogy is diagnosed as the issue and not the lack of supporting systems. This leads to another pedagogy intervention, which again ends up failing.

iii) Premature loading of system: Weak systems are loaded with programmes that require strong capacity to execute. For instance, CCE is a good idea but it requires strong capacity to execute. When the system is loaded with such complex interventions, it breaks down or doesn't show results. 

iv) Focus on programme implementation rather than addressing constraints: Often, reform is pursued in terms of particular programmes. If this programme faces any constraints, temporary workaround solutions are employed to just get the task at hand done. For instance, if the programme is to built boundary walls and the money transmission systems are clogged; a temporary special mechanism of transfer is pursued, without addressing the real constraint of clogged money transmission systems. This way, the constraints in system remain forever necessitating special mechanisms each time.

Overall, governments' efforts to reform education don't yield outcomes because of low quantity of reforms, inappropriate nature of education governance and inappropriate method of pursuing programme implementation with disregard to capacity constraints. Many other issues with education can be pointed out but they emanate from these fundamental reasons. The other reasons can be explained in the framework of these fundamental reasons.  There are also issues which are cited as critical constraints but they necessarily aren't - teacher salary, guest teachers etc.  Refer the book for details on this.

Now that we have established the issues with governments' approach to reform, the next post will deal with "Why do governments do what they do?", outlining the factors that drive this type of reform. Understanding these factors is essential to build strategy for reform.


Read my book: UnpackED  - The black box of Indian school education reform (pdf, free to download)
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[UnpackED - 0] New short blogpost series summarising arguments of my book, "UnpackED"

For long, many people asked me to give one line summary of my book, to write a 750 word article, to give list of "actionable policy recommendations". But, I refused to simplistically reduce my arguments to fit into space, for the sake of convenience. It was mainly due to three reasons.

One,  the underlying theme of the arguments in my book is that the issue with education policy is with the mental models - the way we frame questions and the way we think about solutions. In order to internalise the problems with "ways of thinking", one needs to follow the train of thought and disentangle one's own mental cobwebs. This isn't going to happen with one sentence or few paragraphs.

Two, I used to reply - "Look. The origin of my book is an article. I once wrote an article. Some people called these as superficial arguments. I wrote the book building up the argument from first principles to explain all the details. Now, you are again asking me to get back to article."

Three, I also had a thought at the back of my mind that it's not worth persuading anyone who refuses to make the effort to read because they are not interested enough in education policy, and hence may not matter much.  

The reality slowly sinked in. There were a couple of epiphanies in the due course of time. 

One, not everyone who seems interested is not actually interested in the way I thought. They have just few concerns about the education because they passed through the system but they aren't interested enough to make effort to dissect their thoughts. 

Two, to build a broader discourse, the "concerned" but not "interested enough" people is the first layer to cut through. They act as a significant lever.

Three, I realised that I can convince "concerned but not interested" people if I get their 2 hours of dedicated attention. I did a couple of 2 hour talks, where this was highly applauded. But the point is that no one's going to give me 2 hours of their time to listen to my arguments. Dissemination is severely throttled due to this.

Four, even those who are concerned and interested enough in education policy are too fixated on their world views of education. Essentially, everyone has an agenda of what's to be done and busy promoting it. So, they wouldn't necessarily read something new unless it comes from a famous person. Since I am not famous, there's no way of getting the argument through this section of people.

Five, after examining several books, I realised that "few catchy phrases or lines" that a reader can take home after reading the book, is one of the reasons for their popularity. Only these phrases and lines are going to stay alive in the mainstream discourse. My book had few or none of them.

Six, when writing the book, I had no idea who my audiences are going to be. I never thought about it. I just wrote the book because I felt that those arguments are to be made. I felt like writing. It's something similar to this blog. I just write because I feel like writing, without any conscious effort to market it. Since I was writing with this framework, I didn't make a conscious effort to strategise modes of dissemination as per audience. No market segmentation.

Seven, I realised that there is a better way of phrasing the arguments that I made in the book.

Overall, the final point is that one can't escape away from 1 line summaries and 2 minute pitches. They are necessary to cut through all sections of people - concerned but not interested enough and concerned and interested enough.

So, I am attempting to rephrase the arguments of my book in four short blog posts. I am removing all the "important technical stuff" for the sake of convenience and presenting explanation only in layman terms. I am also removing many other additional topics discussed in the book; just sticking to what's "most important". Hopefully, after some time, I can squeeze these into one page note and finally into 1 sentence.

Links of blog posts below [will be updated as soon as the blog post goes live].

1. [UnpackED - 1] Why do governments' efforts to reform education not yield outcomes? (It also includes a related question of "what is it specific to education that makes it difficult for governments to deliver?")
2. [UnpackED - 2] Why do governments' do what they do?
3. [UnpackED - 3] Why are the best Indian private schools only below average on a global scale?
4. [UnpackED - 4] Strategy for Indian education reform

Sticking to the "42 blog marathon of one post a day" format that led to this book, I am going to do the same now. I will be posting these 4 blog posts over next four days.

Book Review: How China Escaped The Poverty Trap

The first part of the post had the summary of the book. This part has my comments on the book.

Lessons for India

1.  There’s no escape from decentralizationThis is a seemingly obvious point but all the actions of India’s politicians violate this cardinal principle. There’s an illusion that one can fix things with centralized structures. The sooner we realize the importance of decentralization and empowering the local governments, the better. Even in China, which is a one-party dictatorship, there is in fact a mixture of political centralization and economic decentralization.

China did this through incentivizing local bureaucratic heads, making them accountable for economic performance. India needn’t necessarily follow these precise policies but the general principle can be adopted. For instance, Indian mayors should be made more powerful, and be made responsible for city’s economic growth.

2. Don’t let identity aspects supersede other goals: One of the important lessons from the China’s experience is its laser focus on enhancing economic prosperity. As the book acknowledges, China could set this goal because of its political structure. In other societies, the process of setting up this goal is in the realm of politics, with competing goals.

In most developing countries, politics is not just an instrument to enhance economic prosperity; it is also a platform to negotiate, and also a mechanism to provide empowerment through participation. For instance, the prime issue of some elections need not be economic; it can just be a mere tussle for greater representation of certain communities and so on.

While the questions of identity are important and it’s good politics in long-term to negotiate these differences, one should not exploit these fissures deliberately for political purposes. It’s because once the identity issues become the prime issues, all other critical issues take a back seat. Most of the times, politicians activate these fissures for political purposes. It’s time to realize this and stop it.

 My comments

1. On harnessing weak institutions: I am deliberately playing a devil’s advocate to question the ‘harness weak institutions’ proposal. The counter question is ‘why not attempt to build strong institutions?’ to begin with.

To this, one may respond that institutions and markets have co-evolved in the past and hence they should be so in future. It may be true that markets and institutions co-evolved in the past but it raises two questions.

One, was the coevolution of market-institutions in the past out of necessity or with a complete knowledge of ideal institutions as a goal and with a prior strategy to reach that goal in incremental steps? If the evolution was out of necessity and was not part of a larger strategy with full realization of final goal, then this isn’t exactly the same case as present, when we have full knowledge of the future goal posts. Why should we re-invent the wheel then?

Why should the historical pattern that emerged out of necessity, be followed in the future too? What’s wrong with leapfrogging and creating strong institutions now, instead of waiting for institutions to mature? Will it lead to any repercussions?

Further, the situation in countries in India is not as bad as 1970s China where public bureaucrats are paid below minimum wage. Public employees in India are decently paid compared to the per-capita income. The low pay necessitating creation of other avenues for their income therefore is not a constraint.

One can now argue that proposals to build strong institutions may seem sensible but they don’t exactly layout how to do it?  It’s true that the prescription to build institutions doesn’t tell us what exactly to do but so is the case with the prescription to ‘harness weak institutions’. Ultimately, one has to figure these things out; no one can list them for all cases.

A further problem with the approach of ‘harnessing weak institutions’ is that it isn’t clear if it leads to positive outcomes in all cases. It can lead to creating huge entry barriers for many, keeping many prospective investors out of reach, as is the case with India currently. Such effects may have been less pronounced in case of China, because it was compensated by the strong incentives of bureaucrats to invite investors, which is not the case in all contexts.

Harnessing weak institutions can in fact turnout to be defense of the corrupt in the government, legitimizing their corruption.

Also, harnessing weak institutions inherently involves some amount of deviance from the ideal scenario. It may have worked in the past at times when the consensus on modern day governance principles of transparency, accountability etc., were less rigid and media is not as powerful as today. Today, such consensus is rigid. Any deviation from such consensus, even in good sense, is bound to attract media attention and the wrath of investigation agencies. The recent debate in India on punishing a bureaucrat for awarding coal mine licenses without following procedures is a case in point. The book also talks of similar instances in China. So, the question is – how can we do this in today’s world?

Finally, the prolonged weak institutions in India has resulted in a state of equilibrium where people have found a way around it to start businesses compelled by pressures to sustain themselves. If anything, countries like India might now be suffering from inefficiencies resulting from too much of harnessing weak institutions. The need of the hour is thus to transition to modern institutions and not more of harnessing weak institutions.

2. Petty corruption vs. Growth: The book posits that growth cures petty corruption. The evidence from India necessarily doesn’t support this. One still faces numerous struggles in government offices to get job done, without paying a bribe. There isn’t a perceptible decrease in levels of petty corruption, except in cases where certain services are automated.

3. Meta-Meta institutions: The book talks about meta-institutions that enable adaptability. I argue that we can go even a step back in the causal chain to meta-meta institutions. The meta-meta institutions tell us – what made the governments to enable conditions for adaptability?

This is an important question because there’s certainly something in China that enabled adaptability enabling factors like decentralization. Even if Indian leaders speak volumes about their commitment to growth and decentralization, they haven’t done much on the decentralization front, thereby prohibiting an important factor in enabling adaptability.

May be the meta-meta institutions has to do with the quality of leaders who are truly focused on prosperity and are ready to give away certain privileges for that purpose. This highlights the role of leadership in shaping the economies.

The fundamental causal factor for economic success then becomes leadership with appropriate vision and ability to create adaptability-enabling conditions to build strong institutions.

4. What about other inputs for growth?: The book talks mostly about the efforts of bureaucrats to invite investors and the resultant success. But this couldn’t have been possible without the presence of other complementary factors like skilled labour, education, health care etc., about which there is little description in the book. It would have been good if there was some description of efforts on these fronts, especially because many developing countries are finding it difficult to get these things right.

5. Other forms of institution building: Institution mostly deals with those related to market. Those are only one type of institutions. There are other types of crucial institutions like education, health care etc., which are the wicked-hard problems as Lant Pritchett calls it because of their implementation intensive nature. How did China build these institutions?

Book Summary: How China Escaped Poverty Trap

[From now on I decided to post book reviews in 2 parts. The first part would include two versions of the book summary — a TL;DR summary and a bit detailed summary. The second part would include my comments on the book. This is the 1st part of series on “How China Escaped Poverty Trap” that has its summary]
Author: Prof. Yuen Yuen Ang
Publisher: Cornell University Press
Year: 2016

TL;DR Summary

Chinese growth story is an outlier in the world. It is a versatile example that fits into many narratives, depending on what you look at and at what point of time. The book “How China Escaped The Poverty Trap” is also about China’s growth story but unlike the earlier research that focused only on parts of the puzzle, the book seeks to locate the Chinese story in the context of big questions of development and draws lessons from it for other developing countries. Broadly, the book deals with two big questions, drawing up on Chinese story.
The first question that the book deals with is regarding the growth-institutions debate that is usually posed as a chicken and egg dichotomy: Institutions are necessary for growth vs. Growth is necessary to build institutions. While the former doesn’t tell how to proceed forward starting from weak institutions, the latter doesn’t tell how to achieve the initial growth with weak institutions. What is the way out of this?
The book argues that the way out of poverty traps is to first use existing weak/bad/wrong institutions to build markets. That is the first step of development. Drawing from in-depth analysis of Chinese reforms, US and Europe’s evolution, the book argues that even in the countries that have good institutions now did not kick-start development by first establishing good institutions. They used whatever they had at the time (communal property rights, non-formalized public finance, non-technocratic bureaucracies) to create new markets. The rise of new markets subsequently motivated institutional change. Hence, in Ang’s term, development is “coevolutionary” (bi-causal), rather than in one direction.
Further, the book argues that the popularly cited cases like Glorious Revolution that are used to demonstrate that legislating modern day institutions led to prosperity, only tell a partial story. There’s a long history of co-evolution of markets and institutions much before Glorious Revolution. Glorious Revolution is only one event in that long history.
The pattern of growth-institutions coevolution in the past in China, US, Europe and elsewhere has been an adaptive path of: Harness weak institutions to achieve growth -> Use the growth to develop institutions -> Use these institutions to preserve markets.
While many have studied the second and third steps, the first step is relatively under studied. The book makes an important contribution here drawing from China’s experience. Harnessing weak institutions doesn’t necessarily mean doing the ‘second-best’ thing or ‘minimum possible’ or ‘good enough governance’, as is generally suggested. The key is to do incremental reform but across wide range of connected domains simultaneously, building upon the positives of weak institutions.
The further significance of the three-step pattern is that a) it is no dead end for countries with weak institutions, there’s a way out; b) the market building institutions are different from market preserving institutions and hence are to be dealt differently; and c) there’s no one ‘Chinese Model’ — it changed with time and also across regions within China.
The second question that the book deals with is the underlying conditions that enable the adaptability of institutions. Prof. Ang calls them “meta-institutions”. The idea is that it isn’t enough to merely state that adaptability is necessary to move from 1st step to 3rd step in the three-step pattern discussed above. One has to also identify the factors that enable the adaptability, the meta-institutions.
The book draws from China’s experience to identify those reasons that enable adaptability. China followed what Prof. Ang calls “directed improvisation”. It is a combination of a) appropriate decentralization to balance uniformity and variability b) franchise model of bureaucracy that shaped the incentives at local level, and c) pairing up regions to address regional inequalities.
Finally, the book updates the current general consensus of “man-made political and economic institutions underlie economic success (or lack of it)”, as argued in the book “Why nations fail?”. It posits that the “underlying cause of economic development, if indeed we had to name one, is the construction of an adaptive environment that empowers relevant actors to improvise solutions to continuously evolving problems.”
The lesson for other countries is not the specifics of China’s policy but its broad approach of enabling institutions to adapt themselves.
Now that I have given you the big picture of the book (TL;DR version), the rest of the post is structured as follows.
Section 1 explains the arguments and nuances of the two big questions mentioned above, in detail. This is for those interested in the details of the reform. Section 2 lists the lessons for other developing countries from China’s experience. In Section 3, I try to answer some of the common questions asked regarding China, from what I infer from the book.

Detailed Summary

I. The two big questions

1. Growth-Institutions dichotomy
We discussed that China’s story reflects a three-step pattern of growth-institution co-evolution: harness weak institutions to achieve growth → use growth to develop institutions -> use institutions to preserve markets. The three steps are explained in detail below.
In the first step, when China decided to pursue the prosperity path by promoting investment it had severe constraints as seen from today’s lens of ‘good institutions’. The bureaucracy was under paid, they were oriented in Communist framework and had little experience of promoting capitalism, and the huge size of China added its own complications. However, China still had the commune mindset where the inter-personal relationships were strong. China used this to promote initial growth.
Essentially, local bureaucratic heads were given yearly targets to attract investments. The bureaucrats would be paid as per the tax-revenue generated by the investments they brought. These targets were not just given to one organization, they were given to a wide range of organizations across the board, in some cases to even those organizations like environment department that’s supposed to screen investments. Since the bureaucrats were paid bonuses for bringing the investments, it addressed the problem of low pay. The bureaucrats now went on a major propaganda spree, digging into family networks, friends, relatives and anyone possible, persuading them to invest in their locality. The propaganda experience of Communist era was put to creative use here to attract investments.
One may observe that this is contrary to the modern day maxims of Weberian bureaucracy that emphasizes specialization and impersonality (conduct as per rules, not favouring anyone). There was no specialization here, all organisations were doing the same thing, bring investments. There’s also no impersonality, the investments were essentially based on personal contacts of the bureaucrats. Some times it led to conflict of interest and corruption too.
After this stage, once there were a large number of investments, the local governments started focusing on quality instead of quantity. It was accompanied by the administrative reforms that recognized property rights, reduced bureaucratic extortion etc. Essentially, it built modern day institutions compatible with markets. These institutions now preserve markets.
2. Meta-Institutions: Adaptability enabling factors
The idea of adapting institutions to enable growth before these institutions become ideal ones may not be completely new. Scholars like Qian talked about ‘transition institutions’ that explain the difference between China and Russia, despite Russia having better institutions on traditional metrics of property rights, openness etc.
The book builds on this, goes a step back in the causal chain and identifies the factors that enable the emergence of these transition institutions and their adaptability. China followed what Prof. Ang terms “directed improvisation”, a bundle of strategies that enable adaptation. It included the following.
One, the central bureaucracy categorized local bureaucracy’s tasks into three categories. The first category of tasks included those, which the local bureaucracy is prohibited from doing. The second category of tasks included those, which the local bureaucracy is mandated to do compulsorily. The third category of tasks are those where vague objectives are given but left completely to the local bureaucracy to figure out themselves.
Two, the local bureaucracy is given bonuses linked to the investments they bring in. At some point of time, apparently counties had to deposit some money with the central bureaucracy. Not meeting targets meant that this money wouldn’t be given back to counties.
Three, the well performing coastal states are paired up with inland states to balance regional inequality.

II. Lessons for other developing countries from China’s experience

The book lists six lessons from China’s experience for developing countries.
1. Delimit boundaries of experimentation and flexibilityFree experimentation can lead to chaos and not adaptability. China balanced these by placing limits on experimentation, depending on the policy issue and amount of information leaders had about problems at hand.
2. Activate incremental changes across connected domains simultaneously: Activating incremental changes across many connected domains simultaneously is more likely to stimulate systemic changes of the type seen in China, as opposed to strategies of “do the minimum possible”, “second best-practices” and “good enough governance”.
3. In the beginning, define success narrow: This is to focus the limited bandwidth but it doesn’t mean that one has to do few changes. China defined success narrowly as “economic prosperity” but it required changes across a broad range of issues.
4. Give everyone a personal stake in development process: I suppose this is self-explanatory, though few examples are found in developing countries, where incentives for development are typically lacking.
5. Let some get rich first but pair up the poor and the rich: Suppressing the rich initially to balance the rich and poor might be counter productive, as observed in Mao’s period. Deng chose to open markets and let the natural comparative advantages of coast work.
6. Harness weak institutions to build marketsIt may sound counter intuitive but one can make creative use of local weak institutions, as observed in case of China, Nigeria (Nollywood) etc. The book warns, “Where institutions that foster adaptive processes cannot be provided, it helps to at least not have wrong interventions”.

Section III: Inferring answers to Common FAQs and presumptions on China

Q1. What’s the Chinese model of growth?
A1: There is no single factor. It depends on the region of China you are looking at and at the time point you are looking at. But “directed improvisation” — a package of strategies that fostered adaptation within the bureaucracy — was the underlying system of adaptive development.
Q2: Is China a centralized government?
A2: China is a politically centralized regime, ruled by only one party, but, at the same time, it has one of the most decentralized administrative structures in the world. It has 5 levels of decentralized structures, with high autonomy to local governments.
Q3: Was China’s prosperity possible only because of China’s autocratic approach? If it were a democracy, would this have been possible?
A3: Not necessarily. The specifics of adaptive approach are because of the constraints of China that meant a bureaucracy dominate approach. In democracies, instead of centralized bureaucracy, society would have played a major role.

Farm loan waiver is a price for demonetisation

Harish Damodaran convincingly proves that demonetisation is the cause for recent farm stress. He argues that the lack of liquidity in cash-intensive agricultural markets left the farm produces with no buyers. This resulted in drastic fall in prices. He points out that the price crash is not in one or two crops as would happen usually, it is now across a wide variety of crops.

Damodaran also points out the negatives of targeting consumer price inflation that has high weightage to food prices. This structurally keeps farm prices low.

In another column, Pronab Sen says that farm distress is usually confined to few districts and that too during drought years. The fact that the current farm distress is in a year with good monsoon and across wide geographic areas makes this situation unique. He too attributes the cause to demonetisation.

For these reasons, Pronab Sen argues that the current context of farm distress is different from earlier contexts and merits a loan waiver to compensate for losses due to demonetisation. He writes
This is not a case of weakening credit culture or of moral hazard. It is the outcome of the simple fact that: while the government is willing to provide for 'acts of God', it is not willing to do so for an 'act of State' or force majeure. If anything, the State is in denial.
Pronab Sen further argues that if the state governments don't waive loans, the economic situation is going to be even worse. The farm loans are insured by Agriculture Insurance Company of India (AIC). AIC doesn't have enough capital to finance the current farm loans. So, in case of default, the central government has to capitalise AIC such that it can fund banks. It's just that the burden shifts from states to central government in this case. Further, in case of default, the additional negative is that farmers lose their collaterals in case of default, affecting their ability for future investments.

Pronab Sen also makes an important point that we are trying to shift farmers to commercial crops without ensuring necessary support structures, which makes farmers vulnerable to more risks.

To put a number to the losses due to demonetisation, Jaggi points out that the losses are easily triple that of CMIE's 1.2 lakh figure. He expects it to be easily 3.5 - 4 lakh crore. The denial of demonetisation led catastrophe and silence of early supporters like Prof. Bhagwati, Deheija is stunning. Meanwhile, we are using 101 economics to make farmers and informal sector to bear the brunt of demonetisation without considering the specifics of this context.

Liberals' denial of farm crisis II

Earlier, I posted about how some commentators have been constantly trying to undermine the farm crisis, and how it comes in way of creating discourse on long-term strategies

A famous commentator's recent column is a good example. In this column, the columnist who is also an economist, cites the increasing MSPs for rice and wheat to argue that economic crisis is not the cause of farm crisis but a political agenda is.

This is precisely this type of analysis that I was referring to in my earlier post, when I referred to emerging data witches using data to support pre-determined conclusions.

In this case, the columnist cites only YoY increase of output prices. An objective analysis would be to consider inflation adjusted prices (real prices) and also increase in input prices. Without considering these two factors, the increase in output prices doesn't tell anything about the situation of farmers.

As another column rightly points out, the inflation adjusted prices (real prices) of rice and wheat have in fact been falling since 2008-09. For instance, the real price of per quintal wheat was 220 in 2008-09. It fell to 170+ in 2016.

It's important to note that the logic of considering real prices and input costs is not because of lack of knowledge to do so. One doesn't even need to be an economist to know this. This is nothing more than pure blatant dishonesty.

One can oppose loan waivers for many reasons but it shouldn't come at the expense of facts. Some may be thinking that denying the farm crisis is going to solve the problem. One can't be more mistaken than that. It only worsens the problem.

PS: I do acknowledge that the term liberal is abstract. There are many shades of it. Also, not every one who is a liberal does this. The purpose of this post is to point out a general phenomenon among "some" prominent people, who drive the media discourse.

Liberals' narrative on loan waivers is partly responsible for perpetuation of such policies

India is currently facing twin-loan problem of non performing corporate loans and farm loans. A climate for farm loan waiver is slowly building up. Understandably, some analysts are concerned over continuing the "bad-practice" of farm loan waivers, that can make this a perpetual solution, as opposed to it being a short term, one time solution.

There are also arguments over the broader policy discourse that created the climate for such policies. Often, many point "socialist", "leftist" narrative as the leading factors. If we were objectively to analyse the reasons behind the built up legitimacy of the loan waiver policies, liberals have an equal share. Two actions of omission and commission illustrate this.

1. Attempts to dispute and delegitimise farm suicides: The response of some to farm suicide crisis, cited as reason for farm loan waivers, was to dispute the existence of such problem. 

Many tried to twist and turn the data to prove that economic distress is not the main reason for farmers' suicides. This analysis has two problems in general. The first is with the data chosen and the type of analysis. The second and more important problem is that many of these people who dispute the existence of farm suicides have never been to villages and interacted with such people. They were just trying to figure out insights from incomplete data by adding own biases to it, to support the pre-determined conclusions. In addition to that, those who documented farmers' economic distress were ridiculed.

The overall result of this narrative is that it reduces the importance of a real issue, impeding the process to find out long term solutions.

2. Deliberate overlooking of corporate waivers and revenue foregone: Till few years back, GoI's budget document used to publish "revenue foregone" figures. It was around 6 lakh crore per year. This is the revenue foregone due to subsidies to corporates in form of tax and other forms. Some of it may be necessary to attract investment, the results of which can only be seen in long term. But, it is hard to argue that all 6 lakh crores was done with legitimate purpose. Similarly, it is hard to argue that there is no wilful defaulter in the current NPA crisis.

Many have cited these figures pointing out the difference in treatment towards farmers and corporates. While, one wrong may not justify another wrong, there is an element of truth in this argument.

Again, if we were to objectively recollect the discourse over loan waivers, one can easily see that much of the liberals' concerns were only with farm loan waivers. They deliberately neglected and chose not to talk about the 'holy grail' of corporates. For some reason, any support to corporates is perceived to be good and any support to farmers is portrayed as regressive.

Instead of advocating savings by the low-hanging fruit of reducing inefficiencies in revenue foregone, some advocated saving by either increasing college fee or reducing budget towards welfare programmes. Of the many reasons that people conceive liberals to be anti-poor, this is definitely one among them.

The result of overlooking the corporate waivers is that today there is no legitimacy for one to stop farm loan waivers, in the presence of stark corporate loan waivers.

The issue of bad loans definitely needs a long-term solution because the short term solutions of complete waivers is not sustainable in long term. For this, acknowledging the facts is important in first place. Sadly, there are no towering figures in today's discourse who has both the legitimacy and the integrity to objectively look at the situation, propose measures and lead the discourse. Apart from data witches who use data to support pre-determined conclusions, all we have in the discourse today is "labels", "ideologies", and "personalities".

The disaster of "teacher incentives" in Andhra Pradesh

Transfer process of teachers is a complex issue, involving both administrative and political dimensions. Many states do not have codified transfer policies, leaving the postings to the whim of ministers. 

Fortunately, AP has a codified policy due to the efforts of ex-secretary of Education, Shri Poonam Malakondaiah, IAS. In this system, each teacher is given points according to several criteria - location of present posting (more points for interior areas), health, spouse, extra academic achievements etc. The posting is decided as per one's points. The one with highest points gets to  first choose the place he/she wants.

All was well till recently, when the government decided to add points for CCE (Continuous and Comprehensive Education) grades of students. It means that if a teacher's students have high grades in CCE, he/she will get more points.

This is fundamentally against the spirit of CCE, which was to use students' performance in CCE as a feedback process, and to make testing a low stake process. Using CCE grades to award points in teacher transfer process is misuse of the grades besides making it high stakes for teachers.

In context of weak capacity and weak monitoring, the inevitable happened. Many teachers inflated grades of their students to gain points in the transfer systems. In some cases, "B" is the least grade that any student in a class received. A section of teachers have done a huge protest in Amaravati recently, regarding this, but in vain.

Despite huge evidence on the perversions of high stakes incentive systems for teachers (check my book for summary), the intuitive carrot-stick approach still seems to remain the prevalent form of enhancing performance. Teacher performance in most cases can't be enhanced by using a whip or linking performance to money. The sooner we realise the dangers of this and get into tough work of focusing on fundamentals, the better. Else, we will keep wasting energies on such issues.

Cash Transfers: Effects of price volatility on calorific intake

Effects of price volatilities is one of the issues with cash transfers. In case of in-kind transfers, as is the case with PDS, one receives same quantity of grains despite the increase or decrease in price. However, in case of cash transfers, the quantity of goods that can be bought changes with prices.

Earlier, people like Jean Dreze, argued on these lines, in their overall criticism against cash transfers. Others commented that price variability may indeed benefit the poor because, they can buy when the prices are low, thereby saving the money. This brings up a question - what is the effect of price variability on calorific intake of the poor?

Lucie Gadene, Sam Norris, Monica Singhal, Sandip Sukhtankar explore this question in their recent paper.  They explore the extent to which PDS mitigates price risks. There are two important insights from this paper.

First, they explore the impact of price risk on households of varying income levels. In better off households, price variability shouldn't have much effect on calorific intake, as compared to poor households. The NSS data they used supports this. They find that:
"certain types of households are more vulnerable to price risk. when prices increase 10%, there is a small 2.7% reduction in caloric intake for well-off land-owning households. For more vulnerable, landless households, calories decrease by 6.2%.
Interestingly, the difference in price responsiveness between landless and land-owning households is much more dramatic than the difference between below- and above-median expenditure households (column 3 vs. column 4), who respond similarly to variations in prices. As expected, owning land (and being able to grow food when prices are high) substantially lowers responsiveness to price risk in a way that even being above-median expenditure does not."
Second, the impact of price variability also depends on level of prices. In other words, variability over a base price of Rs. 10/- may have more effects than variability over base price of Rs. 5/-. The researchers cleverly use the change in PDS prices in Kerala to further explore this phenomenon. 

In 2006, Kerala reduced the price of rice from Rs.6.2/kg to Rs. 3/kg. Now that the price is low, one should expect that the effects of price volatility should reduce. In other words, the variability of price over and above base price of Rs.6.2/kg should have more effect on calorific intake than the variability of price over and above base price of  Rs. 3/- kg.  Further, as noted above, this difference should be stark in poor households and less stark in relatively better off families.  The researchers find exactly this.
"for land-owning households, a 10% increase in rice prices reduced calories by the same amount (2.2%) before and after the expansion. For the landless households - one of the groups that the PDS is trying to help - the difference was dramatic. Before the expansion, a 10% increase in prices reduced calories by 7.6%. After the expansion, the same price increase reduced calories by only 2.2%, the exact same amount as the land-owning households."

Overall, this paper suggests that the welfare costs of price variability are real and significant. PDS protects people against these. This variable should now get more attention in the cash vs. in-kind debates. The argument to calibrate cash transfers to general volatility in prices should now get more attention.

Hindi Imposition, Language Discrimination, and Dravidanadu

#StopHindiImposition and #Dravidanadu trended on twitter few days back. This is the first time that this issue got mass public attention in recent times. But, this is only a manifestation of long built up pressures, catalysed by recent incidents.

Forms of Hindi imposition and language discrimination in India

To begin with, there is Hindi imposition and language discrimination in India at various levels. Many may not admit this uncomfortable fact but this is a reality. The Hindi imposition and discrimination ranges from subtle forms to forceful imposition.

The subtle forms of discrimination can be witnessed in both states' policies and citizen-citizen interactions. Subtle forms of discrimination in states' action include promoting only Hindi drama clubs in universities etc. 

The social sphere includes the dismissive and derisive attitude experienced by non-Hindi speaking people.  The myth of "Hindi is the national language" is used as an excuse for this behaviour, often ridiculing others for not knowing to speak Hindi. 

This is exacerbated due to increased migration from North to South. Several local groups have been pointing to derogatory attitude witnessed by them in Bengaluru - "If a South Indian goes to Delhi, they are expected to learn the language of the majority there (Hindi). But, if a North Indian comes to Bengaluru, they question us - 'why don't you know Hindi?' in a derogatory manner. They expect and force us to learn Hindi instead of doing the opposite.".

This form of dismissive attitude is witnessed even on the floor of parliament, where some Hindi speaking parliamentarians ridicule non-Hindi speaking MPs for giving speeches in English and for not understanding Hindi.

Even to this day, there are many who think that South of Maharastra is all madarasis, and no other states exist. Lack of knowledge about South India is witnessed in media too. Some have termed this phenomenon as "Amit media".

The moderate forms of discrimination include conducting crucial all India examinations only in English and Hindi, disproportionately discriminating large number of students who are educated in their mother tongue. Even after decades, the JEE examination, which is an admission test for all major engineering colleges in India is conducted only in English, Hindi and Gujarati.

Public services in non-Hindi speaking states often have communication in Hindi and not local language.

Tara Krishnaswamy has compiled the list of several forms of Hindi imposition and discrimination by the Union government. This include the seemingly funny but illustrative examples of a senior leader wishing Keralites in Hindi, which many in Kerala have no clue about.

The extreme forms of imposition and discrimination include attempts to declare Hindi as national language, pursue Hindi imposition in the name of promotion, and trying to make it mandatory.

Expression of dissent against language discrimination

Many forget the language debates in India and formation of linguistic states and the protests in TN. Formation of linguistic states settled one of the major visible issues, pacifying the situation for time being. But, the other subtle forms of discrimination remained as noted above.

Till now, the subtle forms of language discrimination wasn't articulated well because it involves the risk of sounding secessionist. NTR of AP was the last to articulate it successfully. He formed a party on the theme of Telugu pride. It necessarily didn't address the core issues. There was a lull since then. It has now picked up again, although in a different shape. The issue of language is now being linked to other socio-political-economic issues as well.

Few months back, Tara Krishnaswamy has pointed to the skewed distribution of resources across states and the discrimination of South Indian states. She argued for the formation a South Indian collective to prevent the bullying of the North. Responding to this, Arvind Ilamaran argued that redistribution across states is inevitable. But he added that this redistribution should be for the sake of equity and not to fulfil deficits created due to deliberate mis-governance.

Praveen Chakravarthy of IDFC in a well research article pointed out to the skewed distribution of resources across states. "Out of every Rs 100 that the average resident of Maharashtra, Gujarat, Tamil Nadu, and Karnataka contribute to the Centre in taxes, three-quarters (Rs 75) of it goes to help the other states and the Centre. On the other hand, for every Rs 100 that the average resident of Bihar, UP, Orissa and Madhya Pradesh contribute, they get back roughly Rs 200." Some have hence pointed out - despite all this, protesting farmers in TN don't get any attention.

The feeling of discrimination is now shaping up politically too. Famous film star of Andhra Pradesh and founder of a new political party in AP, Pavan Kalyan in his Harvard address, raised the issue of discrimination faced by the South. He even went on to the extent of saying that North Indian leaders have no idea and knowledge about the South. This sparkled several debates in AP.

These underlying currents are given shape by the new union government rules making Hindi mandatory in essence, under the pretext of promoting it. Union government's new rules on  beef slaughter placed final nail in the coffin. Several parties across South India have now made this a political issue and are strongly opposing it.

The recent trending of #StopHindiImposition and #Dravidanadu are only an expression of all these underlying currents.

Way forward

The situation is only going to worsen further because of the high fertility rates in the North as compared to South, changing the political dynamics. India can't afford to have these identity frictions at this juncture. Whenever identity issues gain prominence, it trumps all other issues, delaying progress on other fronts. We need to take stock of this situation and act accordingly to avoid friction in the future.

First, acknowledge the importance of language.  Language, the means of human communication is one of the primary differentiators between humans and animals. Thus, unlike other ideological constructs like religion etc, language forms the core of one's life. Many people think in mother tongue. If you don't believe this, just observe Hinglish speakers next time - the way they fuse Hindi and English, while appearing to speak in English. It's because many of their thoughts are in Hindi.

Any attempts to attack such crucial element of one's life called language results in backlash. Even if someone isn't conscious of their language, attempts to ridicule it or discriminate it, strengthens the mobilisation under this identity. Government should better stay out of it.

Second, don't make Hindi the marker of national identity. Large population in India never spoke Hindi. The South, North East have their own distinct languages and traditions. As Arvind Ilamaran put it, "to claim that North and South are cut of the same cloth is historical ignorance at best and political malice at worst". Hindi can thus never be made the basis of uniform national identity. There are 122 major languages spoken in India. Andhra Pradesh split up into two because of the discrimination of one form of Telugu in favour of the other.  It's foolish to impose Hindi and make it a marker of national identity. It cannot be justified either morally or politically. It will be a historical blunder to do so.

When an Indian PM gave a speech in Hindi in an international forum, many in India applauded. Why not give that privilege of using one's own mother tongue, to others too?

Third, acknowledge the existing reality of discrimination. Even if government can't heal the larger sociological issues in short term, it shouldn't at least try to aggravate it hiding behind age old rules and laws. 

Fourth, both government and citizens need to be language sensitive. Before taking any action or speaking, both people and government would do good for themselves if they remind themselves that Hindi is not a mother tongue of 60% of India's population. Neither is Hindi a national language. Just because some language is spoken by more number of people doesn't mean that others should be forced to do that.

More importantly, government shouldn't hide behind age old language acts to justify its decisions. Mere existence of a rule or act doesn't make it just. One can choose not to act or repeal them. Even many of our early national politicians including Nehru, Patel and Lal Bahadur Sastri have undermined the importance of language. Nehru and Patel for example opposed linguistic states. We only learnt the lessons later. Therefore, there is also no need to cling to the acts and rules of that era.

Fifth, government should take steps to address the exiting glaring language discrimination. It can start with giving option to write all India exams in mother tongue; providing public services in local language; communicating PM's speeches in local languages by using subtitles while PM is speaking OR broadcasting translated versions later etc. All these don't require enormous investments and efforts, given the technological advances. It just needs sensitiveness and the will to do it.

At a time when everyone in education is talking about instruction in mother tongue, we should also extend this to other arenas of life, facilitating communication in mother tongue. It will make life easier for many.

Several cross-cutting identities exist in India. We would do better for ourself if we are sensitive to them and don't aggravate them deliberately. Given other major pressing problems to solve, we can't afford to dissipate time and energy.

Multiculturalism should be the way forward.