SUYASH RAI, ANIRUDH BURMAN
ANALYSIS
The Economic Complexity Outlook Index measures how well a country is positioned to grow through diversification into more complex products by quantifying how close the products it makes are to the products it does not make. A high score on this index means that there are many nearby complex products that require capabilities like those reflected by a country’s existing production. India has consistently ranked number one on this index for more than two decades. Read the essay to understand what this means for the present-day government’s strategy of seeking growth through protectionism and production-linked incentives, the potential to attract investors looking to move away from China, and for choosing a suitable strategy of industrial policy.
The essay argues against an exaggerated critique of Indian democracy, emphasizing that despite the Bharatiya Janata Party’s (BJP) dominance, electoral politics in India remains open. Drawing comparisons with historical political eras, particularly the 1967–89 period, it contends that the BJP’s current dominance differs significantly from the Congress Party’s earlier hegemony. The analysis highlights the dynamic nature of Indian democracy, where opposition parties have challenged and transformed power structures over time. The essay underscores the importance of considering historical context and avoiding a narrow focus on recent political dynamics. It suggests that claims of diminished democracy may overlook the fact that most voters are not rigidly aligned with any party, and electoral outcomes depend on persuading a plurality of citizens. The essay ends with a warning against breeding despair about the possibilities of electoral success, emphasizing that the flexibility of India’s democratic system allows for change and accountability.
This essay critiques Delhi’s land pooling scheme, implemented by the Delhi Development Authority (DDA) for urban expansion in the city. The essay underscores the “holdout problem,” with landowners reluctant to participate, impeding the scheme’s effectiveness. The essay contrasts Delhi’s approach, which places heavy responsibility on landowners for planning and implementation, with more successful models in Gujarat and Andhra Pradesh (Amravati), where the state plays a proactive role. The essay argues that the policy design in Delhi be revised and that there be a shift from the DDA’s role as a land acquirer to that of a facilitator and planner. The essay argues that the proposed changes to the DDA’s law to enable mandatory pooling will not solve the DDA’s predicament.
This essay compares land pooling policies in Haryana and Maharashtra, two relatively rich and industrialized Indian states. It highlights their distinct approaches to urban development, specifically how they have acquired land for new urban development. Haryana’s land pooling framework, developed over a decade, emphasizes voluntary participation, fair compensation, and a partnership-oriented approach. It also offers landowners developed plots and interim support in some cases. In contrast, Maharashtra’s Navi Mumbai Airport Influence Notified Area (NAINA) project initially proposed voluntary land pooling with incentives but shifted to compulsory town planning schemes due to initial setbacks. This contrast underscores the varying effectiveness of land acquisition strategies across Indian states, reflecting local needs, fiscal resources, and the different views and capabilities regarding the government’s role in urban development.
According to a rapidly spreading narrative, India has accelerated progress on financial inclusion to such an extent that it has achieved in less than a decade what would otherwise have taken half a century. This essay presents a comparative analysis to show that India’s progress on financial inclusion has been creditable but not exceptional. Further, it argues that while innovations have helped with inclusion, the government has also used undue coercion to accelerate the opening of bank accounts. This coercion meant that the account-opening push was not accompanied by attention to detail on the quality of service required to ensure that the accounts are routinely used. As a result, India has an unusually large percentage of inactive accounts. Finally, it is argued that inclusion requires diverse, subtle approaches, not digital silver bullets.
The essay critically examines the Make in India initiative, assessing its impact on manufacturing based on various economic indicators. Despite high-profile investments, the analysis reveals a significant gap between the government’s narrative and economic reality. Key metrics, such as the share of manufacturing in gross value added, gross fixed capital formation, and employment generation, show little improvement since the initiative’s launch in 2014. The essay delineates two phases of the Make in India strategy: an initial focus on investment facilitation and ease of doing business, followed by a shift to fiscal policy instruments like tariff hikes, tax cuts, and production-linked incentives. The essay advocates for a nuanced evaluation, combining cost-benefit analysis with macroeconomic impact assessment, emphasizing transparency, intellectual justification, and a willingness to adapt the strategy based on evidence. The analysis warns against the sunk cost fallacy and underscores the challenges of getting industrial policy right in a complex economic context like India’s.
This essay delves into the dynamics of Hyderabad’s booming land and real estate market, exploring the demand and supply factors behind soaring prices. Factors like the city’s economic growth, IT and pharmaceutical industries, and investments from nonresident Indians (NRIs) fuel demand. Simultaneously, Hyderabad’s government has responded by expanding transport infrastructure, liberalizing land use, and auctioning government land. Despite these supply-side efforts, prices continue to rise, driven by investor interest rather than consumer need. The essay concludes that Hyderabad’s market reflects a complex interplay of local and global forces, necessitating nuanced planning and consumer protection.
REVIEW
This essay discusses the relationship between GDP per capita and various measures of basic material well-being, emphasizing the importance of economic growth for overall development. Drawing on a recent paper by Lant Pritchett and Addison Lewis, the analysis finds a strong correlation between GDP per capita and indicators of living conditions, health, and education. The paper reveals a nonlinear relationship, indicating that lower-income countries experience more substantial improvements in material well-being with economic growth. While causality is complex, achieving significant advancements in material well-being is challenging without concurrent increases in GDP per capita. Applying this understanding to India’s context, the essay suggests focusing on areas where the country performs worse than expected based on its GDP per capita, emphasizing the integral role of sustained economic growth in overall development.
The essay discusses Joseph Heath’s book, The Machinery of Government: Public Administration and the Liberal State, which presents a theory of justice for public administration within liberal democracies. Despite the executive branch’s prominence, philosophers have paid limited attention to its ethical dimensions. Heath’s reconstructive approach aims to derive ethical norms from implicit principles within administrative practices. He examines three accountability models—hierarchical, popular, and vocational—arguing for the importance of vocational ethics due to the complexity of civil service work. Heath suggests civil servants should develop a self-standing concept of “good policy” while maintaining deference to elected officials. Linking legitimacy to efficiency, equality, and liberty, Heath explores the historical evolution of liberal principles and their role in shaping administrative norms. He emphasizes the civil service’s duty to promote basic liberal principles, acting as a counter-majoritarian check in stable democracies. While addressing civil service ethics, the essay calls for consideration of challenging contexts and response strategies during political realignments.
This review analyzes M. Nolan Gray’s Arbitrary Lines, critiquing zoning as an urban planning tool. Gray argues that zoning, initially sold as a progressive idea for rational city restructuring, has evolved into a mechanism that stifles economic growth, exacerbates racial segregation, and makes housing unaffordable. The book traces zoning’s history from its early adoption in New York, driven by political and homeowner interests, to its widespread use across U.S. cities. Gray highlights the detrimental effects of zoning on urban development, affordability, and population dynamics in productive cities. The book also examines Houston’s unique approach, showing how a city can thrive without zoning regulations. Through numerous examples and data, Gray makes a strong case for revisiting zoning as an urban planning tool.
This essay presents a review of Andrew Saint’s London 1870-1914, a City at its Zenith. The book paints a vivid portrait of Victorian London’s tumultuous growth amid a rapidly globalizing world. The city grappled with economic prosperity juxtaposed against widespread poverty and inadequate institutions. Saint, an accomplished chronicler of London, weaves together architectural, biographical, and institutional history, offering a nuanced analysis across social classes. Divided into four insightful chapters, each spanning a decade, the book captures the city’s restlessness, showcasing progress amid chaos. From changing social norms to the emergence of civic infrastructure and educational institutions, Saint navigates through pivotal moments. The narrative covers the rise of socialist ideologies in the 1880s, voluntary efforts to address worker issues, and the city’s cultural and recreational expansions in the 1890s. The final chapter delves into London’s transportation evolution, suburbanization, and the suffragette movement. Balancing individual agency and institutional adaptation, Saint illustrates London’s transformative journey, emphasizing the synergy between public and private initiatives. Through engaging storytelling, the book provides a comprehensive understanding of the city’s evolution, underlining the importance of civic commitment and individual initiative in shaping a great metropolis.
5. Two Review Essays on Democratic Backsliding
This year, Ideas and Institutions published two review essays providing an overview of the global and Indian debates on democratic backsliding. “Understanding the Debate on Democratic Backsliding Through Two Papers” reviews the global debate based on a working paper by Andrew Little and Anne Meng, which challenges the prevailing narrative of global democratic decline, and the V-Dem Institute’s response to the paper, which seeks to defend its approach. “Five Perspectives on the State of India’s Democracy” reviews a symposium in the July 2023 issue of the Journal of Democracy on the question of whether India is still a democracy. The essay highlights the complexity of assessing India’s democracy, urging a deeper understanding of diverse indicators, normative perspectives, and historical contexts to grasp the nuances of this ongoing debate.
In The Progressive Maharaja: Sir Madhava Rao’s Hints on the Art and Science of Government, the author, Rahul Sagar, reintroduces a nearly lost text by Raja Sir Tanjore Madhava Rao, who served as the dewan of Baroda in 1881. Rao’s lectures, delivered to prince Sayaji Rao Gaekwad, aimed to prepare him for ruling the native state. Sagar’s introduction contextualizes the lectures, revealing Rao’s experiences in governance and his belief that good governance could benefit citizens in native states. Rao advocated for a constitutional monarchy focused on people’s happiness and drafted a constitution for native states. His principles encompassed public trust, equal justice, administrative efficiency, and adherence to constitutionalism. The lectures covered internal administration, foreign relations (particularly with the British Raj), and the personal conduct of the ruler. The essay explores the relevance of Rao’s ideas in contemporary India, highlighting enduring principles of governance, public institutions, expertise in appointments, leaders’ intentions and conduct, and the importance of improving citizens’ well-being through institutional changes.
This review evaluates Mihai Varga’s critique of World Bank-led land reforms in Eurasia in Poverty as Subsistence. Varga dissects the bank’s policies, which advocated land redistribution and titling as enablers of economic growth but failed to complement the redistribution of property rights with necessary support mechanisms. He argues that the World Bank misunderstood the Chinese land reform model, focusing on privatization without recognizing the crucial role of state support. Varga’s fieldwork in Ukraine and Romania provides evidence that subsistence farming, often viewed negatively, is a resilient response to the informal economy and a consequence of poorly supported land reforms. He advocates for a nuanced approach to land reforms, balancing state withdrawal with adequate support.
This review explores literature on land value taxation, a concept championed by Henry George, as a solution to rising wealth inequality linked to housing wealth. Recent studies, including those by Morgan and Shahab and Schwerhoff, Edenhofer, and Fleurbaey, investigate the efficiency and equity of land taxes. The literature acknowledges the theoretical benefits of land value taxes in redistributing wealth and being non-distortionary. However, it also highlights practical challenges in implementation, such as technical assessment difficulties, political constraints, and varying impacts based on household wealth profiles. This literature underscores the need for understanding the theoretical benefits of land value taxation and applying them pragmatically to address contemporary economic inequality.
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