Nobel Lessons
To really improve its welfare policy, India needs improved data and accountability
The winner of the 2015 Nobel Prize for economics, Angus Deaton, has had a long professional association with India. It is unlikely that any of the recent prize winners has as strong an India connection. And various lessons from his work are quite relevant to Indian public policy today , for example the lesson about measurement being the key to enforcing accountability . Deaton was a pioneer in devising ways to measure consumption, which led to a better understanding of poverty and ways to fight it. India, unfortunately , falls short when it comes to measurement.For a political system which sees all political parties promise to spend large sums on welfare measures, there is a poverty of information on outcomes. This issue has bothered Deaton as underlying causes of change in India are often a `puzzle'. For example, inadequate and disjointed data on malnutrition make it difficult to reach a satisfactory conclusion on the extent of progress made over the years even after having substantial sums to deal with it.
The Narendra Modi government has accepted the relevance of measu rement in driving change in areas such as ease of doing business. There fore, it is surprising that the efficacy of government spending on various programmes seems unimportant.If the government has to make good its promise on maximum governance, it has make its spending priorities more accountable.
Two other lessons from Deaton's work are relevant to policy making in India. He has been sceptical about the extraordinary claims of new approaches to designing superior schemes to combat poverty , particularly the use of randomised controlled trials. A healthy dose of scepticism is a necessary ingredient in policy making as it limits the possibility of making a wrong choice. At the same time, Deaton has been open to taking strong stands be it on the efficacy of cash transfers or the possibility of long-term harm to recipients of foreign aid. For an Indian audience, the Nobel is a welcome development as his work has been of particular relevance to our challenges.We spend over Rs 3 trillion annually on subsidies and welfare measures but make slow progress in poverty reduction, with almost a third of the population still poor. India's fight against poverty , however, has benefitted from Deaton's body of work and will continue to gain from his relentless drive to understand the way things work.
Source: Times of India, 14-10-2015
The Narendra Modi government has accepted the relevance of measu rement in driving change in areas such as ease of doing business. There fore, it is surprising that the efficacy of government spending on various programmes seems unimportant.If the government has to make good its promise on maximum governance, it has make its spending priorities more accountable.
Two other lessons from Deaton's work are relevant to policy making in India. He has been sceptical about the extraordinary claims of new approaches to designing superior schemes to combat poverty , particularly the use of randomised controlled trials. A healthy dose of scepticism is a necessary ingredient in policy making as it limits the possibility of making a wrong choice. At the same time, Deaton has been open to taking strong stands be it on the efficacy of cash transfers or the possibility of long-term harm to recipients of foreign aid. For an Indian audience, the Nobel is a welcome development as his work has been of particular relevance to our challenges.We spend over Rs 3 trillion annually on subsidies and welfare measures but make slow progress in poverty reduction, with almost a third of the population still poor. India's fight against poverty , however, has benefitted from Deaton's body of work and will continue to gain from his relentless drive to understand the way things work.
Source: Times of India, 14-10-2015
