What if you can’t be the ‘very best’? Why, of course, you must try hard to be better at ‘being better’. Whether it is contestants in beauty pageants, educational institutions seeking to go up some notches in university/business-school rankings, or even countries which seek to attract investors by pitching themselves as ‘better’ and more attractive investment destinations, the game seems to be one of ticking the right boxes and catering to external perceptions of what matters, so as to win the game.
Take the case of the now-disgraced ‘Doing Business’ report, which was recently junked by the World Bank. The report, for the past 17 years, was followed by policymakers, corporate honchos and politicians, besides academics, and taught in business-school classrooms as a way of assessing a country’s business environment.
The junking of it has been framed as an issue related to ethical concerns, linked to data irregularities, especially in the survey’s treatment of countries such as China, Azerbaijan, the United Arab Emirates and Saudi Arabia and their being bumped up a few notches in the likely expectation of quid pro quo deals for the Bank. However, there are deeper concerns with the whole business of ratings and rankings.
Students in classrooms and media (both local and global) revel in reports of India doing better and improving its rank on the ‘Ease of Doing Business’ indicator.
India, undoubtedly, has done better, climbing a cool 79 positions in the five years between 2014 and 2019 to finally reach 63rd place (out of 190 economies) in the World Bank’s (WB) 2020 ‘Doing Business’ Report.
The obsession with ratings and rankings, in line with the predilection of Indians for tangible success metrics, results in our celebrating such ‘improvements’ without quite understanding the methodology or impact of such rankings on the larger goals affecting the lives of a larger group of stakeholders.
India’s ‘Ease of Doing Business’ is based on such ease improving in just two Indian cities, Mumbai and Delhi. Clearly, there is no reason to celebrate when only two cities do better at ‘being better’.
Of course, inspired by the ‘Doing Business’ rankings, the Indian government has initiated improvements at the level of Indian states and Union territories (UTs) as well.
In 2014, based on the 10 business topics tracked and monitored by the World Bank’s report, the Centre came up with a Business Reform Action Plan (BRAP) for Indian states and UTs.
The implementation of these rankings and the Ease of Doing reforms by those administrative units has been linked to additional borrowing permissions for states, apart from other bounties, even if these reforms may merely mean a ‘race to the bottom’.
A perusal of the ‘Business Reforms’ on the WB website indicates a high value placed on such pauperizing ‘reforms’ as the US reducing its corporate income tax rate from 34% to 21% in 2018, and Hungary cutting the social tax rate paid by its employers from 22% to 19.5% in January 2018. Should India or other emerging economies pursue such policies? This remains a moot question.
The strategies used by countries or states trying to do better for maximum pay-offs may be analysed using game theory.
Consider the Prisoner’s Dilemma, which reveals why a ‘limited’ player game, involving 190 countries and/or 29 Indian states and seven UTs, would result in predictable dominant strategies.
A dominant strategy, by definition, is superior for it promises the maximum possible pay-off irrespective of what competitors do. Pursuing ‘Doing Business’ reforms appears to be a dominant strategy for emerging countries and backward states, with larger pay-offs envisaged in terms of greater foreign investment, larger central funding, etc.
However, in doing so, they may simply act as ‘prisoners’ of a Western paradigm of development and success, choosing sub-optimal (even if dominant) strategies, with their inferior fiscal and welfare implications for India. These are strategies that devote little attention to improving social equity and addressing ecological concerns.
Ratings and rankings, in general, promote a certain homogeneous paradigm of success, one which may not be in line with the specific needs of individual countries or even institutions.
The case of the Doing Business report being abandoned holds lessons for business schools and educational institutions trying to chase sub-optimal global standards as well.
The success-fetish of management education has made it fashionable to speak of “learning from failure”, even as we prostrate at the altar of global ratings and rankings and try hard to be part of an elite club of successes.
Changing the narrative will require a concerted effort on the part of Indian business schools to cooperate, challenge and set out a set of goals that are more relevant for us.
Or else, we run the risk of being trapped in similar Prisoner’s Dilemma situations that countries participating in the WB rankings found themselves in.
The WB has resolved the dilemma for participating countries for now by dumping that report. Countries may find themselves free to pursue different goals. Can Indian educational institutions now solve the Educator’s Dilemma for themselves?
https://www.livemint.com/opinion/online-views/the-doing-better-syndrome-and-our-prisoner-s-dilemma-11632247006971.html
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- In the Small States category (overall), Nagaland tops, followed by Mizoram and Tripura. Towards the tail end of the overall Delta ranking is Uttarakhand (9th), Arunachal Pradesh (10th) and Meghalaya (11th). Nagaland despite being a poor performer in the PAI 2021 Index has come out to be the top performer in Delta, similarly, Mizoram’s performance in Delta is also reflected in it’s ranking in the PAI 2021 Index
- In terms of Equity, in the Large States category, Chhattisgarh has the best Delta rate on Equity indicators, this is also reflected in the performance of Chhattisgarh in the Equity Pillar where it ranks 4th. Following Chhattisgarh is Odisha ranking 2nd in Delta-Equity ranking, but ranks 17th in the Equity Pillar of PAI 2021. Telangana ranks 3rd in Delta-Equity ranking even though it is not a top performer in this Pillar in the overall PAI 2021 Index. Jharkhand (16th), Uttar Pradesh (17th) and Assam (18th) rank at the bottom with Uttar Pradesh’s performance in line with the PAI 2021 Index
- Odisha and Nagaland have shown the best year-on-year improvement under 12 Key Development indicators.
- In the 60:40 division States, the top three performers are Kerala, Goa and Tamil Nadu and, the bottom three performers are Uttar Pradesh, Jharkhand and Bihar.
- In the 90:10 division States, the top three performers were Himachal Pradesh, Sikkim and Mizoram; and, the bottom three performers are Manipur, Assam and Meghalaya.
- Among the 60:40 division States, Orissa, Chhattisgarh and Madhya Pradesh are the top three performers and Tamil Nadu, Telangana and Delhi appear as the bottom three performers.
- Among the 90:10 division States, the top three performers are Manipur, Arunachal Pradesh and Nagaland; and, the bottom three performers are Jammu and Kashmir, Uttarakhand and Himachal Pradesh
- Among the 60:40 division States, Goa, West Bengal and Delhi appear as the top three performers and Andhra Pradesh, Telangana and Bihar appear as the bottom three performers.
- Among the 90:10 division States, Mizoram, Himachal Pradesh and Tripura were the top three performers and Jammu & Kashmir, Nagaland and Arunachal Pradesh were the bottom three performers
- West Bengal, Bihar and Tamil Nadu were the top three States amongst the 60:40 division States; while Haryana, Punjab and Rajasthan appeared as the bottom three performers
- In the case of 90:10 division States, Mizoram, Assam and Tripura were the top three performers and Nagaland, Jammu & Kashmir and Uttarakhand featured as the bottom three
- Among the 60:40 division States, the top three performers are Kerala, Andhra Pradesh and Orissa and the bottom three performers are Madhya Pradesh, Jharkhand and Goa
- In the 90:10 division States, the top three performers are Mizoram, Sikkim and Nagaland and the bottom three performers are Manipur and Assam
In a diverse country like India, where each State is socially, culturally, economically, and politically distinct, measuring Governance becomes increasingly tricky. The Public Affairs Index (PAI 2021) is a scientifically rigorous, data-based framework that measures the quality of governance at the Sub-national level and ranks the States and Union Territories (UTs) of India on a Composite Index (CI).
States are classified into two categories – Large and Small – using population as the criteria.
In PAI 2021, PAC defined three significant pillars that embody Governance – Growth, Equity, and Sustainability. Each of the three Pillars is circumscribed by five governance praxis Themes.
The themes include – Voice and Accountability, Government Effectiveness, Rule of Law, Regulatory Quality and Control of Corruption.
At the bottom of the pyramid, 43 component indicators are mapped to 14 Sustainable Development Goals (SDGs) that are relevant to the States and UTs.
This forms the foundation of the conceptual framework of PAI 2021. The choice of the 43 indicators that go into the calculation of the CI were dictated by the objective of uncovering the complexity and multidimensional character of development governance
The Equity Principle
The Equity Pillar of the PAI 2021 Index analyses the inclusiveness impact at the Sub-national level in the country; inclusiveness in terms of the welfare of a society that depends primarily on establishing that all people feel that they have a say in the governance and are not excluded from the mainstream policy framework.
This requires all individuals and communities, but particularly the most vulnerable, to have an opportunity to improve or maintain their wellbeing. This chapter of PAI 2021 reflects the performance of States and UTs during the pandemic and questions the governance infrastructure in the country, analysing the effectiveness of schemes and the general livelihood of the people in terms of Equity.
Growth and its Discontents
Growth in its multidimensional form encompasses the essence of access to and the availability and optimal utilisation of resources. By resources, PAI 2021 refer to human resources, infrastructure and the budgetary allocations. Capacity building of an economy cannot take place if all the key players of growth do not drive development. The multiplier effects of better health care, improved educational outcomes, increased capital accumulation and lower unemployment levels contribute magnificently in the growth and development of the States.
The Pursuit Of Sustainability
The Sustainability Pillar analyses the access to and usage of resources that has an impact on environment, economy and humankind. The Pillar subsumes two themes and uses seven indicators to measure the effectiveness of government efforts with regards to Sustainability.
The Curious Case Of The Delta
The Delta Analysis presents the results on the State performance on year-on-year improvement. The rankings are measured as the Delta value over the last five to 10 years of data available for 12 Key Development Indicators (KDI). In PAI 2021, 12 indicators across the three Pillars of Equity (five indicators), Growth (five indicators) and Sustainability (two indicators). These KDIs are the outcome indicators crucial to assess Human Development. The Performance in the Delta Analysis is then compared to the Overall PAI 2021 Index.
Key Findings:-
In the Scheme of Things
The Scheme Analysis adds an additional dimension to ranking of the States on their governance. It attempts to complement the Governance Model by trying to understand the developmental activities undertaken by State Governments in the form of schemes. It also tries to understand whether better performance of States in schemes reflect in better governance.
The Centrally Sponsored schemes that were analysed are National Health Mission (NHM), Umbrella Integrated Child Development Services scheme (ICDS), Mahatma Gandh National Rural Employment Guarantee Scheme (MGNREGS), Samagra Shiksha Abhiyan (SmSA) and MidDay Meal Scheme (MDMS).
National Health Mission (NHM)
INTEGRATED CHILD DEVELOPMENT SERVICES (ICDS)
MID- DAY MEAL SCHEME (MDMS)
SAMAGRA SHIKSHA ABHIYAN (SMSA)
MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT GUARANTEE SCHEME (MGNREGS)