Development / 26.08.2011

By Anjum Altaf Is there an alternative to taking sides on the Anna Hazare controversy? Could one step back and gainfully employ an historical and institutional perspective to understand it better? Would it help to argue that the mismatch in speeds at which economic and political institutions have rooted themselves in Indian society is contributing to a disorienting disconnect between modern ends and pre-modern means? The supply and demand of goods and services is mediated through the economic market and Indians have been dragged into it whether they liked it or not; they had no choice. The theory of perfect and imperfect economic markets is well known. In brief, markets can exhibit friction, they can fail, and they can exclude large segments of the population without effective demand. In all such cases, the state has to step in thereby creating the interface between economics and politics.
Democracy/Governance / 19.01.2008

Reader Ali Sohail has pointed us to a paper (Second-Best Institutions) by Dani Rodrik of Harvard University that asks why "best practices" are an unhelpful way to think about institutional reform. The paper is about economic institutions but it complements very nicely the theme we explored in the last post regarding governance and pure democracy in developing countries—that the best can be the enemy of the good and that the best is often dangerously innocent of contextual realities. Here are some relevant excerpts from Dani Rodrik’s paper: The focus of reforms in the developing world has moved from getting prices right to getting institutions right… “Governance reforms” have become the buzzword for bilateral donors and multilateral institutions, in much the same way that liberalization, privatization and stabilization were the mantras of the 1980s.  But what kind of institutions should reformers strive to build?  Developing nations are different from advanced countries in...