If only economists could be like dentists

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: Discussions about governance in India repeatedly turn into discussions about individuals. The Delhi Metro happened because of E Sreedharan; Sebi works well because of CB Bhave; education malfunctioned under UPA I owing to Arjun Singh. Why did urban governance in Surat or Nagpur work well? A few key individuals fixed the problems. If this is the core issue, it puts a huge burden on the appointments process.

Economists are trained to be unsatisfied with explanations based on individuals, and look for deeper sources of dysfunction. The story that an economist would tell is one where India has bad elementary education because Sarva Shiksha Abhiyan has basic design mistakes.

How would we make drinking water in Bombay work well? An emphasis on personalities would demand finding the right person to run it. How does this happen in advanced economies? The typical small town in an OECD country—and in many developing countries—has 24x7 supply of clean drinking water in the taps. This isn’t done by having a miraculously effective appointments process. There is a fairly humdrum process of recruiting fairly ordinary bureaucrats into water utilities, or contracting out to private utility companies, and the job gets done. In OECD countries, 24x7 clean drinking water in the taps is not exotic rocket science. It happens all the time, because the deeper institutions are structured correctly.

This is clearly the scalable path. A few good successes in the appointments process might achieve 24x7 drinking water in a few towns. But the real story is clearly deeper. It is about getting to an institutional mechanism that can be rolled out all across the country, which will deliver 24x7 clean drinking water in 5,000 towns.

Institutional change is hard, and all too often there is a temptation to paper over a dysfunctional institutional mechanism by demanding top quality leadership, which will produce good outcomes despite bad institutions. A good judge will overcome all problems in the legal system, work hard, process a large number of cases per month and deliver good judgments against the odds. A good doctor will rise above the terrible problems of a government hospital and heal patients all the same. These individuals are revered, and rightly so.