IN A country as big and poor as India, the scale of human need can seem daunting. Yet the immensity of the mountain is not the sole problem. Just as tricky is finding the best angle of approach. Alas, the vote-hungry politicians, stodgy bureaucrats, dreamy professors and opportunistic middlemen who often end up steering policy do not always succeed in making the most of scarce resources.
Take the town of Panipat in Haryana, a state that abuts the national capital, Delhi. Last year auditors from the central government found that it had dedicated 60% of its budget from Beti Bachao, a national scheme meant to correct gender imbalances by fostering and educating girls, to erecting a “themed gate” at the entrance to the town that proclaims Panipat’s bold commitment to this worthy goal. Such wasteful boasting is not unique. Since today’s national government took office in 2014 it has, by official count, spent some $643m (twice what the previous one did) on publicising its own programmes and achievements in TV spots, billboards and full-page newspaper ads that typically feature the smiling image of the prime minister, Narendra Modi.
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In other respects, however, Mr Modi’s government has worked hard to put public money to better use. A decade ago a government survey calculated that only 16% of funding for a national food-distribution programme actually reached the intended beneficiaries. Police found that between 2005 and 2007 in Sitapur, a district in the state of Uttar Pradesh, 100% of the money was stolen. Leakage from such programmes is now reckoned to have fallen to around 30%, and in some states to less than 10%. Mr Modi’s strong personal backing for social programmes has ensured impressive progress for many, such as a national campaign to eradicate “open defecation”.
But what if, instead of promoting favoured schemes, Indian governments instead challenged experts to propose the cleverest interventions they could think of? What if they then got economists to calculate, as objectively and scientifically as possible, their likely cost-benefit ratios? And what if they then compared these numbers and adopted policies based on which projects promised the biggest bang for the buck?
This, in essence, is the approach that the governments of two of India’s 36 states and territories are now considering. The model being used in Andhra Pradesh and Rajasthan, with funding from the Tata Trusts, a charity, was developed by a Danish economist, Bjorn Lomborg, and tested in countries such as Haiti and Bangladesh. Over the past year Mr Lomborg’s team has consulted hundreds of experts and interested groups, picked some 79 policies for consideration and commissioned dozens of economists to analyse them. If the pilot schemes work well, Tata Trusts would like to extend the process across the country.
A game of tag
In some respects the results from Rajasthan are predictable. Yes, it does pay in the long run to improve infrastructure, though the predicted payback of 1.2 rupees for every rupee spent on urban sewage treatment does not look especially compelling. No, the hugely expensive loan waivers that several Indian states have recently offered angry farmers are not a good idea, yielding benefits of less than one rupee for every rupee spent (see chart).
Some potential returns are astonishing, however. According to a paper that was presented by Nimalan Arinaminpathy, an epidemiologist at Imperial College, London, clever interventions to combat tuberculosis (TB), a disease that kills 30,000 people a year in Rajasthan alone, could bring a return of up to 179 rupees for every rupee of government spending. This is not because India makes no efforts to deal with TB. The trouble is that the government’s hitherto highly successful anti-tuberculosis campaign, the world’s largest such effort, is struggling to reach the country’s poorest and most vulnerable.
The rate of new infections could be cut drastically by enlisting private village doctors and chemists, using better diagnostics and seeking out cases in places where they are likely to occur rather than waiting for them to be reported. The biggest savings would come from a steep drop in future costs for treating patients with multi-drug-resistant forms of the disease, a group that makes up only 4% of TB patients but accounts for 40% of the government’s bill. Mr Arinaminpathy’s numbers are not fantasy; they are backed by robust statistics and match similar findings in Bangladesh. India’s government has, in fact, already begun to push its TB programme in the direction he has suggested.
Other proposals with big payoffs include computer-assisted learning, cheap treatment of non-communicable diseases and educating mothers on hygiene and nutrition. One paper suggests this last policy could be six times more beneficial than simply providing poor mothers and children with extra food. Noting that nearly three-quarters of all civil cases in Rajasthan’s courts have to do with land disputes, another paper calculated that over a 50-year period, the return from fully digitising land records could be 26 to one—and this in a state often praised for its efforts to improve the property register.
In Jaipur, the capital of Rajasthan, economists and officials at an event explaining Mr Lomborg’s findings were not universally enthusiastic. “There is nothing new here, except that we have tagged everything with a number, even though we may be comparing apples and oranges,” sniffed an elderly economist, who nonetheless thought the exercise useful. One cynical academic averred that politicians will always opt for showy handouts rather than unsexy long-term solutions, however inefficient that may be. A state official, perhaps mindful of approaching elections, blithely declared that all this fancy research simply proved that the state’s government was already doing everything right.
Mr Lomborg himself appeared unfazed by the sniping and politicking. “We’re not trying to change the world,” he said. “It’s enough just to nudge the conversation towards the rational end of the spectrum.”