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Sunday, April 11, 2010

The Quality of Political Governance Matters

I have always believed that governance explains most of the variability in economic development among countries, especially in the so-called developing countries.

These Excerpts from an article by Lydia Polgreen (published in the New York Times, April 10 2010) demonstrate the link between leadership and development so elegantly.

For decades the state of Bihar represented everything that was wrong with the Indian sub continent; a combustible mix of crime, corruption and caste politics in a state crucible that stifled economic growth.

Bihar’s economy, was dominated by impoverished subsistence farmers struggling through alternating floods and droughts, shriveled. Corrupt politicians who used divisive identity politics to entrench their rule were at the helm in Bihar.

But early this year, Bihar announced that it had sustained an 11 percent average growth rate for the last five years, making it the second fastest-growing economy in India.

How did Bihar turn around?

In 2005 Nitish Kumar was elected Chief Minister. Mr. Kumar replaced a previous regime of wily populist politicians. According to Mr. Kumar, the problem was that of a total lack of governance in Bihar.

Nitish Kumar first turned his attention to crime. Powerful men were arrested, many of them sitting members of Parliament. They were convicted quickly in fast-track courts, sending a clear signal that the law was supreme.

Then came the schools. More than 2.5 million school-age children were not attending classes; by 2010 that number was reduced to fewer than 800,000.

Next came the hospitals. Bihar had some of the country’s sickest, poorest and shortest-lived people in India. Clinics that had been seeing 1 patient a day because they had no doctors or medicine were staffed up and restocked.

Then infrastructure. Nitish Kumar loosened bureaucratic rules to move important infrastructure projects along more quickly. Distances that once took more than two hours to travel now take 30 minutes drive. And solar lights illuminate narrow lanes.
Bihar’s turnaround illustrates how a handful of seemingly small changes can yield big results.

To paraphrase Manmohan Singh, India’s Prime Minister, real change will comes through the right kind of local leadership, a forward looking, modern and compassionate leadership that strengthens the foundations of a society.

Bihar is an exemplary case study of how governance determines development. We can all learn from Bihar.

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