Why You Should Care About Public Policy Ft. Pranay and Raghu

‘Anticipating the Unintended’, written by Pranay Kotasthane and Raghu (PR here onwards), is arguably the best Indian public policy/economics newsletter. Through compelling arguments, data-driven insights, and a commitment to bridging the gap between academia and the general public, their writings have successfully expanded the conversation beyond the echo chambers and into the mainstream, bringing critical policy debates to the forefront of public discourse.

So, it is no surprise that when the authors published their first book recently, “Missing In Action: Why You Should Care About Public Policy”, I just couldn’t wait to pick it up. And boy! It is profoundly engaging and delivers on what it promises to do, i.e., address the demand side of the problem by equipping Indian citizens on public policy fundamentals to enable them to:

• Hold the government more accountable.
• Sharpen demands from the government by appreciating the constraints within which it functions.
• Raise the level of public discourse.

The manner in which this book is written is inclusive, and it will appeal to the audience across the spectrum: from a lay person with no prior background in the subject to professionals who make a living from policy design and implementation. This book has something tangible to offer to everybody.

In this edition of my newsletter, I document six reasons why this must be your next read!

1. Be cognizant of your biases and actively unlearn: Policy-making can be counterintuitive. The book outlines eight non-exhaustive beliefs that most of us wrongly relate to. One such idea is ‘Good Intentions Translate to Good Policies’, which calls for disassociating the intentions behind a policy from its outcomes (welcome the demons of demonetization!). To explain this principle, PR give the example of the 1949 alcohol prohibition in Mumbai. A seemingly harmless and benign policy gave rise to the ‘underworld’ in the city, resulting in a strong police–underworld–politician nexus. It turns out that the rise of the likes of Varadarajan Mudaliar and Haji Mastan was the result of our poor policy choices. They write, ‘a ban rarely eliminates a problem; instead, it drives the market underground, turning ordinary citizens into criminals.

PR have intentionally showered the book with multiple India-specific policy examples that make it relatable.

2. For the love of cinema and shero-shayri: If you are a sucker for old Hindi cinema and some classic shayri, this book is for you!

Most of you would be familiar with the concept of ‘opportunity cost’. Starting from five public sector undertakings, the government runs nearly 1500 companies today, including a sandalwood soap manufacturing company. Here is how PR explain the concept of opportunity cost: “Kuch pane ke liye kuch khona bhi padta hai”. When the government uses its scarce capacity to produce your bathing soap, it comes at a cost. This book will make you appreciate these costs and how!

To describe our weak state capacity and the resultant deficit in providing critical public services, PR borrow the lines of the poet Mahesh Punetha: “Sadak, tum ab aayi ho gaon, Jab saara gaon shahar ja chuka hai”. They also use a cricket analogy to describe the Indian state, “if it were a cricketer, it would be like Vinod Kambli’s batting—brilliant, enigmatic, but mostly disappointing”. I am liberally cherry-picking these examples by giving limited context. You will be able to connect the dots better once you read the book.

3. How can we make sense of the beast, i.e., our state, and incentivize it to perform? The state plays an incommensurate role in the lives of most Indians; as Raghu writes in one of the chapters, “If you had cut me, then I would have bled State.” Given the state’s ability to impact our day-to-day lives, it is morally binding on us to know the nuts and bolts of its functioning. ?

We must question why is low capacity a ubiquitous feature of the Indian state, whether it is regulating, producing or financing. Why is our state big but not strong; why does development economist like Lant Pritchett call it a flailing State—not successful, nor a failed one either, but one that swings widely? Why is it that we can administer more than 25 million COVID-19 vaccines on a single day but fail to design a simple, broad-based tax policy?

If this book doesn’t refine your understanding of the state and, more importantly, builds your capacity to ask the right questions, I am willing to take the money-back guarantee!

4. Nation building and other big ideas: ‘Missing in Action’ is about big-picture ideas. I loved reading about Rawl's veil of ignorance, R. A. Radford’s seminal paper ‘The Economic Organisation of a P.O.W. Camp’, and the best of all, Benedict Anderson’s theory on nation-building and how accurately it applies to India’s reimagination project at the time of our independence.

How Nehru’s speech, the ‘Tryst with destiny’ where he mentions, “a moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds utterance.”, is following the first part of benedict’s three-step template of nation building. Tryst with destiny is “breaking from the continuum of history” and reimagining a nation by departing from the past.

How Dilip Kumar, a Nehruvian hero, also played a critical role in mainstreaming this reimagination through cinema. You will have answers to this and more!

5. The moral imperative for economic growth and efficient markets: The book takes a clear stand when it comes to taking on the old polarised debates of inequality vs poverty and using redistribution as the key lever to tackle poverty. I endorse PRs views that focusing on redistribution at the cost of growth will not work because the government will run out of people to extract from. PR rightly mention that “the economic pie is just too small at present to be able to satiate everyone.” Further, to emphasize the centrality of economic growth on poverty alleviation, they write, “there’s a thumb rule that highlights the importance of economic growth: every 1 per cent GDP growth in India can take nearly three million people out of poverty. This is why economic growth is moral, not just instrumental.”

The book also makes an unapologetic case for well-functioning markets and the implications of market-distorting practices like the Minimum Support Price (MSP).

The Punjab Preservation of Subsoil Water Act, 2009, prohibits paddy transplantation before June 15 to save water during peak summer. This results in delayed outputs leaving farmers with little time to clear the field for the next crop; due to which, the residue burning is not staggered, and all farmers end up burning the crop residue simultaneously. The result is the deadly fog that turns the capital city into a gas chamber. Ofcourse, the most fundamental reason why the farmers continue to grow water-guzzling crops in a water deficit region is the price signal known as the MSP.

6. The importance of institutions and economic history: The book citing the influential work of Daron Acemoglu and James Robinson’s, Why Nations Fail, Jared Diamond’s Guns, Germs and Steel, Francis Fukuyama, and many more narrates why and how inclusive institutions, property rights, and factors like geography matter in determining the growth of certain regions relative to others.?

One such case study is about the Kerala Vs Gujarat model and how the past is the most accurate predictor of their present. The book lays out the history of how the impact of Christian missionaries alarmed Travancore's progressive Hindu royal family, as a result of which they started heavily investing in public goods such as education and health. The Queen of Travancore inoculated herself and her entire family in 1813 to demonstrate her commitment to the public vaccination program. Between 1871–72 and 1946–47, the state expenditure on education and healthcare increased seventy-one and twenty-six times. With limited Christian influence, Gujarat, in contrast, followed a different path and continued to focus on enterprise, trading, and industrialization.

In essence, the institutions and history of these two states have contributed more to their social and economic status than what they are credited for.

Why should you read this book? I will let PR answer this question: “we have discussed our policy failures with passion because we believe in India, in what we have built so far, and what we could become in future. Indifference shouldn’t be an option for anyone who believes in India. It isn’t for us.”

I have taken detailed notes from this book. Please comment with your email id or dm if you would like them in your inbox. Until next time!

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