Ideas of India is a new podcast in which Mercatus Senior Research Fellow Shruti Rajagopalan examines the academic ideas that can propel India forward. You can subscribe to the podcast on Apple, Spotify, Google, Overcast, Stitcher, or the podcast app of your choice.
In this episode, Shruti spoke with Vijayendra “Biju” Rao about his 2018 book with Prof. Paromita Sanyal, Oral Democracy: Deliberation in Indian Village Assemblies. Rao is a lead economist in the Development Research Group of the World Bank. He is also the leader of the Social Observatory, an effort by the World Bank to improve the adaptive capacity of anti-poverty projects. Rao studies the social, cultural and political context of extreme poverty in developing countries using methods from anthropology, sociology and political science. Their book an excellent study of citizens’ voice in India’s Gram Sabhas or village assemblies, which are also the largest deliberative institution in human history. Shruti speaks with Biju about deliberative democracy in India, federalism and local governance, conducting ethnographic research, working as a development economist, and much more.
This transcript has been slightly edited for clarity.
RAJAGOPALAN: Hi, Biju. Welcome to the show.
RAO: Hi, Shruti, so nice to be here. Thank you for inviting me.
Voice and Loyalty in Local Government
RAJAGOPALAN: Normally when we think about local government, the focus for economists is on one of a few things. And it’s typically related to exit. And one part of it is the literature that flows from Tiebout on voting with the feet and competition between local governments for public finance. The other is exit dictated by the political or the voting process, where we’ve replaced elected government representatives. What I found really interesting about your book and your and Paromita‘s point of view is, here you’re thinking about a local government institutional design which is not focused on exit but focused on voice and loyalty.
RAO: Yeah. That’s a very nice way of putting it. Hirschman is one of my favorite social scientists. Let me put it slightly differently. Standard models of democracy, standard ways of thinking about democracy focus on exit, not just by economists but generally the literature. And the literature on democratic accountability comes from there, and so on and so forth. But what we find . . . I did a review of the literature in a book called Localizing Development, about eight years ago now. And what we found there was that electoral democracy is much more effective when it is complemented by deliberative democracy. And of course, they are both—electoral and deliberative democracy have mechanisms to aggregate preferences at the end. Elections, we do that by electing a representative who votes for us, and deliberation when we persuade others of our point of view. And we come to a common understanding.
So that part of how deliberation works is really about voice. It’s really about who speaks, how they speak, how they persuade and how points of view start coming together. And the loyalty matters here for two reasons. Firstly, it’s an embedded institution. It’s not going anywhere. So it’s a constitutional amendment, and you’re an expert in the Constitution. And so, folks slowly start making the Gram Sabha, which I’m talking about the village meetings in India, part of the ritual of their everyday lives. And that also requires a loyalty commitment, an institutional commitment from the highest state—because this is a local state we’re talking about. So loyalty at two levels then builds institutional embeddedness. So those aspects, the constitutionality of it, and therefore turning it into a space for the free expression of voice. And we hope, over time, a level playing field for the exercise of voice starts becoming very important.
RAJAGOPALAN: And what I find interesting about this is normally, when we think about the voice-exit-loyalty paradigm, voice and loyalty are typically considered bottom-up emergent institutions, right? So the voice and loyalty come from the bottom, and they affect change in the institutional structure from the top in a particular way. But what is interesting about what you point out is that the top-down institutional design, which is created by the 73rd Amendment, creates this kind of bi-directional relationship where there is some new kind of loyalty which comes out through the deliberative and participatory process. Do you think that’s a fair assessment of the project?
RAO: Yes. But let me just put it slightly differently. The way I like to think of it, to use Jonathan Fox’s term of a sandwich, the bottom has to meet the top. And that’s what makes these institutions work. Right? Just doing it on one side alone is not effective.
RAJAGOPALAN: There are two major themes in your book, and you talk about how the discursive exchanges in the Gram Sabha center around two dimensions. So one dimension is the distribution of public goods and personal goods. And we’ll talk about that in a minute. And the second is one of performance of recognition and dignity. One really peculiar thing about the Indian federal system is how centripetal it is. And the worst casualty of that has always been local governments. And despite the 73rd and the 74th Amendment, we are still extremely centripetal in terms of the subsidy and welfare entitlement structure.
So a very large part of it comes through centrally sponsored programs from the union government. And then there’s a second part of that, which comes from state government programs and is let to trickle down further. Now, when I read the transcripts that you discuss in so much detail from the Gram Sabha meetings, there’s a lot of discussion that is focused on making sure that individuals actually get the entitlements that have been promised to them, right? And this is whether it’s the NREGA or the ration card or the below-poverty-line cards. These are directly, in some ways, personal goods, public goods, which have directly been promised to them. And there is much less discussion on collective action or cooperation or other forms of deliberation. So my question is, how much of a change would there be in the deliberative nature of the Gram Sabha if it weren’t so centripetal? That is, what would change if the welfare and the subsidies and grants didn’t come straight from the top?
RAO: Right. That’s a deep question. There are several aspects to it. Creating a new political institution takes a lot of time. And the 73rd Amendment was passed in 1992. And these recordings now in older democracy in the book are quite old. I recorded them between 2002 to 2004, before NREGA, actually. So, we’re just about 10 years after the 73rd Amendment. And it was just beginning to become a thing.
The central government at the time had started all these schemes that they were dispatching through the Panchayat system because they wanted to strengthen the 73rd Amendment. Those schemes were individual benefits schemes, rather than schemes for public goods. Therefore, naturally the discussion was focused on that. “My name is not on the list, give it to me. Why did that person, person X, get the house when I didn’t get it?” That kind of thing. It’s also consistent with a pretty big literature now in economics that shows that clientelism and clientelistic systems result in an emphasis on private rather than public goods. So, we are completely consistent with that. And we see that all the time.
What has happened . . . and I’ve been doing, working on this now. Subsequently, I’ve got recordings from the state of Tamil Nadu in 2014. I’ve been looking at Karnataka now for 20 years, including as we speak. Things are starting to change. So the discussion is becoming more and more about public goods for a couple of reasons. Firstly, the central and the state governments are giving allocations for public goods. For instance, Karnataka had something called the Gram Swaraj project, which is 12 lakhs, 1.2 million rupees for every village, for the construction of public goods, not private goods, A. B, panchayats have slowly started to learn how to collect tax revenues of their own.
RAO: Yeah. Which are all about public goods allocation. The tax revenues that the panchayat collects from land, records and so on are not really for private benefits. Third, state governments are also starting to allocate resources towards public goods. So, there are three sources of revenue still centripetal largely in how they allocate funds. But the emphasis is slowly changing, and people are getting more sophisticated in how they discuss collective action as a result of that. Yeah. So give it time and it’s going to become more that way, is my view.
RAJAGOPALAN: So, typically local governments can either raise their own revenue through property taxes and so on and other fees, or they can rely on intergovernmental transfers. And historically in India, other than some of the big municipal corporations, almost all the local government revenue has come from intergovernmental transfers—or rather, has not come from intergovernmental transfers because so little has been devolved to Panchayati Raj Institutions and Urban Local Bodies.
Now I have a slightly different question linked to deliberation. Imagine a world where, let’s say, a really mature Gram Sabha system like Kerala, which is already very successful at devolving funds, moves towards a system where they’re no longer relying on devolution, but they get their own revenue-raising ability. They strengthen it. And most of their spending comes from local taxes. How does that change the second aspect, which is really big in your book, which is performance of recognition and dignity?
Now we are suddenly entering a world where the marginalized are not participating directly in this personal talk, as you call it. “Where is my BPL card, and where is my NREGA card?” And they are likely, by reasons that they’re not landowning or because they’re poor, not likely to contribute to local taxes in a big way. What does that Gram Sabha look like, if you were the type to speculate or bet on that world?
RAO: We don’t have to speculate because it’s actually happening. Kerala panchayats have increased the ability to collect revenues at the local level. Not just because they have the power, which they all always did, but also because people are beginning to trust the system more. And so, they’re more willing pay. Yeah.
Similarly Karnataka, if you go to peri-urban areas of Karnataka, which are close to big cities but are under the panchayat system, you find in some panchayats 80% of the revenue is coming from taxes generated at their level. So things are changing. At the same time, those benefit schemes are still there. The NREGA is still there. The housing schemes are still there. Right? So what you find is the discourse sort of getting more hybrid. Yeah. I’m not done with these, an actual research on this yet. But I’ve observed some of them. You find the discourse getting a little more hybrid with both discussions on public and private goods.
What is interesting is that this is going along with a shift in the political economy of caste. Because what’s happened also is that we can attribute it to many different things. I may be a development economist, but I’m not a big one for specific causal attribution, right? So I think there are multiple causes here. The reservations make a big difference. The reservation to lower castes makes a big difference.
But there is also an increased shift . . . actually, we’ve been tracking 20 panchayats in Karnataka on this for 20 years, Kripa Anantpur and I, but this is coming out. Lower-castes, Dalits are slowly beginning to acquire direct political power rather than derived political power. And what is happening with that is, the discussions in public goods allocation become about playing politics, right? And the Gram Sabha starts slowly becoming a space where people . . . For that I’ll give you a very . . . The story will illustrate this.
I was in Karnataka about five years ago, in Bidar district. And there was a school which had . . . It was functioning, and there was a big village water tank next to the school that was about to collapse. Yeah. Nobody was paying any attention to this. Now, we started an intervention. We’re just trying to get people to participate better. And one of the things that intervention did is start something called a Makkala Gram Sabha, the kids’ Gram Sabha, that would inform the larger Gram Sabha. That has now become a thing in Karnataka. It’s all over the place.
RAO: Kids got together and said, “Please don’t let that water tank fall on our heads.” And immediately the thing was fixed. We’ve got a paper on this called “Anatomy of Failure”; we talk about these things. These slow shifts in how Gram Sabhas are functioning are wonderful to see—the evolution of the system. But when we recorded it, did those recordings in 2002, 2004 for the book, individual benefits was still the primary focus.
Indian Women in Local Politics
RAJAGOPALAN: So you are not worried particularly about, as they become more fiscally responsible and self-reliant, that Dalits or women are going to lose their voice?
RAO: I’ll tell you why I’m not worried. Because I have seen the evolution in Karnataka, I’ve seen the evolution in Tamil Nadu, and I’ve seen the evolution, interestingly, in Bihar, where we have been doing with women’s self-help groups. Of course, there’s an awful lot of discrimination. Women talk less; they are listened to less. Dalits tend to be paid less attention to. But that is getting more equalized over time. There is actually the hard evidence of that. So, that’s why I’m not worried. There are two reasons for this. One is reservations, which I think have played a big role in changing the nature of local politics.
But the second one, as far as women are concerned, is the women’s self-help group, the national rural livelihoods mission. It’s all over the country, and it’s literally a movement. It’s an engineered movement. It’s not necessarily come solely from organic civic action. It’s coming because central governments have wanted it to happen, with the help of the World Bank and other places. The gathering together of often lower-caste women also changes the nature of projects. They start running for office. They start demanding things. Sometimes, unfortunately, to the exclusion of things that may be also of general interests, it all becomes about women’s issues. It sort of crowds out other things. That’s the other problem. So, I’m not at all worried about things getting less equal. I’m perhaps more worried about things, usual things like efficiency and so on. But I’m not worried about equity.
RAJAGOPALAN: One thing you mentioned, which is very interesting—and it’s also there a little bit in the book and some of your other papers—on how the existence of women participating in self-help groups in the same districts actually makes them more deliberative in Gram Sabhas. Even though these are two completely different spaces, right? So what do you attribute to . . . is it learning by doing? That you’ve learned to deliberate in a particular context, and you’re taking some of that learning into another context? Or has it got to do with no space existed before?
RAO: I think there are three things going on. The first is what you said, your first point, which is that women belonging to groups start learning and start having the agency to express themselves in those group meetings. Deliberate amongst themselves, not in the private sphere but in the public sphere. Yeah. So you’re creating a public sphere where women are welcome. The self-help groups do that.
The second thing—and that’s, I think, terribly important—is the role of the state governments. Because, at the end, this is a state government story, in how much they integrate women’s self-help groups within the panchayat system. So for instance, in Tamil Nadu and Kerala, the president of the village is the de facto president of the women’s village organization. You see? That means they have to talk to each other. In Andhra Pradesh, it is exactly the opposite. The women’s self-help groups take over everything. That convergence is terribly important, because then there are actually funds that have to be discussed and issues that have to be discussed, bringing them together.
The third thing is that—and this is the process we observed in Bihar and we wrote about, Paromita and I, again. As women start coming together, they are seen as an independent political force in the village. Women become the political force, not caste—and often poor women—and are therefore able to . . . They become a vote bank. You have to start listening to them. And that gives them the space to talk, and then they start running for office and slowly start getting embedded in the political structure. So there are three processes going on because of that. But the support, or again, the sandwich idea, the support of the higher state in facilitating that is very important.
Identifying Beneficiaries in a Welfare System?
RAJAGOPALAN: Now, one of the things I wanted to talk about was the interaction between means-tested subsidies and entitlements, which are given to the poor. And there’s a huge discussion going on right now about how India must move away from this. So, one way where people are talking about it is some kind of a quasi–universal basic income to be given and scrapping all the policies. The other is, instead of giving women LPG or 10 kilos of rice and dal, you switch to a direct cash transfer. How do you think this is going to change the process of deliberation at the local level?
Now you are no longer fighting, using rude talk or personal talk and saying, “You promised me I was supposed to get an LPG cylinder six months ago, and I still don’t have it,” and so on and so forth. So in some sense, I feel like these subsidies have played a huge role in the way the deliberation, in bringing more people in to participate. Do you, again, fear that as we switch the welfare system in India, an unintended casualty would be the deliberative process?
RAO: That’s a good question. Again, I’m not fearful. And let me explain why. The proxy means-tested method is itself—even in our book, we talk about it—not always been the norm. Remember, when we wrote that book, from 2000 to 2004, BPL lists had to be vetted in the Gram Sabha. The BPL status, the below-poverty-line status is determined by some sort of silly survey that the government instituted. And they created some silly score, and you arbitrarily got this score or not. But there were always errors of exclusion and errors of inclusion. Therefore, that list had to be cleared by the Gram Sabha. And a lot of our debates are about, “Why the hell am I not in the list? Why is she on the list?” So that debate goes on. And that, by the way, that community-based poverty targeting is a central feature of the NRLM or the natural rural livelihood mission…. They call it the PIP, the participatory identification of the poor. That’s a very central feature.
Now, the second thing is, there will be . . . The NREGA still remains the biggest sort of poverty program in the country. Right? And that is self-targeted, so there’s no issue of targeting that. Because you go there, if you want to go, and you’ll get your guaranteed income. But there are issues with whether you have received the money. There are issues whether the bank account . . . issues remain. They haven’t disappeared. Those are discussed in the Gram Sabha and in social audits and so on.
The third thing is that as panchayat systems mature . . . we’ll just take a slight aside. In Karnataka, because of COVID is that finding that rural areas are doing better than urban areas in dealing with COVID, simply because the panchayat system exists and the panchayat system is allowing governments to function better. There’s a sort of ethos that allows more efficient allocations, support better, testing better, even social distancing is better. Now, what is happening with that is every other ministry—not just the RDP, Rural Development and Panchayati Raj Ministry, but every other ministry—is saying, “My God, the panchayat is a good system. Let’s give more power to it.” You know? So, that realization is coming in more and more.
And as a result of that, I think what you’ll find is, going back to my earlier point, this could be a lot more public goods allocation by the panchayat system. The building of infrastructure, dealing with school construction, even at some point—Madhya Pradesh was doing this—hiring and firing of teachers. That all of those are slowly, I believe, going to be given panchayats more and more because ministries are going to see that that’s the best way of doing things.
So, the deliberation will then shift from “I didn’t get the private goods” to “How do we allocate the public goods better?”
The Role of Technology in Development Policy
RAJAGOPALAN: And that’s of course the ideal circumstance. What I found very interesting when you were talking about the inclusion-exclusion problem is, once again, the Union government’s focus is always like a top-down, technocratic approach. So the way the development experts and the Union government thinks about this problem is, “Let’s bring in a technological solution like AADHAAR, right? We can biometric everything. And that is going to remove our type one–type two [errors], inclusion-exclusion problems.” And it doesn’t, because it is not backed by any other kind of institutional process. And it doesn’t facilitate any kind of feedback. You can’t talk to a biometric machine, right? At the end of the day, it has to be human beings who need to be responsive and who need to actually fix the problem.
So, what I find really interesting is, there is a pre-AADHAAR model for eliminating inclusion and exclusion errors, which is actually not technocratic, which is completely bottom-up. And in one way, there is lower corruption. There’s greater public scrutiny because the unfairness of your neighbor getting something that they do not deserve because they’re actually not poor, or they don’t qualify for the LPGs . . . I mean, that unfairness just comes through in the rude talk so clearly. When you look at the transcripts, it’s very difficult to substitute that or bypass that, in any way.
RAO: So, that’s a bigger question about what’s the role of technology in participation and deliberation. How do they play together? And I have become a firm believer in that they are not substitutes but complements. And the question is, how do we make them better complements? So one thing that I’ve been very interested in—and I’ve been, again, working with the Karnataka government on, Tamil Nadu government, and we’re doing it in Indonesia, and I am going to start doing it in Nepal—is to find ways of giving village communities the ability to collect their own survey data. We call it participatory tracking. Technology makes it so much easier. So we give them tablets; we develop systems by which there’s a very simple questionnaire that they follow through. Their household questionnaire is that they do. And we did that in a pilot of 40,000 households in Tamil Nadu, and it worked beautifully.
And now we’re developing it for public goods, where there is a digital map of the village. And then the village community start rating and provide report cards on the quality of public goods, and on common property resources as well. All of that is then, importantly, mapped on visualizations that are presented in the Gram Sabha so that they start seeing their own data themselves. And of course, we’re doing it at every village. You can do a census every six months if you want.
There are lots of users of technology that are entirely complement to this. And I think AADHAAR can also be used that way because AADHAAR system is there; the country seems to want it with all the caveats. But deliberation, Gram Sabhas, with the AADHAAR together will work very much like proxy means on the AADHAAR and the deliberation process together. It’ll make it better. That’s the way we need to start thinking, rather than this way of thinking, which unfortunately still exists, of an either-or choice. The binary. “Solve the corruption problem by sending money directly there.” Well, people are very smart. They will find a way of getting around that unless there is collective action involved where people are, because of their own interests, countering that.
RAJAGOPALAN: I completely understand your point of walking away from binaries, but there’s also another point about how we view a system, and usually the union government systems. The farther away one is from the ultimate unit of governance, or the citizen who the governance is being served or provided to, the more technocratic and the less human the solution. So there is an element of that.
But the other thing I found very interesting about what you said about the Panchayat surveys is that as we strengthen the Panchayati raj system and the Gram Sabhas, now we can actually move towards creating an organization which can correctly issue birth certificates, correctly issue death certificates, do land titling surveys. These are three areas in which Indian governance has just completely collapsed. Less than 40% of Indians have the birth certificates. It linked to the larger technocratic point because the Union government solution is always, “Let’s start a national population register, which will be updated every 10 years, or a national citizens register, the other controversies notwithstanding.”
The solution, even with the best of intentions, tends to be something dramatic like that. “We need the singular sort of filing system,” almost. And what you are saying is, there are some districts in Tamil Nadu which are very good at recording births and deaths. And maybe there the problem is that the water tank is going to collapse on the school. And so the local level, both in terms of knowledge and the feedback, are actually the best to solve these sorts of problems.
RAO: Yeah. It’s a standard. I think Buchanan, actually, since you’re from George Mason, spoke about a long time ago. The problems need to be solved at the level at which there’s the most information and ability. It’s a standard issue. What is interesting about your question is that that is exactly the plan of the Karnataka government right now. They’re moving towards having the birth records done at the local level, that land records done at the local level, with the Panchayat system, and trying to find ways of making that happen more accurately. Kerala has also moved in that direction. It’s because, as you know, the Constitution allows a lot of freedom to states and how they use that amendment.So many states are moving in that direction.
Interestingly, Nepal is moving in that direction too, big time. Indonesia is moving in that direction, which is why I’m working with them. For a while, Colombia was moving in that direction. Mexico is moving in that. It’s a worldwide phenomenon; China does it routinely.
Urban versus Rural Governance
RAJAGOPALAN: I want to now think about how some of the insights that you talk about in the book when it comes to Gram Sabhas in the villages . . . what we can learn from that in terms of urban governance and urbanization more generally. The 74th Amendment, which created the Urban Local Body infrastructure, did not provide for a participatory or a deliberative forum like the Gram Sabha. Nothing exists there. So that’s one problem. The second issue here is also, we have misidentified how urban India really is. And there is some interesting research on how they said these definitions in 1992, and they said every 10 years with the census there will be some kind of updating on what is an Urban Local Body and what is a Panchayati Raj Institution.
And between these censuses, there is a very large part of India which has been urbanizing, which is in a way undercounted. Now, keeping these two broad trends in mind, and the fact that India is urbanizing, how would one think about designing an urban deliberation forum that would get something similar, or at least mimic what is going on in the Gram Sabha? How would you think about designing an urban local participatory forum? Because it doesn’t exist right now, and it’s up for grabs in terms of design.
RAO: Yeah. Great question. Let’s go with the fact, with the COVID fact. The COVID fact is [that] rural areas, despite all the migration that’s come from urban migrants moving back to rural areas, are dealing with COVID better in India then urban areas, particularly the large metros. This the fact—other than exceptions like Dharavi and so on.
Well, one reason for that is the Panchayat system. And it’s not just the Gram Sabha; it’s the fact that there is that Panchayat that is a government structure that can cater to a relatively small population in a way that can be monitored and people can be held accountable. Urban areas do not have that. Urban areas, on the other hand, particularly larger metros, are subject to all the dysfunctions of government that we all know too well.
Now you’re asking, what is the model? What is the alternate model? There are actually several alternate models already there. A, resident welfare associations in larger middle-class and upper-middle-class urban communities showed that there’s an enormous capacity for participation. Then you go back in 2000, Michael Woolcock, Saumitra Jha and I spent a lot of time in Delhi slums. And what we found is that in the poorest of these Delhi slums, many of them unregistered slums, people were participating like crazy. They were creating their own elections. They had their own endogenous elections, and they were electing the Panchayat leader. They were sort of demanding services, but they knew all the MLAs and the MPs better than I or anybody else did, and they were constantly going after this. That work now has been shown by Adam Auerbach in a new book, Demanding Development.
There’s an enormous capacity for this. Janaagraha, a very nice outfit in Karnataka, has for a long time been working on urban participation, on developing what they call Ward Sabhas. Ramesh Ramanathan has a nice paper in the EPW on this subject, but came back from 10, 15 years ago. So there’s been a lot of thinking; there are a lot of models out there. There’s a lot of capacity out there. All it requires is governmental will.
That there’s a lot of capacity for participation, and that these institutions can be easily built, and we can have Ward-level Sabhas so they don’t go crazy. Within a smaller community, you can have these decisions allocated and decentralized and build it up, like Kerala does, in a nested structure to higher systems of planning and monitoring. All that is eminently possible. It requires, ideally, a new 74th Amendment. And I think all political parties need to agree to this. There’s a hesitation. All political parties were behind the 73rd Amendment. No political party is behind amending the 74th Amendment. The reasons for that, you can guess.
RAJAGOPALAN: There is a fundamental difference between urban living and rural living, and urban living just has a lot more congestion, but people tolerate it because the gains from living in urban areas are just so large. One of the things I have observed with resident welfare associations in Delhi, and that’s sort of the place I visit the most, is just the nimbyism. There is a very high degree. In fact, now they are converting public areas into private areas. Everywhere in Delhi, especially the posh colonies, they’ve turned them into gated communities. The public park is now only for the people of that street to use. No one can just enter. They’ve actually privatized public roads. So are you at all worried that the nature of urban living is different? And if it creates these ward-level forums and strengthens resident welfare associations, there is a true fear of nimbyism and not letting outsiders in and not letting poor people and migrant labor in, and so on so forth.
RAO: I think there’ll always be nimbyism. You can’t escape that. Switzerland, which has its own wonderful deliberative system, there’s a lot of anti-Persian nimbyism. They just said a few years ago—banned mosques and so on. So there’s a lot of that going on. But the current system, where urban governance is so ineffective that it forces local communities to basically cut themselves off from government and form their own governments—it’s not the solution. That’s what you see in Bangalore, which is my city. You find communities generating their own water and electricity. You find communities, IT communities particularly, completely saying, “We don’t want the city to interfere. We’ll collect that. We do our own work.” That’s not the answer. That’s privatizing the state, as you point out. In my view, a nested system of planning, borrowing from the . . . Remember, Kerala Panchayats are effectively cities. These are not rural areas in the way we see them.
RAJAGOPALAN: Kerala is now 100% urban, if you take the definition . . .
RAO: It’s 100%, and it’s got famously the best Panchayat system in India, right?
RAO: Just lift that model and bring it to all the urban areas of India, where there’s a nested system of planning going from the street to the ward, to maybe a part of the city, then to a neighborhood, from the neighborhood to the whole city, where there’s an integrated system of planning and monitoring, and the sandwich process works. As I said, the models are out there. There has to be political will. So I am not at all worried that if done right, that it will at least assuage some of those issues, the need to separate from the larger state and to create your own private state.
RAJAGOPALAN: Alex Tabarrok and I wrote about the city of Gurgaon, and we called it effectively a private city, India’s first private city, because they’ve sort of bought out of state-generated electricity, state-provided roads—even their own metro is financed, so on, so forth. And while that may sound like pure panacea, one of the things we pointed out is, it poses huge externalities because the private enclaves are really small. So what one sees is there is perfect garbage pickup, and sewage is provided within the DLF enclave, but then they go and dump all of it on the public land, which is also where the poor people are living in slums.
Every single IT park generating their own electricity and running their own borewells has created huge problems of depletion of the water table and air pollution, and so on, so forth. So even the privatization is happening at such a low level that it’s actually not efficient. It’s not like a functional private city where it’s completely different from the state, or they have the ideal nature of competing private cities, or something like that.
RAO: All correct. Happens in Bangalore as well. Gurgaon has the additional problem that because the connecting roads are dealt with . . . but the real estate, they don’t care about Gurgaon. And hence every Gurgaon household now wants to buy a boat. So there are larger problems that are happening.
RAJAGOPALAN: Yeah, once you leave the beautiful private enclave, you just go from panacea to pothole.
Deliberation and Dignity
RAJAGOPALAN: One large big question that emerged from the book . . . and we didn’t go into your method, which is actually very interesting. You’ve picked border districts across states which share a common culture, common language and a common administrative past until 1956, and then they got separated into different administrative states. One example is, let’s say, Coimbatore and Palakkad. And Coimbatore is now in Tamil Nadu, Palakkad is now in Kerala, but historically they both been Tamil speaking. And there’s intermarriage, and there’s families living across these districts. They have this rich history, but now they’re in separate states. And here you point out that there is a big difference in how they deliberate. So even though Coimbatore has medium state capacity, a medium level of fiscal devolution, and so on, Kerala is of course higher; therefore, Palakkad does a little bit better.
There is quite a big difference in how they actually deliberate. Now one aspect of this that emerges from your book is because the state systems are designed differently, and Kerala is just a more mature Panchayati raj system. The other part or question I had on this was, do you think, once again, this has to do with learning by doing? That, Panchayati raj institutions, deliberative processes, you cannot do them by mimicking them. There is only one way to build this capacity, which is by doing it and doing it better over a long period of time. And Bihar can’t just easily borrow from Karnataka’s successes any more than Coimbatore can borrow from Palakkad successes.
RAO: Yes. But it again comes back to institution embeddedness, that there has to be an incentive to learn by doing. If the only way that you can deal with the state is by belonging and participating in this institution that now you’re stuck with for the rest of your life, you can start doing it better. And it also changes the political culture, and it changes the nature of how people interact with each other.
One of the most wonderful things about going to Gram Sabhas is the fact that different castes have to now operate in the same space that they would never have done 30 years ago. They have to talk to each other. They have to deal with the politics of each other. Genders have to mix. All of that change happens because the institution embeddedness of the system, the Constitution will not let it go away. And then the State Government Act only shows that it’s there; it’s not going away either. Once that comes, people start participating. They start learning by doing. That follows the institutional embedding, so you’re absolutely right. There’s something quite wonderful.
RAJAGOPALAN: And there’s great paper by you called “Dignity in Discourse [with Paromita Sanyal],” which talks about some of these changes, where you’re really talking about the sort of—I won’t say exactly change; of course there’s change, but also like a shift in the actual dignity, which is linked to the performative aspect, which is imposed by the state through the Gram Sabha. That part, which you outline, is really lovely to see both in the case of caste and the case of women.
RAO: Yeah, you know what? To me, my favorite example from that paper, and also the book, is the story of a village in Karnataka which is going through drought. And the lower caste lived at the bottom of a hilly area while the upper caste lived in the top of the hilly area. And the Gram Sabha was all about the lack of water. The wells were all dry and so on. And so the upper-caste guy was saying, “There is no water in our wells. How are we going to get drinking water?” And the lower-caste guy who lived downhill, and therefore his well had plenty of water, said, “You’re welcome to come to my well and take the water,” knowing fully well that this guy wouldn’t come.
So yes, acquiring dignity to the deliberative space is, I think, firstly, eminently logical it would happen, but it is again tied into this integration of the electoral and the deliberative spaces working together. Because if the politicians were not so worried that if they piss somebody off, they would not get their votes, they would not allow that space to function in the way it does.
Mixing Disciplines and Mixing Methods
RAJAGOPALAN: There are two ways in which your work really stands out, and one is the interdisciplinary nature, and the second is mixed methods. And the two are related, but I still want to talk about them a little bit distinctly.
First, I wanted to talk to you about . . . you work deeply in an area called anthropological economics, so what is anthropological economics? How do you view it as similar or different or adjacent to standard neoclassical economics?
RAO: I’m a 1930s economist. It’s almost like I’m a student of Alfred Marshall or somebody. Alfred Marshall has this wonderful word – conjuncture – which he talks about the principles of economics, which is basically how economic activities embed between the social, political, historical structure. And he talks a lot about how in conjuncture is so important to understand.
In our desperation to get tractable models, we sort of got more and more divorced from reality. And to me, that’s fine in the following sense: discipline will have its journey, all disciplines have their journey, and slowly now you’re finding economics journeys moving away from that in 100 different ways, which is fine. That’s the discipline’s journey. But when I started my PhD in 1985, I finished in 1990, I wanted to be a policy economist. I was starting my life in academia, but I wanted to really work in policy. And this particular fact I felt was very important, which is that policy can’t wait for economists to figure it out.
So I was lucky to get a job in the World Bank research department, which didn’t require me to publish in top journals all the time, in fact to work with projects that were doing these kinds of things. So it gave me the luxury to sort of say, “I am going to try to understand the world as it is, not as a journal referee wants it to be,” which has led to my doing the kind of work I do, which by the way, is not necessarily considered mainstream at the World Bank either.
The second thing that I felt was missing in how economist did work . . . which is getting ironically slightly better now because of the RCT revolution. The RCT revolution, we all know about those debates. But one of the things that it’s done is that it’s forced development economists to go to the field more. When I got my PhD, development economists never went to the field. They would pick some secondary data; my dissertation, for instance, was written with the ICRISAT data. ICRISAT had something like 200 households. You know how many papers and dissertations ICRISAT has produced from this 200 households? About 1000.
It’s a very old form of “degrees of freedom” problem. You have four times the number of papers produced than number of observations. So people didn’t collect their own data, and I was deeply inspired by people like Dandekar and [PV] Sukhatme and Pranab Bardhan and Ashok Rudra, all these great Indian economists who were field economists. That was something that really inspired my approach to these things. Scarlett Epstein, let’s not forget her.
RAJAGOPALAN: You said what you do is not mainstream, not even at the World Bank. I just want to tell you what you do is extremely mainstream at George Mason, because we are a tradition of Adam Smith and James Buchanan. One huge influence on the economics program is the work of Vincent and Elinor Ostrom.
RAO: Of course.
RAJAGOPALAN: I see that a lot in your work. So anytime you want to feel very mainstream and cool, you should just drive across the river and come by.
Human vs. Machine Methods of Textual Analysis
RAJAGOPALAN: Very early in the book, you talk about how you abandoned standard machine textual analysis, and the reason why you abandoned it is that it simply does not work. Even after translating the Indian languages to English and then running them through the software, you’re not really getting very much out of it, and you’re certainly not able to get broad themes. And the only way to do the kind of analysis you’re doing, which is to really open the hood and look at the deliberative process, is you ditch all the software, and you roll up your sleeves, and you go over transcript after transcript after transcript. So of course, there’s the method issue there, which is informed by how Indians speak, but what the output that comes out of it is also really interesting because of the way you categorize the conversation.
Whereas the way you do it is a little bit different, which is, are people talking personably, are people talking rudely, are people talking in a participatory way, are they talking using a language of planning or are they talking using a language of claiming and entitlement? And I find that very uniquely Indian. This is sort of like the Argumentative Indian that Sen talks about come to life. Because the only way you can see that Indian-ness is not through the textual analysis, it’s through everything that is behind the words that are being said. Is this me just stretching this too far? Or do you think that’s what’s going on?
RAO: You’re missing a very important element written by Paromita Sanyal, my coauthor and sociologist, who is a very deep reader of text, unlike me. I find it difficult to pay attention to something for too long. She’s very good at that. It took us 10 years to do the analysis for this book, 10 years. So the deep learning, as it were, of reading every line and categorizing it is painstaking work that you can only do if you have a secure job. We finished it, but it took a long time. In the other work where I’ve used natural language-processing methods to look at Gram Sabhas, we finished that in one year—in fact, I would say in six months between the time we collected data and wrote the paper, so basically a year. So it’s much faster, and it’s getting better.
So I think that there are advantages and disadvantages to both methods, but this was not just studying deliberation; it was also argumentative, in that Paromita and I argued all the time, and she’s very different from me. She is extremely focused and just nitty gritty, unpacks every word, understands everything. And me, I’m this guy who sort of operates at a much more sort of bird-in-the-sky level. And that combination in this case was productive.
RAJAGOPALAN: On the textual analysis, the thing you said about you and Paromita and her going over it with like a really fine-tooth comb and then your arguing about it, I had a question. So I don’t doubt that the modern methods of textual analysis have gotten better, natural language processing, even across languages other than English and so on. But I had a question about the peculiar Indian way of speaking and how that creates a problem for textual analysis.
And this is what I mean: there is so much subtext when Indians talk, because of a common shared understanding of religion or language or caste structures. So for instance, one could be talking about droughts, not giving someone water, but the underlying cause of not getting the water would be caste because it’s available at the bottom of the village. But in the natural language processing, no one’s going to say the word “caste.” So how do you counter that peculiar Indian way of talking where everything is not spelled out?
RAO: It’s not just India, it’s South India. And one of the things we were very careful about . . . I’m about to put the transcripts all up for public use. One of the interesting things about the transcripts are, they’re all in the language of the state. So Tamil, Kannada, Telugu, Malayalam, and they were translated by people from that state. So the English has the nuances of that Tamil, Malayalam, Kannada, Indian languages.
So, those nuances that human beings, that careful human reading can capture, machines cannot do any right now. They just cannot. Machines can look at broad patterns. And I don’t think that machine learning is a substitute for careful reading, careful human reading. But I think, again, they can be good complements. So you really ideally have to do both, and it also changes the nature of the design, of how you design the data collection process. So one of the things I’m doing right now, for instance, is—what I’m actually thinking about this week and this month, hopefully, is how do we assess well-being by having conversations with people? And that you want to do at scale, and you can never do it with human reading because the scale is too big.
You have to design a machine to do it, and that’s an interesting intellectual challenge, right? So there’s a lot of potential for these kinds of collaborations that I think we still are working on as a community of social scientists. But I’m utterly convinced that old-fashioned qualitative analysis is not going anywhere for precisely the reasons that you mentioned. That kind of nuanced reading can only come when a human being reads it. Maybe a hundred years from now, machine will be able to do it. Particularly, but you have to be good. You have to be like Paromita.
Development Economics and Randomized Controlled Trials (RCTs)
RAJAGOPALAN: So you talked about RCTs, and there’s a lot to complain about, but I want to parse out the RCT discourse with the development discourse a little bit more minutely. One part of your criticism, and this is coming from your recent comment in the World Development paper on RCTs . . . One problem is, of course, the question of overreach. As you call it, it is a case of the tail wagging the dog. The questions researchers are asking are now guided by the method, as opposed to the method being guided by the real-world questions. And the second kind of problem is a problem of external validity. Now, there’ve been lots of critiques of the RCT approach. And recently a volume has come out with a whole number of economists. What sets you a little bit apart is, you don’t want to eliminate the RCT method. You actually want to integrate it with thick studies.
And this is where I want to talk a little bit about your paper. This is the paper with Anantpur and Malik, “The Anatomy of Failure,” where you actually do conduct an RCT. But along with the RCT, you are simultaneously picking a couple of villages in each district to do detailed service, and the RCT fails. When I say “fails” in the sense that you don’t find that the interventions worked at a statistically significant level, so they failed from a standard of publishing. But it is actually your thick qualitative survey that talks about why. So can you talk a little bit more about this mixed methods that might actually make both RCTs and the surveys better? Or was this a one-off where you got lucky, and RCTs are just not the appropriate way of answering some of these problems? Like, how do you think about this?
RAO: Well, thanks for that question. I mean, you’re right. I see the RCTs as an enormously valuable tool, but it’s a tool. It’s not a system, it’s not a way of thinking. It’s a tool. It’s a tool that allows us to get to tease out causality in those circumstances where RCTs makes sense. Now, in “Anatomy of Failure,” we dealt with one criticism of RCTs: that they don’t tell you why—the mechanisms, I mean. What you see in RCT papers, when they want to talk about mechanisms, we will see an economic model out there. “This theory does this, and we maximize this and this. This is how we understand the mechanism.” What does that really tell us? It tells us what this person has sat in their nice air-conditioned office and worked out in their heads why they might have got the results they did. But what actually happened, there’s no data on.
And from the beginning I’ve always loved doing ethnography. That’s something . . . and qualitative work. It’s always been part of what I’ve loved being a social scientist for. And Kripa is a sociologist, and that’s what she does. So what we did [was] the sort of “a hundred villages” treatment: a hundred villages controlled, a hundred villages assigned, and then in 10% subsample, we track those villages over the course of those two years that the intervention is being done. And you’re right. What we found was that the intervention didn’t work, but the interesting insights came from the ethnography. That’s where . . . and the reason I call it ethnography and not sort of qualitative work is because we had our interviewers living in those villages over a two-year period.
You may be interested to know that we continued the field work in that 10% subsample till two years ago. That was from 2007 till 2018. And we are writing a book on that, and the insights . . . a lot of what I tell you about what I knew about panchayats comes from those insights watching those villages develop over a 15-year period. In fact, we have a plan now to send one of our guys back in the COVID period to see how they are dealing with COVID. So that’s one aspect of mixed methods that I find very valuable.
There are folks doing it in other parts of India. It’s become a thing, and I hope it really becomes a standard part of the toolkit. The big challenge in doing it is that economists don’t generally tend to get along very well with other social scientists and vice versa. So you have to have this integrated team, but not everybody is killing everybody all the time.
RAJAGOPALAN: So the emphasis, according to me, in economics, especially in recent years, has been one on causal effects. Whereas there could be multiple causal mechanisms that led A to cause B, whereas all the focus for us is “Did A cause B, or did A not cause B?” and the identification. But what are the many mechanisms through which A might have caused B is completely absent. And my sense is the reason they’re absent, as you know, of course, economists don’t play well with others and so on, but also just the fundamental nature of how economics programs are taught in design.
RAO: Perhaps tricky, but I’ll slightly disagree with you. But I think that’s changing. That’s changing a lot. For instance, my friend Scott Cunningham has just written a book called Causal Inference.
RAJAGOPALAN: Mixtape . . .
RAO: The Mixtape on Causal Inference. But in fact, it talks about multiple sort of causal mechanisms, and so people are beginning to think in these terms, boring from computer science and other places. Scott himself, who I’ve known a very long time, started out studying English literature. So he’s very interested in ethnography, so he likes doing that kind of stuff as well. So do many economists, so younger economists I think are thinking differently. The problem is, as I said earlier, it’s in the trajectory of how a discipline grows and learns. And the fact that that point of development of the discipline is the one that influences the policy of the day, you know, that to me is the problem. But instead of listening to somebody like Hirschman, who talks so broadly about what policy was, we listen to the current Nobel Prize winner, whoever the current Nobel Prize winner is, a passion of the day, whoever it may be. I have a deep aversion to the idea of the Nobel Prize in economics for that reason.
The second problem is that we as economists are trained to start believing that the assumptions we make for reasons of tractability, whether an empirical work or theoretical work, are the truth. And that screws up how we look at the world. I spent two very pleasant years in University of Chicago as a postdoc. And I used to be astonished to see my fellow young assistant professors, graduate students, talk about their love lives in utility maximization terms. It would just be, come on. And then of course you’ll start writing these papers, as I did too, by the way. So it really screws up with your head, I think, and that’s where instead of questioning the assumption, you accept the assumption is the truth. That’s what I think slowly is changing. At least let me put my optimistic hat on and say I think it’s going to get better.
RAJAGOPALAN: I like your optimism. I don’t share it, but I really like it. And I’ll tell you why I appreciate this aspect of one interdisciplinary work of big team of lots of different people, and also doing thick ethnography or like rather ethnographic projects over a very long period of time. I think it does two things. Like the way people think about qualitative research in some ways is, “Oh it’s going to add an additional layer of evidence or supplement the quantitative analysis.”
RAO: It’s worse than that. Generally speaking, qualitative work in economics is seen as a pretty picture to explain what’s going on. It’s data in its own right. That, you get less of. Sorry to interrupt you. Yeah.
RAJAGOPALAN: Yeah, no, absolutely. And when it combines with data in its own right, you know, in a quantitative sense, they think of it as an additional layer. But to me, what is better about, or rather what is useful about doing this kind of ethnographical qualitative work is, one’s hypotheses are more rooted in the real world. The questions one is asking will be different, not that the answers one is providing would be a little bit more robust. So I think that’s where my pessimism lies. Right now the ethnographic work is seen as this interesting cameo appearance, which will strengthen the RCT work.
RAO: Anecdotes. Anecdotes. Right.
Problems with the Hierarchical Nature of Economics
RAJAGOPALAN: Last question about both RCTs and this obsession with identification in economics. You’ve had an interesting view of the discipline because you work with academic economists all the time. You publish in academic journals, with all the standard peer-review problems. But at the same time, you work in the Social Observatory at the World Bank, which, as you said, is a completely different world and sort of protected from the usual problems.
So what do you think is going on? Is there something really broken about the industrial organization of how we produce economists? Does it have to do with the tenure system? Does it have to do with this journal peer-review referee system? Where is this coming from? It wasn’t there 40 years ago. It wasn’t there 80 years ago. Alfred Marshall, who you admire, famously said, the math has to be there to make sure you have logical arguments. Then he said, burn the mathematics. So now we’ve gone like a very very different way. So what do you think is going on within the IO of economics?
RAO: Hierarchy. Economists are great believers in hierarchy. For some reason we have developed since the post–World War II era that model. Another economist I admire a great deal is Kenneth Arrow. If you read Arrow’s own writing, it’s so brilliantly, beautifully, elegantly written with the math is playing an appropriate role. The math is not the point. It’s the ideas that have a point. You read Hirschman, you read Kenneth Boulding, long revered—that kind of economics. Arrow, of course, because he was such a . . . Arrow was the genius of economics, and so he was able to do both, and then of course influenced mainstream economics so greatly. But I did a book called Culture and Public Action, edited book called Culture and Public Action, which was all about economists talking to anthropologists back in 2004. Arrow gave a blurb. He loved the book, and there was no math in the book. There’s another example of somebody who does that very well.
But for the most part, Sen actually said this, that if you want to have a career doing philosophy and economics, you better first prove that you’re the best economist of them all mathematically; then you can do the stuff on the side. That should not be necessary. Many economists have talked about the top five items that you’ll have to publish in the top five. That’s how you get tenure. I’ll give you an example that has happened to me a couple of years ago. I used to have all these young people work with me, and I still do. And a very sort of well-known top development economist came to one of the women who was working with me and said, “Don’t work with Biju. You’ll never get a job.”
Thankfully, she got a job, but you know, there is this hierarchy of who’s smart, who’s not smart, who is better, who is worse. The idea that the point of life is to become a professor at Harvard, and you do that by publishing in the Econometrica or the AER all the time, or JPE or whatever, of course topped by the Nobel Prize, that’s why I don’t like it. That whole thing becomes a superstructure. And it incentivizes everybody to write in a certain way, publish in a certain way, even if you don’t want to. When I started my PhD at the University of Pennsylvania in 1985, as I said, I was so depressed with what I was being taught in my first year that I went to anthropology. Arjun Appadurai, the anthropologist, was the grad chair of anthropology at Penn in those days. And I said, “Can I move to anthropology?” He sat me down and we talked for about two hours, and he said, “Biju, you’re not an anthropologist, you’re an economist.” So he said, “Go back to economics and be an anthropologist: find economics.”
And so I’ve been trying to do that ever since in some ways, but there is a problem in the sense of that hierarchy. What is interesting to me—we’re both on Twitter, and I’m not deeply active on Twitter, but I observe—and what is interesting to me is to see the equalization of that slowly happening, which is why I’m optimistic. You know, I think young people are seeing the stupidity of this. They’re sort of seeing that interesting things are being said by people who are not economists, but they are either psychologists or sociologists or whatever. They’re listening to others, the best of them. And so they’re beginning to start thinking differently and incorporating those ideas into their language. And so I’m very, very hopeful that that’s changing.
RAJAGOPALAN: It’s interesting you talk about the Nobel Prize being the top of the superstructure. It’s very Hayekian, your view. Hayek in his Nobel Prize lecture just pooh-poohed the Nobel Prize and said they shouldn’t exist. And you’re right, it creates two things. It creates superstars and it creates fads. And then there is an elite mimicking. Everyone must mimic up. And my colleague, Alex Tabarrok, and I wrote about how in India, the elite mimic development from the West. So, one aspect is just this kind of elite mimicking. Of course it starts right at the top in economics with the topmost structure, but I’m afraid it has entered development policy. It has entered regular policy.
RAO: It’s been with us from the beginning, that if you look at development policy—and I’ve been telling people to do this research, and if you can—with Texas data NLP methods, you can do it quite easily. If you look at World Bank reports, going back to the inception of the World Bank in, what is it now, 75 years? So 1950-something. You will see that policy messages mimic what the latest fad in economics is. Whether it’s all macro modeling, and of course it’s all about RCTs, or at some point it was all about neoliberalism, whatever it is. Whatever fad. You’re a hundred percent right. It’s what Peter Evans very famously called isomorphic mimicry. And that’s really the word that fits that very well. Yeah.
You know, India had a different tradition of economics. If you look at the kind of economics that was done in the Institute for Development Studies in Trivandrum or IESEC in Bangalore, or even the Institute of Economic Growth in Delhi, where it was an interdisciplinary culture, where it was very grounded . . . and Pranab Bardhan exemplifies that. Pranab Bardhan, of course, he’ll always tell you that in economics, he’s primarily known as a trade economist. None of us think of him as a trade economist [laughs] because his work, now that it has been a great inspiration for me, has been grounded in these terms. And he wrote a beautiful book on Conversations between Economists and Anthropologists back in the ’80s—again, greatly influenced me.
I mean, Stephen Marglin is another great example of this, who within the Harvard economics department is trying to create his own space. Tyler Cowen in your own department. There are lots of people try to think this way. And in India, there was a very long embedded tradition. My worry is that they are all gone now, and you’re left with a standard community of economists. Sometimes very, very good. But even you have some counterexamples. Rohini Somanathan’s recent work is trying to go back to that tradition to some extent. Ashwini Deshpande’s recent work. So that’s slowly changing as well.
RAJAGOPALAN: You’re optimistic.
Rao’s Intellectual Background and Influences
RAJAGOPALAN: No, your optimism is infectious, I think. I want to switch gears a little bit and talk a little bit about you. I know that you’re a third-generation economist. Your father [SL Rao] and your great-uncle [VKRV Rao]. So was that the reason you chose to become an economist, even though you’ve been talking about your deep interest in anthropology and ethnography. And so, can you think of some seminal moments or books or intellectual influences or teachers along the way that have shaped you into the kind of economist you are?
RAO: Yeah. Wow. Thanks for that question. So, yes, I am a third-generation economist in the sense that my grand-uncle was an economist, my father’s uncle [VKRV Rao]. I was named after him, as it happens. And so that was always a thing with me, because in school I did economics 10th, 11th, 12th standard, and his name would appear in the textbook, and I would say, “Wow, that’s my name?” Yeah.
RAJAGOPALAN: This was because VKRV Rao, who was really important in development planning and was member of Planning Commission, was very important in Institute of Economic Growth, setting it up, Delhi School of Economics. So, he’s a sort of seminal figure in Indian economics. And a student of Keynes, of course.
RAO: And a student of Colin Clark. So what I used to do when I was a kid, I used to come to Bangalore for holidays. I was in boarding school, and he was by that time retired. And I would come and tell him, “No, I read this in the textbook, in 10 standard and 11 standard textbook.” And we would have these debates, and he was talking about balanced and imbalanced growth and how he thinks economics should speak to other disciplines. You always try to do that at the Delhi school, how he brought MN Srinivas to the Delhi school and all this kinds of stuff, and this was what I thought economics was.
And my father was very influenced by his uncle. Was a manager. He’s writing a book now about . . . He got his master’s from Delhi School. He was in third batch of Delhi School. But he spent his life as a manager; at the end of his career he managed NCAER. He was the director of the National Council of Applied Economic Research. At the liberalization period when Narasimha Rao and then Vajpayee were prime minister. And his approach to economics was always very practical. How can we do this to make things better, rather than publishing papers or whatever else? So these are the guys who influenced me in many ways. My grand-uncle in particular would make me read Marshall. This is how I know Marshall, Adam Smith; read all these when I was very young.
And then I went to college in Bombay University. And Bombay University, unlike Delhi University in an undergraduate level, was influenced by PR Brahmananda and CN Vakil and all these guys, which was a very different kind of economics. It wasn’t the Delhi School kind of economics. The Delhi School kind of economics was not my granddad’s kind of economics, either. It was the economics of Bhagwati and Sen and everybody who took over and then made it what it was, the famous place that it became. So both in my undergraduate training and in my own household, this was the kind of economics that went on.
But at the same time, I guess for me, I read Scarlett Epstein’s book. She compared wet and dry villages in Karnataka. And by the way, Scarlett Epstein was a student—an anthropologist, but a student of Arthur Lewis, and she brought these wonderful field insights into it. I read [MN] Srinivas when I was a kid, and all of this made me want to do that kind of work. But I was very interested in data. I was very interested in using statistics. And then I was trying, I think, to fashion a way of doing economics for all the reasons I talked about that was bottom up, that was integrated with hypothesis but developed from conversations rather than from the top. And I didn’t get that in grad school.
I was trained, I think, reasonably well by some wonderful professors: Jere Behrman, Anil Deolalika, Andrew Foster, Bob Pollak. Wonderful economists, but I didn’t get this stuff. And I was very frustrated by that. So as a result of that, partly, I did four years of postdoc in Chicago and Michigan, where I got some funding to do fieldwork. And so it was at Michigan that I first went and did serious fieldwork. And then that started informing my work ever since.
And I did these post-docs. I was offered an assistant professorship on my tenure track. I didn’t take it as I wanted to do a post-doc. By the end of my time at Michigan, I had trouble finding a job. Even the assistant professorship that was offered, I couldn’t get, even though I had a paper R&R at the JPE at the time. So despite those credentials, I couldn’t get a job. Finally, my friend Mike McPherson, who was then the chair of the economics department at Williams College, brought me there. And I got a job, somehow. Williams was very influential in that you have to teach undergraduates. So these sorts of questions are what undergraduates ask, they’re not interested in all this fancy stuff. They want to know what is the relevance. So that helped sharpen my thinking.
And then I was very lucky that the World Bank at that time had a visionary president called James Wolfensohn, who said that this is not the way to do development. So he told the research department, “You’re just an economics department. Expand your horizons. You need to hire noneconomists.” So they hired two, Monica Das Gupta, the wonderful demographer, Michael Woolcock the sociologist. And they wanted somebody to bridge economics and other disciplines, so they said, “Let’s hire Biju.” So that’s how I ended up there entirely by luck. And it’s been for me, as my dad told me the other day, he said, “God has been kind to you in the job that you’ve got,” because it’s allowed me the opportunity to do this kind of work. And I could have never done it in an economics department.
So in that sense, I think a bit of luck, a bit of thinking, but if anybody wants to do this kind of work, you have to think about how to make a living doing it. That’s very important. Because what happens to a lot of people, they get frustrated and they quit and they do something else. How do you fashion that career? And I think, as I said again, my optimistic side coming out, it is much more possible now than it was then.
Oral Traditions and Economics
RAJAGOPALAN: I know that you’re a student of the musical tradition of the Mallikarjuna Mansur family, which is now in Dharwad, and you learnt from them. So one question I had trying to link your musical influences and your work was, the Indian classical tradition is largely an oral tradition. How much do you think your musical influence has influenced the kind of economics you’ve done in terms of oral tradition and deliberative processes? Or do you think it’s the reverse: your work in economics actually got you to move towards a tradition of music which is an oral tradition?
RAO: For that I could ask you the same question since your mother [Saraswati Rajagopalan] is such an amazing veena player. So I’m sure you can ask yourself the same question. But since you asked me this question, let me try to answer it. I think what I try to practice in my economics is what you might call an Indian style of economics. What do I mean by that? I mean, I’m deeply embedded within Indian, Hindu spiritual traditions. I mean, I’m a religious guy, not in that superficial way, but it’s part of what makes me. So I read a lot of Hindu philosophy, and the approach there, as you know, is a reflective approach. You’re looking for a larger reality. And then that larger reality is what is influencing how you see the world, which is for us Hindus the play of the Lord. It’s Maya, right? So how do we make sense of how human beings are constructing themselves?
And when you start seeing it that way, you’re not looking for a tractable mathematical structure that you can tweak in some way. We are not in physics. We’re doing a version of embedded conversation, of an understanding the social embeddedness and how that plays with economics and the politics and everything else. But that’s what makes human behavior and culture and makes people tick. That influences my economics. And that makes me attracted to Indian classical music because in the syncretic Indian tradition, the long history in the North of the Sufi tradition from Islam and the Hindu tradition from Dhrupad and the other things, how those have come together. Like Amir Khusro and the great sort of philosophers who made Indian music. What that becomes then is a form of musical expression that gives you a very basic structure within which you learn how to improvise. But improvisation is not easy and requires years of extremely dedicated instruction and reflection to get to a point where you’re doing it well.
So I approach economics the same way. I don’t think of myself as a very good social scientist. I never will, because you always see the imperfections and because there’s something out there that you’re trying to reach that you will never reach. And that same story is with music. And I just feel I’m never there. So I think they’re both influenced by the same roots rather than influencing each other. Though I must say that there is a lot in common, within particular types of rhetoric and singing. There’s no question about it.
Writing, Reading, and Watching
RAJAGOPALAN: I’m just curious about your writing process.
RAO: Oh boy. Let me put it this way. I always hold a fountain pen, and I have a big notebook which I always carry. So a lot of my writing is actually scribbling and drawing pictures and writing themes. I mean, I’m playing with that. And I don’t actually type till I’ve sorted out in my head what I want to say. I can’t learn by doing while I’m writing it. It doesn’t work for me. Well, of course I refine my writing, and that takes a long time for me. I’m not an easy writer. It takes a long time for me to actually put pen to paper, at least put my fingers on the keyboard. Pen to paper is easy. And that’s where all the junk stuff happens when you work your ideas through.
So the fountain pen is very central to my writing process, as is not trying to get too much done in a day. Thankfully in my work, the research is one part of it, but there’s also a lot of practical stuff I have to do and which I love doing. So that takes my mind off whatever it is. It’s more sort of project stuff, which I really enjoy as well. So the time spent in doing research and looking at data and writing is maybe three or four hours a day. And that’s precious time. So that’s the time I give, and then I like to pick good co-authors who can . . . who are good researchers and good writers. Without that, I would get nothing done.
RAJAGOPALAN: And what are you reading right now? And what are you working on right now?
RAO: I am broadly interested in how we—I’m not going to use the word “measure,” but how we understand well-being. And so I’m trying to do that to the macro level in finding ways of using qualitative data, textual data, whether from Facebook or Twitter or Google searches or whatever, and see how that contrasts with standard measures and with big data, nightlife and all this kind of stuff. What do we learn in terms of macro well-being in that way? And also at the micro level, I’m working with World Bank colleagues to try to understand how we assess people’s well-being in a way that they themselves see themselves, rather than us developing some Cantril ladder measure, or some consumption module to measure that. We can do those things, but then what do people see about themselves?
In terms of reading, at the moment, actually, I’m reading a lot of junk. But I’m reading this, which is Agnes Callard’s book [Aspiration].
RAJAGOPALAN: It’s a fantastic book. I’m so glad you mentioned Agnes. I am a huge fan of hers, and she’s really the loveliest person. We actually met at an Adam Smith workshop. And she’s really one of my favorite philosophers, modern-day philosophers.
RAO: I find the book very insightful. I’ve just finished it. I loved it.
The book next in line is a book I’ve been meaning to read for a long time, by my friend Celestin Monga. He’s a very interesting character. I think it dates back to 1996, called The Anthropology of Anger. So that’s next on my list.
RAJAGOPALAN: And my final question, without which we can’t end the show; it’s the most important question. What are you binge-watching during the pandemic?
RAO: Very good question. Let’s see, The Bureau, which is about the French intelligence agency; Borgen, which is Danish , about the Danish prime minister; and I must say, my wife and I have indulged ourselves watching Bandish Bandits.
RAJAGOPALAN: I was curious to ask if you have watched two shows because of your interest and background. One is Bandish Bandits and the other is Panchayat, which is the story set in a small panchayat office with a Pati Sarpanch and all those things.
RAO: I saw Panchayat when it started. I was halfway through and I stopped. I’ll tell you why. It’s sort of an interesting story. So once I was in Bangalore at a party in somebody’s house, and it was around the time that Vikram Seth’s book Two Lives had come out. Have you read that? It’s about his uncle who married a Holocaust survivor, and it was all about how his aunt . . . It’s a beautiful book. It’s about how his aunt survived Nazi Germany and all that. I love the book.
And there was this old, she must’ve been close to 90 at that point, European woman at the party, what I was told was married to a man from Mysore, married to an Indian man, but then was a widow. I got chatting with her, and she was a Holocaust survivor. She had run away from the Holocaust from Austria, gone for a crazy journey and finally ended up in Mysore and had rebuilt her entire life there. Married to two different Indian men and had this life. Fascinating woman. So then we caught up; I talked to her for about an hour. Then I finally had the guts to ask her, “Have you read Two Lives?” She said, “I tried, but my life is so much more interesting.”
RAJAGOPALAN: So it’s the same thing with Panchayat and the TV show.
RAO: I found it a little too fictional and I think . . .
RAJAGOPALAN: And Bandish Bandits? I know that your teacher is not like that. So that’s a lot more fictional.
RAO: Let me just say, my teacher, my guruji, Pandit Rajashekhar Mansur, is one . . . He spent 25 years as an English lecturer at Karnataka University, Dharwad, and was chair of the English department. So he’s a wonderful teacher and is enormously patient, enormously kind, and has a very modern approach to teaching where he sort of doesn’t focus on the technicality but on the bigger ideas. And then the technical details come. For me, that was a wonderful. He is just an amazing teacher. But no, he’s not like that. Guruji is very generous. He’s very kind, very, very catholic in his . . . He’s got a PhD from the university of Wales. He is a very well-educated man. But for me in the pandemic, being locked down, just hearing good Shankar-Ehsaan-Loy music, just watching . . .
RAJAGOPALAN: You have Ajay Chakraborthy singing. It’s just joyous.
RAO: Its like two wonderfully attractive young people falling in love. It’s great fun.
RAJAGOPALAN: I agree. I very much agree. Thank you so much, Biju. You’ve been so generous with your time and your insight. Thank you so much for doing this.
RAO: Thank you, Shruti. I really appreciate and I love the fact that you’ve taken the trouble to read the book, perhaps more carefully than I have, which has informed your questions, and really enjoyed your questions. Thank you so much.