Nobel winner Abhijit Banerjee offers cure to India’s ideology-driven public policy ailment

Indians’ tendency to use ready-made frames, both by Left and Right, makes policy prescriptions utterly predictable and not so useful.

Nobel laureates Abhijit Banerjee and Esther Duflo | Photo: @NobelPrize | Twitter

If your friend gets the Nobel Prize, I suppose it is all right to bask in the reflected glory, at least for a day. So I did, after the announcement of the Nobel Prize for Economics this year to Abhijit Banerjee and his two colleagues. My family and friends are duly impressed. But this is not my-reminiscing-about-the-latest-Nobel-Laureate piece. I am hopeless at telling stories, even remembering them. This is about my odd friendship and admiration for Abhijit, for I suspect some of those reasons may be of wider interest.

We were in the same Masters’ batch (1981-83) at JNU, but in different disciplines. He was pursuing MA (Economics) at the hallowed Centre for Economic Studies and Planning (CESP). I was pursuing the more humble MA (Political Science). My first distinct impression of him was a man sitting outside the ramshackle dhaba at the back (now the main entrance) of the library building. A gangly, bespectacled man with a slight stoop, dangling a cotton Santiniketan bag (not the radical jhola!), passionately involved in an argument with a group of history students.

I kept my distance. I was still awkward in English-speaking Delhi and somewhat in awe of his reputation. Rumour had it that he was a ‘Presidency topper’ who had secured an ‘A Plus’ (highest grade in JNU’s 9-point scale) in the first semester. He was not overtly political. He did not join any of the political organisations on the campus, but would turn up for many post-dinner political meetings.

During those two years, we had no more than a nodding acquaintance. We got to know each other afresh some 20 years later when he turned up for my talk at Harvard. He stayed back and we talked about JNU days, joked about how little we had learnt inside the classroom. This is when we became friends.

Since then – I suppose it was 2003 – we have met often, during my infrequent visits to the US or his frequent visits to India. Like a good Bengali intellectual, he can hold forth on anything under the sun: from literature and cinema (he has actually directed a short documentary film) to history and politics. My bandwidth is narrower. Like all Bengalis, he is a foodie, who, unlike most Bengali men, can also cook rather well. I am no foodie.

Worse, we don’t quite share our politics. He did take keen interest in the AAP experience, but hasn’t shown much interest in India’s democratic socialist tradition that I come from or in my organisation, Swaraj India. My colleagues and friends are surprised, some even dismayed, at my interest in and admiration for his work. The red and the green friends don’t find him radical enough. My movement friends violently disagree with many of his policy prescriptions, especially on cash transfer and learning assessments. Yet, I look forward to talking to and learning from him.

Public policy & economic reasoning

The reasons are not his technical accomplishments that have, rightly, impressed the Nobel committee. He has come to be seen as the pioneer of clever experimentation as a method of gathering robust evidence on the efficacy of any policy. The use of randomised controlled trial (RCT), which was earlier used in medical sciences, by Abhijit, Esther Duflo and Michael Kremer changed the face of the sub-discipline of developmental economics within a decade or so. This is why they got the Nobel, rather early by the standards of the Nobel committee.

But as economists like Angus Deaton point out, RCT is neither necessary nor a sufficient method of gathering robust evidence. Jean Drèze has drawn attention to the perils of doing policy advocacy based solely on RCT. Pranab Bardhan alerts us that RCT as a fad can take our attention away from deeper and larger issues that affect public policy.

What attracts me to Abhijit’s economic reasoning is something more generic that should be relevant to anyone who cares for public policy. Thinking about public policy in our country is over- ideologised, over-generalised and over-optimistic or over-cynical. Abhijit and colleagues offer a cure to this debilitating condition. This is why political activists like me must listen to economists like them.

Attention to policy design

The problem with most activists and political workers, including the most courageous, honest and intelligent ones, is this: when it comes to framing economic policy in general and social policy in particular, they draw from first principles, as they should, but rush straight to policy prescriptions. There is a strange bundling of ends and means. Those who value equality, for example, automatically trust state, prefer public sector and advocate controls and regulations.

The tendency to use ready-made frames, both by the Left and the Right, makes policy prescriptions utterly predictable and not so useful. Abhijit and his colleagues have ensured that the values of a welfare state speak to instruments of a market economy that we live in.

They have done so by breaking down big public policy debates into small bits, and then resolving each bit with the help of rigorous evidence. For example, instead of debating the merits or otherwise of a common school system, which is not a feasible option for us today, it would be much better if we focus on how to deal with teacher absenteeism and learning deficits in government schools.

This move from general to specific makes the debate more meaningful and usable. It forces the policy-makers as well as social activists to pay attention to one of the weakest links of our policies: their design. From Women’s Reservation Bill to Right to Education, we have umpteen examples of well-intentioned but poorly designed policies that achieve the opposite of what they set out to do.

Attention to policy design can cure the ideological activists of their contempt for details. What is so refreshing about Abhijit, his colleagues and their students is their keenness to dirty their hands, to visit the sites where policy touches the people, and to understand the smallest of details.

This is what public policy must do. In that sense, Abhijit, Esther Duflo and Michael Kremer have nudged the esoteric discipline of economics back towards real life. Their rigorous testing of the impact of public policy is one of the best cures for the congenital cynicism about the role of the state. Their work convinces us that public policies, which are normatively oriented and intelligently designed, can achieve the desired goals. They are not the only ones: there are many other economists who can help us in this task. But social activists must learn to look beyond their cosy circles.

Now that the Nobel is behind him, should we expect Abhijit to take a step forward? What we really need in these times is a frame that brings together ethical norms, ecological sustainability and economic rationality. I have called it the search for Eco-normics. Our received economic ideologies fail to provide us with such a frame. Gifted with a beautiful mind, Abhijit is among the very few who can address this pressing need of our times.

The author is the national president of Swaraj India. Views are personal.