Atanu Dey On India's Development

It’s the Small Stuff, Stupid

An ironic bit of popular wisdom goes

  1. Don’t sweat the small stuff.
  2. It’s all small stuff.

In the context of economic development, I totally agree with the latter bit, but strongly disagree with the former bit. If we don’t sweat the small stuff, we don’t have much hope of managing the big stuff since the big stuff is exactly what arises from an aggregation of all those small bits of stuff.

I just went out to lunch in the neighborhood of where I work. A passerby stopped me to ask me where a certain company was. I said I don’t know but if he had an address, I could perhaps direct him. He only knew that it was close to the ‘Empire Building’. We spent some time trying to locate it and then finally gave up. I don’t know how long he spent walking around in the noon-day sun trying to get where he wanted to go. Perhaps he just wasted an hour, a lot of shoe leather, sweated in the heat, and when he arrived, he was tired. The opportunity cost of his trying to find a place is small but non-zero. He could have spent more time with his family or done some productive work. Add the cost of millions of people spending non-productive time searching, and soon you get a significant amount of loss.

That streets should have a name and locations along a street should have a number is a concept that should be evident to the meanest intelligence, one would expect considering that it is not exactly rocket science and that many parts of the world have had that innovation for generations, if not centuries. Yet it is a rare exception when you can find a place in India without an algorithmic description of how to get to it. A typical letter in a typical developed world would read:

Ramesh Singh
123 Gandhi Road
Pune, Maharashtra 44123

In India, it would be

Ramesh Singh
Networld Building
Opp: Star Cinemas
Vasant Sagar Complex near Local Station
Deccan Gymkhana
Pune, Maharashtra 44123

I have spent frustrating hours of my life searching for places in unfamiliar places such as Mumbai and Delhi, going round and round in circles in a cab asking people for a location. I assume that I am not alone and that in a country of a 1,000 million people many of whom find themselves in unfamiliar surroundings in the course of daily living and working, the story of spending time and energy needlessly is repeated a few tens of millions of times daily. Add that up for weeks, and months, and years, and decades — and soon you have a huge amount of wasted time and energy.

I have a prediction to make: that in about 10 or 20 years at most, Indians would have figured out this whole new-fangled thing called street addresses. We are bone stupid but not that abyssmally stupid that we cannot learn from others that street numbering saves time and energy. Since I am at it, I will make another prediction: that in about 10 years time we will learn the benefits of a standardized telephone numbering system and even learn that it is easier to read a long string of number when written thusly 408-083-2543 instead of thusly 4080832543. One may say that it really is a very minor matter. But it is not. Misdialled calls, numbers you cannot easily remember or copy down without errors, having to wonder if you need to add a 2 before you dial this number or should you add a city code or whatever is a needless aggravation.

Enough about phone numbers for now. The larger point is that standardization matters. It eases the friction that accompanies transactions which increase as an economy develops into a more complex web of interactions. Reducing transaction costs is what increases the pie because transaction costs are sheer losses (or dead-weight losses) that benefit no one. In a village economy, street addresses are not needed because everyone knows where everyone is and what he is up to today. In a city of a few million people and a few hundred square kilometers of buildings, one has to be more systematic.

It is all the small stuff, really, that end up making life miserable. Went to the bank yesterday. There were 20 people waiting huddled up near the teller’s counter. Surely it does not take an Einstein to figure out that handing out a number to each person waiting for a teller would ease the bother of having to keep standing in line.

I could go on and on ad nauseum about little innovations that have been around for ages and which we can adopt costlessly. I could fill volumes, honestly. There is a more important point all this is leading up to. That is, we need better technology, not necessarily ICT with its computers and cell phones and internet and world wide web. By technology I mean know-how — how to do stuff. The know-how exists. One just has to observe and learn and adopt. But observing, learning, and adopting takes thinking and effort; it is not as easy as simply buying a bunch of computers and firing off Microsoft Windows.

I am not a Luddite and I am not against hi-tech. Some of my best friends are techies and my education is in computer sciences and engineering and my salary is paid by a technology company. I just happen to believe that hi-tech needs a foundation and that foundation is made of lo-tech. Hi-tech without the lo-tech is about as useful as a car with a fancy engine but no wheels. Hey, that is a good analogy. A car with a fancy engine ain’t going anywhere in a hurry without wheels. And even if you do figure out that wheels are needed, you can’t go far if you don’t get round wheels. Square wheels just won’t do. Then even if you get round wheels, if the tires are not inflated, you get around with a lot of loss of fuel and in discomfort. That is, without air in the tires, your transaction costs are higher.

As a development economist, I have often asked myself what are the invariants that underlie development. I know for sure that high technology (computers, internet, cell phones) are neither necessary nor sufficent for development. Most of the developed economies of the world developed at a time when all those were not yet invented. I believe that one invariant is the ability to adopt innovations.

Post script: Here is a followup post The Tathagata on “It’s the Small Stuff, Stupid.”

  • http://www.livejournal.com/users/birdonthewire Arun Anantharaman

    The ability to adopt innovations

    That is a very good point. But one of the reasons that does not happen as well as we would like it to is because of “vested interests”.

    There are people who benefit because of the status quo, and I think that, unfortunately in India, they do a very good job of hindering this ability to adopt. Or conversely, maybe we have not learn to deal with them strongly enough

  • Anand

    I think one day, people are going to say, I don’t care whether you are pro-OBC, pro-SC/ST, secularist, psuedo-secularist, or non-secularist. Just build me some darn roads, and make it easier for me to call up a couple of folks, and get from place A to place B, and I will vote for you.

    Another way to put it : infrastructure development is a shared resource, whose efficiencies are realized by all, but which may not be a derivative of open markets. Effective political systems are called for to promote the growth of such infrastructure. Political action ought to be aimed towards securing such efficiencies.

  • Arun Varadarajan

    Again lookign at the sample address.. makes me come back to the point of standardization.. how do you standardize the address.
    Another solution would be … have a service like 1-800 . In the US there is a service ( i do not think in all cities) by which people can call up to recieve directions. Might sound slightly out of the world but feasible…
    If not do what anyone would most likely do… Ask the autodriver of taxidriver!!!!
    A crude solution but maybe sounds practical.
    Also there is the Hi Hi tech solution… GPS… or Microsoft Roads and maps or something like that whoch has maps that can be loaded onto GPS systems and become a map for everyone but way way off the common man’s reach…

    Arun Varadarajan

  • http://opinion.paifamily.com Nitin

    Japanese addresses are quite complex too. Probably more non intuitive than the Indian ones :-) But I digress…

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  • Kent Smith

    In the city to which I’ve recently moved, Genoa, Italy, an attempt was made 130 years ago to make sense of the chaotic and duplicative addresses by renumbering the entire city. While they were at it they renamed many streets, as those too were often duplicated. The government soon discovered that it had made a calamity — documents going back centuries, both in Genoa and around the world, referred to the old addresses, and they realized those mustn’t be lost. So houses were required to post both the ancient and the modern addresses, which gave a license to people to refer to either one (and many preferred the old addresses). To this day the system is in chaos, and finding an address in Genoa is a near impossibility.

  • Samy

    As long as there are people around to ask the address.. and there are always a lot of them – believe me.. I dont think Indian way of writing the address will change. Even if you put the street number, people will still ask everyone else – its so typical of a place like Bombay!

    And I think the problem with the telephone system is that we keep buying discarded/obselete telephone switches from other countries – some come with 6 digits and some with seven or more.. it stays OK for a while and then they have to add one more digit because of the population growth.

    All our politicians have been traveling all over the world for generation – don’t you think they have observed uniform address system and telephone numbering system in different parts of the word! But then either they are stupid or they just do not want to act on it so the life in India continues….

  • Anand Matam

    I agree that it would take a while, may be a decade or even half a century, for the people to adapt to standardization. But just a taste of it would accelerate the same.

    But, however small this stuff is, it is the key to utmost convenience in land-development, management and location. Indian Postal Service(IPS) holds the key to standardization owing to the PIN code system for sorting and delivering mails.

    The key is in using dual systems, old system for the common man and a new standardized system by agencies like IPS on a test basis for a type area.

    Why standardization is utmost important is: using Navigation Systems(GPS navigators in your car) is impossible unless there is standardization. Getting driving directions is almost impossible although impressive attempts have been made. Unlike typical hindi movies police and firefighters can reach a destination on time :) and help in redung disaster and crime.

    Educating the younger generation in schools and colleges about the new system on incorporation can revolutionize the phase-wise reconstruction of the address standardization. Slowly but steadily people would definitely accept the new system.

    May be we could make a difference. It is just in making an attempt. Beauraucracy is always there but the quest for convenience can be attempted through beauraucracy too. There is something called lobbying.

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