Atanu Dey On India's Development

You might be a third world country if …

Indian roads reflect the amazing diversity that is India, a mix of the modern and the ancient. It is as if a cross-section of the entire history of transportation were displayed for all to marvel at. A huge mass of humanity using every conceivable mode of transportation — from no-wheelers to two-wheelers (powered and otherwise) to three-wheelers to four-wheelers to sixteen-wheelers — moves along at varying speeds on what apparently are roads. I say moves but at times the whole mass merely sits there for hours. That is what happened during one stage of my journey from Mumbai to Pune last week.

As the crow flies, it is not very far. About 100 miles or so. Half that distance is served by a new 6-lane toll expressway. The journey should take about 2 hours but I estimate the average time to be more like 4 hours. Last week it took us about 5 and a half hours. We were within a few kilometers of taking the expressway when we got stuck in a huge traffic jam. The traffic was stalled for as far as one could see. Running low on gas, we decided to take a short detour.

As it turned out, a few thousand other people also decided to take the detour and we ended up stuck at an intersection which was gridlocked. Trucks, cars, two-wheelers, buses, people, auto-rickshaws, people — everyone — was at an almost standstill because at that 4-way intersection, vehicles had moved in and there was no way for anyone to move an inch in any direction. After a while I lost my patience and got out of the car and walked to the intersection. Along with a few other people, I ended up spending about an hour trying to sort out the mess. It was hot, dirty, exhausting, exhaust pollution-laden work. How I wished that Indians had figured out the utility of STOP signs.

I have traveled a bit around the world and one thing you find in pretty much most of the world are those octagonal red stop signs. They are passive devices that regulate traffic. They are not high-tech. They don’t require electricity to operate nor high-technology to manufacture. I have seen them in lots of places. Except in India. India does not have STOP signs.

Consider this. Indians do use cars — from cheapo 800-cc tinpots to huge SUVs to Mercedes Benzes. But Indian roads don’t have STOP signs. It is a mystery till one realizes that STOP signs are not private goods while cars are. Because of missing public goods — and stop signs are just one of the many missing public goods — private goods are less usable in India. It is worth exploring the welfare loss arising from the lack of public goods in an economy. For now, let’s estimate the cost which could have been avoided if they had a bunch of stop signs at that intersection and if the users had had the sense to keep the intersection clear.

I estimate that a thousand vehicles and four thousand people idled for about 2 hours. About a thousand litres of fuel and eight thousand man-hours were lost. Valuing a man-hour at $2 and a liter of fuel at $1 and adding something for the increased pollution, around $20,000 were lost. Ours was not the only traffic jam in the country that day. All across India, thousands of avoidable traffic jams occur every day. Many of them could be avoided if there were stop signs and if people figured out what they meant and behaved accordingly. Assuming that on average an Indian on the road spends an extra hour stuck in traffic, here are the numbers. Number on the road each day: 50 million (5 percent of population.) Total man-hours lost: 50 million. Using a conservative $1 as the value of a man-hour, estimated cost of traffic jams is $50 million per day. Between $15 and $20 billion is the loss over the year.

Twenty billion here, twenty billion there, and soon you will be talking real money. There have to be hundreds of other small leakages in the huge economic system that is India, each bleeding the economy in apparently trivial ways. And when they are all added up, we find that India is an astonishingly poor immensely populated third world country. Which makes me conclude that

If you don’t have STOP signs on your roads that have millions of vehicles on them, you might be a third world country.


  1. Atanu:

    Another good example.

    Yesterday, I needed a draft. I had to take it from one of the nationalised banks. I used SBI. It took me 1.5 hrs for one draft.

    I needed a drivers licence for driving a car and it took me 1 day for the learners licence.

    It is just amazing how these small things will add up and that’s it gone : poof.


  2. Hi Atanu,
    I have read this type of discussions and huge loss to Indian economy because of road system of India, many times here and at other places. To devise a new system, different and better system everyone can add some ideas or even you don’t need some ideas just copy something good from some nice existing system. But what the problem seems to be is not not having a nice road system, but people who suggest of having nice road system but don’t come up with a really nice model of road system and have political pressure to get it implemented in India. I mean to say that everyone feel the need to have a nice and better system why doesn’t someone work on it privately (kind of social work) and then try to get it to the stupid politicians have pressure on them thru some effective people and try to somehow get it implemented. Even if that doesn’t works out than we can have big rath yatras or bhuk hartal on every chourahas (corners), block the traffic and try that way. I like the second way because this happens a lot and is popular means in India, but it is used only for some stupid reasons always…. why not use it for some good reason??

  3. Nice One Atanu although i don’t agree with your assumptions for Cost evaluation and assuming that STOP signals would eliminate traffic woes.Am sure it would reduce minutely the traffic bottlenecks IF the people knew its meaning and followed it, which i doubt it.What we need is viable over-the-air tram or Rail-system for mass transportation. We also need to encourage Car-pool&Van-pool and make sure we have a decent “Exit system” in roads.

  4. It’s not just a stop-sign, it’s peoples’ acknowledgment of (and addressing) a rule-of-law issue – a tacit, collective acknowledgment that they should stop, wait for a passing vehicle, then go. Everybody uses roads, since time immemorial. The Incas had roads, the Romans too – but don’t take Italian drivers as your guide, they only stop for cops in Lamborghinis!

    It’s recognition of the validity of a stop-sign itself, as a symbol of communication that everyone agrees on – not just a new system or ideology, but acceptance of an existing system that has significance and meaning, and it would work if it were not ignored.
    There’s a Peruvian (Chilean?) economist who’s talked about rules and structures (and strictures) in many “third-world” countries. About how some countries are strangled by internal mechanisms that are overgrown, and systems that reward “outside” means of resolution, like baksheesh.
    He talked about how it has to do with transparency in government and ease of conflict-resolution. How the rules of engagement need to be streamlined for regular people, instead of sheathed in layers of regulation and bureaucracy. His thing was about laws and overregulation and ways that people have little or no means to achieve, given a strangulation of lawers and judges that were corrupt. I forget his name, but his main focus was on business and capital, and jhow it was locked-up by legal strangualtion – but it also has to do with people and their awarenes of their own surroundings, like not just walking out into a road full of traffic.
    There’s a story of how a student-mendicant was walking down the road, meditatiog and thinking Pure thoughts, of how the World was just an illusion (Maya), when suddenly an elepahnt came tearing down the road – which he ignored as an aspect of Maya. When the elepaht knocked him down and hurt him he was shocked. The teacher said, Didn’t you see the crazy elephant coming down the road? He said, “But the World is simply made up of Maya, illusion!” and the teacher said, “When a crazy elepahnt comes down the road, for God’s sake, watch out you fool!”

  5. I think Keith is refering to Hernando De Soto.

  6. Atanu,
    Very interesting. Here’s a note I had written sometime ago for a few folks.

    Hope it’s useful.

    This note/thoughts were based on a quote by Michael Jordan:

    There are plenty of teams in every sport that have great players and never win titles. Most of the time, those players aren’t willing to sacrifice for the greater good of the team. The funny thing is, in the end, their unwillingness to sacrifice only makes individual goals more difficult to achieve. One thing I believe to the fullest
    is that if you think and achieve as a team, the individual accolades will take care of themselves. Talent wins games, but teamwork and intelligence win championships.

    And the note was:
    The concept is as follows: “Look at optimizing the other person/people’s time value and efficiency”.

    We often focus on optimizing our time, our value – look at identifying our faults & working on them and improving. If we were to help others to optimize their time, the value would be much larger. For example: If I were to go on holiday for 3 days and were to leave my phone mail system as is. Each person calling would have to listen to 4 rings before being able to log his/her message. But If I were to set the ringer to one ring, I have saved the other person 3 seconds. 20 people leave messages for me and I’ve saved everyone 1min. Another possible example. If I (could somehow) improve my communication such that I were able communicate this message in a shorter, clearer and crisper form and as a result if I could save 5 min of your time. You would add more value to yourself with that 5 min. And that would have a multiplier effect.

    A different perspective to the old perspectives. Our job is to improve the value of the product to Sales so that they can sell it more easily. Improve their efficiency & value. Or to improve the value of the product to the customer such that he/she saves time and improves his efficiency – that would be customer delight.

    My point is that we should focus on both – first improving the efficiency of the system as a whole and then improving our own efficiencies. This has implications for teams, groups, Orgs, societies, countries.

  7. Forgive me for interjecting comments on a subject (economics) about which I am not well versed. Hernando de Soto, that’s him, I saw him on an episode of Uncommon Knowledge, a TV show produced by the Hoover Institution at Stanford, and I’ve read a few magazine articles by/about him and was impressed.

  8. hi atanu,

    i am not sure what those guys at lok sabha
    officials doing- this analysis must be done by them- at the least these stuff to reach them.

    again just pained. such stuff exist at every damn department.

    india did a mistake by investing in railways first. we should done excellent roadways first.
    we should take labour intensive projects, not capital intensive ones. – is that not simple??

    nehru should have helped village and small scale industries more, not the spend time in huge industries- capital intensive.?? again simple.

    – these set us back by at the least 10 years in economic development.

  9. Atanu
    What would it take for our policy makers to understand these basic facts that make so much sense to people all around the world ?
    How can we make our voices heard ?
    I wish some of those politicians and bureaucrats were reading youe blog. Any chance for you to contest for the public office? You don’t know me but you already have my vote !

  10. Atanu,

    I agree with your point and lot of other points that are said by many people. But we can get ideas for pennies and really what matters is execution. I am sure lot of us have million ideas but it does not do any good unless it is implemented. I am sure Nehru must have noted the importance of STOP sign when we studied in Oxford but I guess he did not think it as important enough.

    Constitution should be rewritten totally to accomodate the needs of the current India. Policies should be implemented based on the needs of the majority of the population not based on the so called policies of the political parties.

    We need a leader who would be brave enough to think about the development of the country and implement it, someone who has the bigger picture, not just someone who satisfies his/her interests or political party’s.

    We can tell the biggest drawback with India compared to China is Religion and Politics. We know that it has brought more harm than good to India. Both religion and politics go hand in hand.

    China does not have to deal with religion and the government is free to implement its policies without fear of creating religious outlashes. Compare this to India in enforcing population control.

    And political parties try to satisfy a religion/caste/sect and are so narrow-minded to think about anything else. People are so passionate about their religion/caste/sect that they fail to think about the country as a whole. People do not want to think about anything other than religion.
    “Unity in Diversity” is only on paper and I see more diversity than unity(if at all it exists).

    More later…

  11. Hi Atanu,

    I feel your sentiments. The situation in India is somehow the same as here in the Philippines. The only difference is most of the intersections here in Manila have the Stop sign that you’re talking about but what irks me is people don’t know what that means.

    I’m a Filipino who have travelled in the United States. I really appreciate the traffic scenario there compared to what I have back home.

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