Atanu Dey On India's Development

RISC and PURA

Recently I got an email from a researcher in Delhi who wrote, “I have been attempting to do an extensive survey of the PURA/Growth Pole concepts. I came across your RISC concept again while searching for related literature. . . What fascinated me the most was that this was the first piece written on such issues in India that is explicitly (and rightly) seeing this as a coordination failure problem, and talking about both infrastructure and accompanying services.”

He then went on to ask in what way RISC differs from PURA. My response, for the record:

RISC and PURA are in some sense diametrically opposed concepts. There is of course a superficial commonality of objective: economic development. But even that superficial commonality disappears once the objective is stated in more details.

PURA’s objective is based on what I would call “village centric development” while RISC is about “urban centric development.” PURA is about distributing economic activity among a group of villages and then connecting these villages so that people are constantly moving from one village to another to get something achieved. (In one version of PURA, I believe they want to connect all villages with bi-directional high speed modern alternative fuel buses — which makes me wonder why not implement PURA in Pune since this metropolis lacks a decent public transportation system.)

RISC concentrates all economic activity of a large number of villages in one location so that it can catalyze economic growth through lowered transaction costs, and economies of scale and scope are achieved. PURA attempts to keep people in 600,000 villages and disperse economic activity around the rural countryside. RISC says that the village as an economic social unit is inherently incompatible with development, and that the rural economy can be helped by urbanizing the population in place. RISC is feasible with limited resources while PURA is only possible if there is about $600 billion spare cash. RISC requires minimal government involvement, while PURA is what can be a license-permit-control-quota bureaucrat’s wet dream.

As vehicles of development, PURA and RISC are as similar as trains and planes — they both transport people but they are dissimilar in all other respects such as the principles on which they operate, where they operate, how much they cost, etc.

The underlying reason for the differences between the two models is perhaps that RISC is designed by a development economist, and PURA is what a technologist and educator (Dr PV Indiresan) could come up with and is promoted by a former defense administrator and technologist (Pres APJ Kalam) with very little understanding of the process of development or economics. But then, I guess if I were to design rockets, I would not be any more successful in that venture than non-economists are in designing economic systems.

Which brings me to a point that should be underlined. Our natural world is awesomely complex and our man-made world is becoming increasingly complex. We have come a long way from our hunter-gatherer past, or even our more recent agrarian past. Those were simpler times and it was possible for a non-specialist to make contributions to various fields of human endeavor. Amateurs had a chance because in some sense all people were amateurs. But now it is the age of specialists and specialization. This is not surprising since it is precisely specialization and division of labor that leads to our technologically and scientifically sophisticated world. You have to have medical training for you to be somewhat competent in the practise of medicine; you have to have formal training in law before you can hope to make fundamental and original contribution to the field of law; you have to have studied economics for a fairly extended period before you have a good chance at speaking knowledgeably about it. Of course, studying a subject does not guarantee that one cannot make a fool of oneself in that subject; it only decreases the probability of holding absolutely idiotic views in that subject.

I have noticed that people are especially susceptible to the illusion that on matters economic they are quite well qualified and that they don’t need to study the subject before holding forth on it. Very few would start arguing about the merits of neural-net computers vis a vis quantum computers without having more than a nodding acquaintance with computer science. But when it comes to economic development, many an amateur boldly ventures forth where experts fear to tread. Pony-tailed self-styled gurus hold forth on the subject as do technologists who wouldn’t recognize an economic argument if it came and punched them on the nose.

Does it matter? I think it does. People who are ignorant and are ignorant of their ignorance can, without intending to, cause a great deal of grief to others. One particularly egregious example is that of those who boasted of scaling the commanding heights of the economy after India’s independence. Their ignorance doomed India to a set of policies that made India an economic basket case. Tottering on the brink of disaster, a few policy makers woke up in 1991 and changed course slightly. But we are not out of danger yet.

Beware of monkeys.

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  • captainjohann, BANGALORE, INDIA

    Sir,
    People like kalam and indiresan are educator and technocrat respectively and so their idea is flawed is a smokescreen created by a bunch of NRI economists who normally stay in USA and visit India during their holidays.
    What kalam meant was like that of mobile phone revolution, just give them good EDUCATION in rural areas.They are not talking about IITs,IIMs but ordianry basic education in ENGLISH. The rural politician is ensuring that in the guise of peseudo/patriotism he is not allowing the villager to be educated in ENGLISH.he has to move to city to give this basic need so that his children will have something of a future.People in rural areas are happy with the food they get, but what they need is a good descent school, hospital as now the entertainment needs are met by satellite TVs,mobile phones etc.Kalam and indiresan talked plain COMMONSENCE while you talk economics of an NRIs point of view.

    Atanu’s response: I am truly sorry that I don’t censor comments. This comment, for instance, is mindless drivel and I feel embarrassed that it shows up on my blog. I hope that the average commentor on my blog is not so confused.

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