It’s done with incentives, not platitudes

Why strive for excellence when mediocrity will suffice?

You can’t blame Dr Manmohan Singh for telling us what the problem is. Soon after he took office, he told us that fixing the bureaucracy was crucial for India’s development. Last year, he said that the Naxalite insurgency is the biggest threat to internal security. And, now, in a Rediff article he tells us:

We cannot afford a ‘business-as-usual’ approach to any aspect of life. The world is changing rapidly and we must learn to keep pace. We have to do more to increase the productivity of every Indian, the productivity of our land and of capital.

Each one of us must set our sights higher and aim to be the best in what we do. Our schools and colleges must aim to be the best in the world. So too our businesses and laboratories. So too our services and utilities. I despair of the ‘chalta hai’ attitude of so many of our people. [Rediff]

It’s quite likely that his record on this front will be as dismal as on civil service reforms and the war on the outlawed Communist Party of India (Maoist), otherwise known as the Naxalites.

Here’s why. Because his government has done nothing to improve the incentives for excellence. Why would a marginal student aspire to be in the top 5% of the class if reservations guaranteed that person a place in an engineering college as long as he made the ‘cut-off’ for his community? And why would the marginal student in the engineering college attempt to score top grades, when quotas guarantee a government job? And why would the marginal government employee strive for excellence if promotions can be had with far less effort, as long as there is a quota?

Mercifully, there is no ‘chalta hai’ attitude in the private sector, especially in those segments that have been opened to global competition. That’s one part of India that is indeed striving for global excellence. But why would a marginal employee in a private sector factory strive for excellence when he knows that it’s virtually impossible to sack him for underperformance. Far from easing labour laws that not only stifle excellence but also prevent millions of people from securing employment, Dr Manmohan Singh’s government wants to introduce job quotas in the private sector.

Dr Manmohan Singh’s rhetoric does not square with the reality of his government’s policies: far from creating incentives for excellence, it is determined to creating an entitlement economy.

In a recent op-ed in Mint (via India Uncut), Ramesh Ramanathan, calls for “a national campaign that gets to every movie theatre and television channel, autorickshaw and truck, tea shop and paanwala, a campaign that exhorts individuals to think differently about how they approach their work”. But just like prime ministerial platitudes, mere exhortations are unlikely to do the trick. If excellence is what we seek, we must organise our society around merit. That will require the right incentives. It would be a much better idea if the national campaign is directed at the government instead.

9 thoughts on “It’s done with incentives, not platitudes”

  1. You are a racist 🙂
    I somehow feel like quoting

    Capitalism is the unequal distribution of wealth, communism is the equal distribution of poverty.

    🙂

  2. As far as reform in civil services is concerned, I agree with most of your points. But doesn’t RTI qualify to be one of the factors to be considered as far as reform in civil services is concerned?

    Just a query though, I may be wrong.

  3. BD,

    Yes. It counts. But doesn’t even scratch the surface as far as reforming the civil service is concerned.

  4. Incentive compatibility, moral hazard and adverse selection are not in the lexicon of the eminent Cambridge and Oxford economists, who formulate India’s social and economic policies. For them, Nash equilibrium and market for lemons are just artifacts of demented minds! They are trained in the mold of Fabian Socialism. From each according his/her ability and to each according his/her needs, by democratic means, of course.

    To finesse a possible adverse Supreme Court judgment in the quota case, I suggest that the UPA Government immediately pass the Performance With Social Justice Act of 2007. All Educational institutions must reserve the top grade (A-, A, or A+) in exams according to this egalitarian and socially just formula: 22.5% for the SC/ST students, 27% for the OBC, 15% for Muslims, 2% for Christians, 2% for Sikhs, 33% for girls, … Oops, am I overshooting 100%? Heck, why not a few percentage points error when social justice is at stake?

  5. //Why would a marginal student aspire to be in the top 5% of the class if reservations guaranteed that person a place in an engineering college as long as he made the ‘cut-off’ for his community?//

    To get the college of his choice and course of his choice….

    To get into COmp Science in Anna University, the difference between OC, BC and MBC cut offs are marginal

    Same for Medical Colleges also

    Does this gentleman know that the cut off for MBBS in tamil Nadu (with history of reservation for decades)

    // And why would the marginal student in the engineering college attempt to score top grades, when quotas guarantee a government job? //

    To get the job of his choice and place of his choice

    //And why would the marginal government employee strive for excellence if promotions can be had with far less effort, as long as there is a quota?//

    This is the most stupid argument i have seen (of course most – though not all – of anti reservation arguments are stupid)

    Promotion irrespective of performance is guaranteed for EVERY ONE IRRESPECTIVE OF QUOTAs….

  6. Tamil Nadu Cut Off in MBBS

    General – 97.75%
    BC – 97 %
    MBC – 95.5%
    SC – 94 %
    ST – 90 %

    This is what happens when you give reservation ….

    Now, I am sure that the author understand as to why the students from backward communities will work hard…..

    By the way, Nitin, what is your opinion about Institute Quota in AIIMS.. Why no one is opposing that …. Can you please explain

  7. To get Comp Science in Anna University, a student from BC or SC has to Score more than the OC Cut Off….

    …..

    To know how Reservations have uplifted the society, see the MBBS Admissions

    Open Seats – 430

    321 BC students,
    57 MBC students
    14 SC students will get into the open competition.
    38 Forward Community

    This literally means that students from BC (321) and MBC (57) score well than the Forward Community (38) Counterparts

    This also means that the students from the so called forward community are able to get LESS THAN 10 percent of seats available……

    That is if 430 seats are available forward community gets 38

    If 100 seats are available Forward Community will get 9 seats (38*100/430)

    If 81 seats are available Forward Community will get 8 seats (38*85/430)

    So WHEN 100 seats are available

    WITHOUT RESERVATION
    FOrward Community will get 9 seats

    WITH 18 % reservation for SC and 1 % reservation for ST
    Forward Community is getting 8 seats

    That means, reservation is giving JUST ONE OUT OF THE 100 Seats from Forward Community to the SC and ST

    Why then there is such a huge cry against Reservation ??

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