Acquired Incentivo-Deficiency Syndrome

The government has it

Why a government with an A-list of economists and reformers failed to deliver a tenth of the expectations and a thousandth of its promises: Because it suffers from Government AIDS, The Rational Fool:

The virus causes in everyone along the chain of command in the government, AIDS [Acquired Incentivo-Deficiency Syndrome]. Government AIDS, in its milder form, causes lethargy and breeds do-nothings through a variety of afflictions, including nepotism, reservation, and sycophancy. In its more virulent form, it causes the cancer of corruption.

Either Mr. Chidambaram is being disingenuous in blaming the bureaucracy, or he has no clue about the advances made in the economics of incentives during the last 50 years. [The Rational Fool]

Related Link: Corruption Misunderstood: Why blame the middleman? My op-ed in yesterday’s Mint, It’s done with incentives, not platitudes, an earlier post; Atanu Dey, Amit Varma and Andy Mukherjee on the why the NREGS will guarantee rural corruption.

1 thought on “Acquired Incentivo-Deficiency Syndrome”

  1. Perhaps, that is why the SEZ policy is so important. The indian government only has two skills: Squander tax revenue, and serve as a road block to business.

    Even if this policy serves only to relocate already existing business, this is a boon for the country. I don’t understand why people look at SEZ’s and argue that they will have a devastating impact on the finance ministry, or that they will only serve to relocate new investments that are already planned. The only argument that is legitimate is the limit of 5,000 hectres (which may soon be increased to 10,000).

    Also, the push being given to retail by domestic industrial powers will have a dramatic impact throughout the country. It will serve to drive agribusiness, and more importantly will reduce food inflation which is critical to both increasing the quality of life of the average indian as well as allow a more lax monetary policy which will help indian industry.

    The increases in outlays to education and the introduction of the VAT are other progressive steps.

    You are completely justified in stating that Singh fell way short of expectations both in terms of the breadth and extent of reforms, but if the SEZ policy and development of the retail industry are allowed to continue we may look back at their tenure in a much better light.

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