This column first appeared in The Hindu, on August 27, 2014. Like other products of the Brookings Institution India Center, this is intended to contribute to discussion and stimulate debate on important issues. The views are solely those of the author.
The Planning Commission is neither a constitutional nor a statutory body, but over the years it has acquired tremendous power of distant planning which is unsuitable to a country as diverse and complex as India. Let us neither reinvent nor restructure such a body. Let us, instead, make a clean break and replace it with a think tank which supports high-quality independent research to support policymaking in India.
The fundamental reason for this is that basic research is like defence: a pure public good which the private sector can support only in limited ways. The government, therefore, should provide the necessary support for this. The reason India needs such a think tank is that despite enhanced federalism and overall liberalisation, the government will remain a dominant and critical player in the Indian economy over the next several decades. Though the most visible function of the Planning Commission — planning and enforcement of the Five Year Plans — can be shifted to the States and other Ministries, policymaking will remain integral to the functioning of the government at the Centre and State levels and must be supported by a think tank. Such an entity must be established with the central mission of evolving into a centre of excellence for policy research.
The Narendra Modi government has the historic opportunity to finally devise a method in the madness of Indian policy-making by thoroughly professionalising this space. An independent research think tank comprising experts can provide careful analysis as well as give intellectual heft to innovative policy solutions. Such a think tank can also serve as an entity which fosters a new culture of critical thinking, openness, and debate.
Support for research
Research is seldom monetised unless it is within private corporations where it is meant for furthering business interests. Research to support policymaking, on the other hand, is of the nature of a public good. It is of immense value to society, but how do you put a price on a research paper on poverty? Being a public good, such research has to be supported through external means. Internationally, the most common form of financial support for research is philanthropy and government funding.
Historically, India has had a rich culture of philanthropy. Unfortunately, however, it has largely remained limited to religious activities and institutions, where donors rush for spiritual dividends. Philanthropic support for research in India is abysmal. This is in stark contrast to the U.S. where private philanthropy has long supported scholarly research and where most of the top research universities were started with private endowment and foresight. Despite massive early private support (or perhaps because of it), the government in the U.S. became a huge supporter of research with growth in the importance of the National Science Foundation, the National Institutes of Health and the National Endowment for the Humanities. There is also substantial research support that comes from federal, state, and local governments in the U.S. We have to create such a culture of public support for independent research in India, so that policymaking, at all levels, is based on scientific evidence and not institutional memory and anecdotes.
A natural source of support for independent research in India can be found in the Companies Act, 2013, which mandates qualifying companies to contribute at least 2 per cent of their average net profits from the preceding three years to Corporate Social Responsibility (CSR). With such mandatory philanthropy, approximately 8,000 companies operating in India will be required to spend an estimated Rs.150 billion annually on CSR activities. Given the public nature of independent research, this should fall prominently in the realm of CSR activities. But whether the financial support for this think tank comes directly from the government or from philanthropy, its governance structure should be designed to maintain the highest standards of credibility and independence such that financial supporters have no control over the research. The governance structure of such a think tank is critical to its independence and success. The government needs to come forward and make consistent, systematic and long-term investment in such an institution. But while the financial support would be public in nature, it must be an autonomous entity that lies strictly outside government control.
Globally, there is widespread evidence that establishes the strong effect that governance structure has on research output. Autonomy and competition are positively correlated with research output in universities and institutions. There is little sense, and possibly some danger, in giving greater autonomy to a publicly funded think tank if it is not in an environment disciplined by competition and evaluated by outcomes. And there is little sense in promoting competition if the institution doesn’t have autonomy to respond with a more productive or efficient performance. It is therefore a combination of autonomy and competition which will deliver high-quality performance from such a research institution.
While the government would naturally exercise some influence in determining priorities for the think tank, the outcomes should be open to scrutiny and evaluated only through peer review by experts. This would be the most efficient form of self-regulation for the institution because it would ensure a culture of accountability which is merit-based, and which would ultimately lead to sustained superior performance. Independence of this institution will free scholars from a sense of gratitude and trepidation which commonly marks public funding, and incentivise them to produce and disseminate high-quality research.
Skilled experts, not bureaucrats
Few would disagree with the observation that most think tanks in Delhi have the dubious distinction of becoming a parking lot for political cronies and retired bureaucrats. If the Planning Commission is to be replaced by a serious research think tank, then it must have skilled experts, not unskilled political appointees or unaccountable bureaucrats. Domain expertise and competence rather than political loyalty and bureaucratic seniority should be the eligibility criteria for recruitment. The search process should be transparent and open to all experts — global and domestic. Creating artificial barriers to entry will restrict the talent pool and withhold the institution from realising its full potential. Given how difficult it is to attract high-quality experts, their appointment must also be done strictly independent of the Ministries and the bureaucracy. High-quality scholars will drive the agenda of high-quality research such that this institution becomes a producer and repository of knowledge and serves as the “go-to” place for all government ministries. Given the diversity of performance and experiences of different State government, this think tank can also serve as a crucial platform for knowledge sharing between different States.
However, given the stranglehold of the bureaucracy over the functioning of our country, this will be the most rigid knot to untangle for Mr. Modi. His slogan of “Minimum Government, Maximum Governance” is a call for efficiency. Let this new think tank be created as a direct response to the exigencies of the changing Indian economy. The opportunity cost of sticking to inefficient policies and non-performing schemes is too high for a poor but aspiring country like ours.