Comparing the Indian and Chinese governments

This article appeared in Business Standard on July 18, 2007. The complete article is an interesting read. It compares the perception about Indian & Chinese governments (governance indicators) as viewed by outsiders. On almost all the measures India's performance has increased between 1996 to 2005. This increase reflects the perception that India has become better governed over the last 10 years and is borne by the fact that FDI is increasing.

There is considerable interest in India on the subject of how to increase government effectiveness, and how to improve governance. The World Bank has released an update on their cross-country governance measurement effort led by Kaufmann, Kraay and Mastruzzi. To a significant extent, these numbers are drawn from surveys. They reflect some mixture of both perception and reality. A comparison of India and China in this data is revealing.

Measure	India-1996	India-2005	China-1996	China-2005
Voice and accountability	52.2	58.2	4.6	4.8
Political stability	14.9	22.1	34.6	33.2
Government effectiveness	50.7	54.0	66.8	55.5
Regulatory quality	44.4	48.3	54.1	46.3
Rule of law	61.0	57.1	48.1	45.2
Control of corruption	40.3	52.9	56.3	37.9
Simple average	43.9	48.8	44.1	37.2

The table shows percentiles for each of the six measures, for both India and China for 1996 and 2005. For example, a value of "61" means that the country was ahead of 61% of the countries of the world.

India has improved significantly on all dimensions other than `Rule of law'. The Chinese score was flat or worsened on all the measures. The most important difference which leaps out of the table, of course, is the strength of India on `Voice and accountability', where the Chinese Communist Party tolerates none.

Traditionally, there has been a sense that Chinese government effectiveness was superior to that of India. That was certainly how surveys saw things in 1996: China was at 66.8 while India was at 50.7. By 2005, perceptions had shifted - India had moved slightly to 54 and China had dropped sharply to 55.5. A closer look at this time-series shows that India achieved a high of 57.8 in 2003, and has dropped after that.

Did governance in India improve significantly between 1996 and 2005? In many areas of economic governance, looking back at India of 1996 suggests that far-reaching changes have taken place. In 1996, telecom was dominated by the DOT. There was no NHDP. The growth of private ports or airports had not happened. NSE and BSE had begun electronic trading but there was `badla' and equity derivatives trading was banned, and there was no NSDL. The capital controls were much worse. The fiscal problem was alive and well: there was no FRBM and the 12th finance commission had not yet blocked the growth of deficits at the state level. The reforms of tax policy and tax administration, which have finally got India into a phase of high growth of tax revenues, had not yet begun. Tariffs were high, and the surge of manufacturing competitiveness had yet to come about. There was no New Pension System.

Economic governance in India in 2005 is, of course, deeply flawed; but there is an unmistakable sense of progress when compared with 1996. However, the most important foundation of governance is law and order and the judiciary. In that area, it looks like India has made little progress between 1996 and 2005.

India Driving Direction Sites

It is very easy to get driving direction in US. All the streets have names which makes it easier to give the directions. This also makes it easier for websites to give driving directions online. However, in India, where cities are not well planned and roads are not named it becomes difficult to give directions based on them. Therefore, people usually rely on landmarks and asking people on the streets to reach their destination.

Though it will take years to get a US style driving directions progress is being made. The following sites are trying to make getting directions a little easier:

1. mapmyindia.com - covers top 80 cities
2. Yahoo Maps India - Google Maps like cite
   
3. www.routeguru.com - a new site
   

British Grand Prix - 9 Gone 8 Left

After 9 races Hamilton leads Alonso by 12 points and Raikonen by 18 points. It will be very difficult to defeat Hamilton for constructors championship unless his car plays spoil-sport.

British GP had an interesting 1st half with Massa trying to make up places after he had to start from the pit lane. In the front Raikonen took the race to Hamilton and closely followed behind him. Once Hamilton pit in for his 1st fuel stop Raikonen put in very fast laps to come out ahead. Alonso on his pit stop had very little fuel put into and came out ahead.

Hamilton lost a lot of ground between 1st and 2nd pit stop. After Alonso went in for his 2nd pit stop Raikonen again put in few stellar laps to come out ahead of Alonso. And that's how they ended.

The 2/3rd of the race was interesting and only after 2nd pit stops did everyone settle in on their final positions.

I am standing by my prediction of McLaren winning constructors. And for drivers it will be very tough to beat Hamilton.