LEADING ECONOMIC GROWTH-A LEG UP
Attending the Leading Economic Growth (LEG) Programme at the Harvard Kennedy School of Government has been a journey of personal development and learning for me. The usual approach to development policy has been very traditional and linear in most countries. An understanding of the economic history is important to understand the underlying conditions affecting the economy, as many problems of the present are rooted in the past. Similarly the economic shocks and policies that were successful or failed provide possible insights on solutions to be adopted today. However, the program brings the focus to the problems and not to the solutions. It provides knowledge of tools and skills that help in growth diagnosis, designing the policy space and , devising growth strategies in high-dimensional space.
The LEG programme has given new insights on constructing and deconstructing problems and forming interative strategies to tackle those pain points. It prods one to think analytically on teams and frameworks to do environmental scanning , identify right problems, design interventions and structure them logically in defined order and timeline. The use of concepts like 5 whys, Ishikawa or fish-bone diagram, Problem Driven Iterative Approach (PDIA) has given me a new perspective on appraching problems and tackling them through focused interventions by teams of experts and implementers based on root cause analysis. The 5 whys and the fish-bone helps one to go into the most granular level-of identifying why a problem exists. The way the root cause of the problem is revealed, is quite an eye-opener.
The PDIA approach further helps in actually constructing the teams (The Black Belt Teams ) to make the desired interventions with defined responsibilities. It showcases the importance of engagement both within and outside the implementation agencies in order to get the desired feedback and make meaningful interventions. It has helped in demonstrating the importance of going into the minutae of all issues and the importance of detailing steps. The criticality of support of authorisers for any policy intervention was also well captured by this approach.
One of the most facinating tools for me personally, was the ‘Atlas of Economic Complexity’. It was like a revelation to hear Prof Hausmann explain the importance of knowhow and how it affects economies and their development paths. It made me look at the economy from a completely new perspective- the perspective of economic complexity. ‘Economic Complexity’ appears to be an esoteric concept. However, complexity here is the antonym to itself- it actually explains the economy simply! It reveals that as countries move along the development path , they diversify into more complex products. The degree of complexity depends on the embedded knowhow in the country. The product space defines the interrelatedness of products. It helps in defining the diversification path of the economy and thus facilitates in designing the growth strategy. Countries find it easier to diversify into new products that are closer to the existing product space. The export complexity and export dynamics are captured within the product space. The diversification of products in the product space helps to determine the strategic path to be adopted: Strategic Bets approach, Parsimonius Industrial Policy Approach, Technological Frontier Approach and Light Touch Approach. It further goes into potential growth opportunities. I believe this, identification of growth opportunities is an eye opener and will prove to be very useful for countries while designing their growth strategies.
The importance of inclusion has been an important part of the development policy in India. The impact of inclusion on growth has been captured very well in the program. I really enjoyed the module on the ‘Sense of us’ . We all are an amalgam of various identities: national, regional, language, religious, ethnicities, castes and professions. We also identify ourselves in terms of the educational institutions we have studied in, the clubs we are members of, the sports team that we supprt and so on. Many of us may not want to be identified in certain brackets which they think are personal to the individual, like religious belief, caste etc. But others connect with each other based on these very identities. The importance that the ‘Sense of Us’ plays in the development sphere was one of the key take-aways for me. Although the ‘Sense of Us’ is always lingering in the back-ground in all policy matters, a recognition of the same will help in designing policies that are able to achieve their objectives in a more fulfilling manner.
High band-width organisation : The development process has been described as the co-evolution of products and capacities. Thus, in a high-dimensional world production function involves private inputs that come from the functioning of the market and public inputs that come through a different process. Public inputs complement private inputs. Their presence makes a huge difference in the efficiency of utilization of private inputs. The demand and supply of public goods is done through the legislative process and executive decisions. In some countries it is more transparent while in others there are more dysfunctionalities. The lobbying for public policy takes different forms in different countries: through lobbyists, political parties etc. The alignment of interests between private investors and policy makers is at times hard to present to the public. Benchmarking through various indices helps to measure progress on various deliverables/products. There are two approaches to finding solutions in high-dimensional policy space:
· Setting well defined priorities
· Increasing the ability of the policy process to deal with more issues, i.e. the ability to operate at higher band-width
Increasing band-width in the policy space increases the need for information by the government on the obstacles and opportunities. Thus an effective development strategy would build mechanisms to enhance capacity for processing ideas and information. The idea of having an institution with high band-width to identify possible obstacles and opportunities is at the fulcrum of the growth strategy. In India such mechanisms/institutions having more or less this kind of mandate exist in the form of the Economic Advisory Council (EAC) to the Prime Minister and the NITI Aayog. The NITI Aayog is the government think-tank.
Leading Economic Growth is thus about building high band-width capacities in a complex economic space. I believe the program was very comprehensive. I intend to use the 5 whys, the fish-bone diagram, the PDIA approach in future in all policy diagnosis and design. I believe this approach is also useful in other spheres. I intend to develop upon the potential growth areas identified through the ‘Atlas of Economic Complexity’. I would like to develop upon the ‘Atlas of Economic Complexity’ for the States of India with the assistance of the ‘Growth Lab’. The learning about the importance of the high band-width organisation in the growth strategy is a concept which I would further like to develop upon.
The perspective and the insights gained through this program will hone my skills as a practitioner of public policy. I believe this program has set me on course, on a new journey of learning and development. One of the best things I have done during the pandemic is to take up this program. I would like to add that I shall never look at fish in the same way again! In India there is a belief that the regions where fish is a staple food, the people from those regions are considered to be very intelligent. No wonder so!! I am sure Prof Hausmann and Prof Andrews are fish eaters!
