Mirror, mirror on the wall, which is the most dynamic state of them all?

An interesting and comprehensive piece in Ideasforindia.com by Maitreesh Ghatak  of London School of Economics and Sanchari Roy  of University of Warwick.

They look at this burning issue of which State has performed better than others. And whether we can ascribe this to so called political leaders. It is comprehensive as it compares States across many indicators and not just chosen ones. So it compares the states across growth, HDI, poverty and inequality measures.

If we simply look at the figures, four facts will jump out: first, Bihar has improved the most in the 2000s, even though it has been at the bottom of the list for all indicators and still has a fair distance to go before it can climb above the national average; second, Kerala has far outpaced other states in terms of the HDI all through; third, Rajasthan was the star-performer in terms of reducing inequality; and fourth, Maharashtra and Gujarat have consistently been top performers in terms of per capita income and its growth, with Haryana and Tamil Nadu deserving mention on this count as well. All these achievements are noteworthy but it is hard to single out any state as the top performer in the 2000s.   
To the extent this assessment goes against the view held by many people, independent of their political leanings, that Gujarat has done spectacularly well under Mr. Modi, the explanation lies in the method that we have used to examine available data, namely, the difference in difference approach. 
In particular, this is what we tried to figure out: did a state that has for a long time been one of the most developed states in terms of per capita income, and was already improving at a rate higher than the rest of the country, accelerate further and significantly increase its lead under Mr. Narendra Modi’s stewardship? Our analysis shows that this did not happen. Both Maharashtra and Gujarat improved upon an already impressive growth trajectory in the 2000s, but the margin of improvement was too small to be statistically meaningful. So while Gujarat’s overall record is undoubtedly very good all through the last three decades, its performance in the 2000s does not seem to justify the wild euphoria and exuberant optimism about Modi’s economic leadership.  
Reasonable piece and on expected lines. It is difficult for one state to outperform on every metric. Indian States have evolved their own models of development and growth just like we see in case of countries. Nordic Model is very different from Anglo Saxon which is different from Asian and so on..There is no one metric to suggest this model is better than that. Researchers which look at growth outcomes likely to favor Anglo-Saxon, those who care for stability will vote for Nordic and so on..
But the post also connects to a broader point. It is all about hype at the end of the day. There is hardly a single factor or one individual which determines economic outcomes. But then somehow the story catches on via the media and other channels. As Prof Shiller argued in a recent column, it is a case of narrating the economic tale well. And somehow this hype over Gujarat model and magic governance has been built. Even if this piece suggested that Gujarat actually achieved better outcomes, it was unlikely to be the case that a single person was responsible.
We had similar notions when Dr Manmohan Singh took over as PM. There was tremendous hype over his appointment as people felt he was the main person behind 1991 reforms.  So India would only grow and grow. Well, he was the finance minister surely but there was a whole team behind it. And then the reality struck and there was a mean reversion of sorts. People and even Dr MM Singh realised that good times do not last forever and may not repeat themselves.
Having said that, some credit should go to Gujarat administration for not letting things slip. They tried to maintain things which is a big thing. Somehow, we never give credit to such outcomes.  Stable and boring is equally important. How often we see things slip in India’s case as we have seen in cases of certain states..
We believe too much in hero worship and always look for certain people to spice up things. We remain in yada yada hi dharmasya mode and expect too much from certain individuals…the individuals also over-promise and end result is disappointment for all..
Instead we should be building teams and allow people to build their public policy careers..and then bring the consistent performers to lead places…make it more continuous and systematic than random and glamorous..
It is high time we let outcomes take precedence over people…institutions need to be built which can perform over a long period of time and are not really affected by people coming in and going out…

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