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India, service delivery and aid: Devesh Kapur responds

Shanta Devarajan's picture
Dear Shanta: I want to clarify. My point was not that the World Bank stop or reduce lending to India per se. Rather that it focus on those areas where it has comparative advantage (how do we know what areas those are?), conditional on Indian states’ doing more on social sectors but using some output performance indicators rather than inputs. I do not disagree with you that "For one thing, there is no guarantee that public services will improve if the Bank stops lending money for them," nor that "there is a good reason why the combination of knowledge and financial assistance can be more powerful than knowledge alone." But that justification can be used to continue lending in almost any circumstances, since how can we ever be certain that the alternative will not be even worse? I think you are underestimating the harm that is being done in continuing to give Indian states an external crutch when this is absolutely the basic responsibility of any state. Fundamentally, the financial and human resources are there in India. China and Cuba achieved this, as did Kerala, without fancy randomized trials, consultants, reports, and any external money. I do think we (not just the Bank but academia, etc...)are a vested interest group to some extent at least. We see self-interest everywhere except in ourselves -- which is why we are very reluctant to walk away. How would we get more papers and publications if we did that? Or the World Bank more lending and reports on how much it is doing for the MDGs and justifications for IDA? As you know I have refrained from writing and speaking about the World Bank and India ever since we wrote the history. I did not write this lightly. If you are interested you could post these comments on your blog and ask and see if Richard Webb shares my assessment (and is it different in Peru?). We may be wrong, but I do think given the amount of time we spent in trying to understand the Bank (yes, things have changed since then!), our perspective has some empathy with the institution but also a certain distance. Regards, Devesh

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The contracts for setting up of the Centres are given through a bidding process by the respective state governments. It takes about twelve months for execution of the contract.

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