Frameworks
Let us assume you have a car. You fill it with a full tank of fuel, get it washed in a nice car spa, change the seat covers, and air the tires. But if the car engine is not working or if it is not working efficiently, all those other things you do won't really help you get from point A to point B. Karthik Muralidharan, in his book, compares the Indian state to a 1950s car. According to him:
The 1950s were the last time we made systematic investments in the institutional foundations of the Indian state. Since then, we have continuously added expectations to the state without commensurate investments in the state itself.
As far as a state is concerned, in order to meet citizens' expectations, it must possess the necessary capacity. But how do we think of state capacity? Karthik Muralidharan, in his book, provides a framework to think about this.
When we think about state capacity, it is important to differentiate between the scope of a state and the strength of a state.
1. Scope of a state
This refers to the range of goals that a state takes on. Traditionally, states were expected to do only a few tasks. According to Adam Smith:
It is the role of the state to provide for the defence of the country, to enforce contracts, to provide for public works and infrastructure, and to protect society from the injustice or oppression of other individuals.
But after the second wave of democracy, the idea of a welfare state became popular. More and more states, like India, took on more tasks like promoting economic growth, regulating firms and economic activity, delivering public services, improving human development, etc. But a state can only meet the requirements within its scope if it has the strength to do so.
2. Strength of a state
This refers to the ability of a state to achieve its goals. The strength of a state is not just about the amount of money spent on each of its goals. It is mainly about how efficiently a state can convert its expenditure into desired outcomes.
Sometimes states define the scope of their institutions ambitiously without being cognisant of their strengths.
Let us take an example.
The per-capita number of government workers (no. of government workers per person) in India is one-fifth that of the United States of America. The number of police officers per capita, for example, is only 135 per 100,000, one of the lowest rates in the world and far below the median (318) or mean (333) of police officers per 100,000 capita in the rest of the world.
Although India has such limitations in terms of personnel (the strength of the state), it doesn't reflect in the regulatory burden imposed on them (the scope of the state). In a paper written by Rajagopalan and Tabarrock, they say this:
India has essentially all the inspections, regulations, and laws a developed country such as the United States has, but at approximately $235 of federal spending per capita, the Indian government simply cannot accomplish all the tasks it has assumed. Consider: U.S. federal government spending per capita was five times higher in 1902 than Indian federal government spending per capita in 2006. Yet the Indian government circa 2006 was attempting to do much more than the U.S. government did in 1902.
State capacity is not just about the scope of a state and the things the state aspires to do. It is also about the strength of a state and the things the state can do.
In his book, Karthik Muralidharan also gives six key systematic elements of state capacity. These include the systems and processes for:
1. Collecting, Analysing and acting on data
2. Recruiting, training and managing personnel
3. Ensuring quality of public expenditure
4. Collecting adequate revenue and doing so efficiently
5. Optimising tasks across layers of our federal governance structure
6. Effectively leveraging non-state actors, including the private sector and civil society
Thumb rule: It is important to consider both the strength and scope of a state while thinking about state capacity. Think about the 6 key elements of state capacity when you think about the strength of a state.