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The state of the state

November 17, 2013

 Abstract: The role of a state in the economy may be divided into two categories — enabling and delivery. Under the first, the state defines the objectives and rules and then monitors and assesses the outcomes of services provided by non-state entities. In the second, it takes on the responsibility of service delivery directly. In India, over the past two decades, the state has swung tangibly from delivery to enabling.  While this has benefited the economy, the disruptive structural constraints suggest that the state has not yet found the right balance. Three main reasons are: (a) the private sector has not been able to take on the service delivery functions previously performed by the state; (b) there has been little movement towards accountability for efficient execution of  state led delivery; and (c) institutional structures and human capital formation have lagged far behind what is actually required. Regular and incremental change is key with respect to these focus areas when it comes to redefining and redesigning the role of the state.

Keywords: State; institutions; enabling role; delivery role; private sector; public delivery; benchmark; human capital

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