Institutions Matter

Why is it that some countries continue to be poor despite being blessed with abundant natural resources, human capital and technology transfer from developed countries?  Many resource-rich African countries mired in poverty and bloody civil wars come to mind. Even India, despite its much lauded economic growth of recent years, can be added to the list of these underachievers. 

According to Tim Harford in The Undercover Economist (2006), the answer lies in the poor nations' institutions or lack thereof.  As he puts it succinctly, "institutions matter".

Most resource-rich poor countries lack institutions capable of holding executive power in check and making them accountable to the people. As a result, the ruling cliques and their cronies can cream off the proceeds from the resources with impunity and become obscenely rich while the vast majority of their compatriots sink deeper into poverty.

"Institutions matter".  This phrase popped into my mind again when reading about the 1843 British annexation of Sindh (Punjab) in John Keay's India: A History (2000). One of the last so-called princely states to be bullied into Pax Britannica, Sindh had been able to keep the British at bay with diplomacy and a modern military under the inspired rule of Maharaja Ranjit Singh.

On the eve of the First British Afghan War in which the British Raj suffered one of its most disastrous losses, Ranjit Singh, the Bonaparte of Sindh, the Lion of Punjab, died, in 1839.   

Keay writes: "A philander of many wives and more women, he was not without potential successors. Yet so personal had been his rule and so absolute his authority that the institutions of sovereignty and government through which a successor might establish himself scarcely existed."

The result was predictable. In the midst of the succession crisis that engulfed Sindh, the British, in the words of the victorious British general, pulled off a "very advantageous, useful, humane piece of rascality."

'Rascality' actually sums up the Indian, or perhaps any human, history.

Keay opens his narrative with the ancient Indian concept of Matsya-Nyaya or 'fish law' according to which big fish devour small fish. The subsequent laundry list of dynasties great and small that subjugate various parts of the Indian sub-continent through the millennia appears like a rogue’s gallery of history.

When the various dynasties are not oppressing their wretched subjects by imposing extortionate taxes to finance their ego-boosting monumental extravagances, they are at each others' throats, pillaging the defeated kingdoms’  treasuries and polluting their women.

This gives lie to the myth of a golden age, the so-called ‘Ram Rajya’, to which many people of certain persuasion look back with great nostalgia in the Indian sub-continent.  

Keay has a slippery grasp of Sanskrit words and phrases but he, nevertheless, convincingly demolishes many cherished mytho-historical sacred cows of India. For example, he cogently argues that the epic Mahabharata predates Ramayana, a startling proposition only an outsider like Keay could perhaps make.

After reading about the umpteenth petty cutthroat performing a ritual digvijaya or world conquest and assuming the title of Maharajadhiraja ,  one starts to contemplate the august personages of surviving Maharajadhirajas with fresh eyes.

How Many Springs Do We See?

Pear blossoms pale white, willows deep green,

When willow fluff scatters, falling petals will fill the town,

Snowy boughs by the eastern palisade set me pondering -

In a lifetime, how may springs do we see?