External Professionals in Public Policy-Making – I

Written by  //  December 28, 2010  //  Economic & Social Policy  //  4 Comments

I see a change taking place in the public policy-making process in India with the increasing number of external professionals in governmental policy-making positions. In this two-part piece, I place anecdotal evidence of this trend and explore the reasons for this change. In this first part, I look at the use of external professionals which point towards a changing trend.

Traditionally, public policy-making in independent India was the exclusive domain of the government with most work done by the Executive dominated by the Indian Administrative Service officers.[1] While there were external influences on government policies from business groups, labour unions, farmer associations and other organisations, there was only a limited formal role for individuals other than career public servants in the process of policy formulation. However, this is changing with the entry of external professionals. This trend began with a few rare appointments in the 1980s and 1990s. Especially, Rajiv Gandhi’s appointment of Sam Pitroda, a telecommunications expert and an entrepreneur, as his advisor to transform India’s telecommunications and information technology infrastructure is part of India’s telecommunications growth folklore today. This trend has however intensified in the 2000s with many appointments to important positions in the government being filled by non-governmental professionals. 

The second term of Manmohan Singh led government has seen a greater number of external professionals working in various governmental advisory positions. In 2009, Kaushik Basu, a professor of economics at Cornell University was appointed as the Chief Economic Advisor to the Ministry of Finance, and in 2010, TCA Anant, a professor at the Delhi School of Economics, was appointed the chief statistician of the central government. Recent appointments have transcended economic policy-making. For instance, the National Innovation Council, set up to develop a national strategy on innovation with a focus on an inclusive growth, consists of several leading professionals from fields such as media, health, business, academia, and others. In an encouraging move of extending this trend to lower levels, the Planning Commission started a programme of short-term employment for “Young Professionals” renewable annually to work on policy formulation and programme evaluation. Some of the young professionals recruited by the Commission come from backgrounds such as education, healthcare, journalism among others.[2] 

In terms of public perception and profile, the appointment of Nandan Nilekani as the chairman of Unique Identification Authority of India (UIDAI) stands out. Nilekani, a prominent business leader (almost a house-hold name in the middle-class India), has been accorded the rank of a cabinet minister to lead the ambitious project of creating a unique identification number for India’s one-billion population. Undisputedly, this is one of the biggest social security projects undertaken by the government in recent history. The project is a complex one with many variables including technological, financial, logistical, legal and political issues. Given the enormity of this project, trusting a private sector professional with no background in government is a telling indication of the changing narrative in public policy-making process in India.

Critically, appointments from the non-governmental sector are forcing themselves into traditional strongholds of civil servants. For instance, Subir Gokarn was appointed as a Deputy Governor of the Reserve Bank of India in 2010, for which appointments are made mostly from a circle of bureaucrats and “government economists” marking a radical shift in the government’s approach. Subir Gokarn was earlier with Standard and Poor’s, a credit rating agency. Incidentally, another potential candidate who was interviewed for this position was Jahangir Aziz, J.P. Morgan’s chief economist in India.

Besides individual appointments, the growth of private sector since the reform process began in the 1990s and strengthening of industry associations have enhanced government’s reliance on external expertise. For instance, the Indian government’s decision-making process leading to the WTO agricultural trade negotiations in 2001 involved substantive discussions with the industry bodies and civil society groups to develop its comprehensive proposal to the WTO. This was in absolute contrast to the Uruguay Round negotiations, where the government did little to consult the private sector and civil society.[3] Recently, the Planning Commission constituted an expert group to examine the process and nature of government-industry consultations and recommend measures for improvements. The constitution of such a group reflects the government’s acknowledgement of the increasing relevance of industry bodies in public policy-making.

To me, the above anecdotal evidence points towards increasing use of external professionals and importantly an attitudinal change on the part of the government of allowing lateral entry into the government. This is a clear change in trend in the policy-making process of the government from the past. Given this change, I am more interested in raising an important question surrounding these events. What is driving this change? And, whether this trend will continue in the days to come? In the next post, I will place before you two primary reasons which I believe are leading this change and will also sustain the same.

In the interim, it will be great to hear your thoughts on – 1) whether you see this as a changing trend in public policy-making from the past, and 2) if so, what reasons do you think are bringing about this new trend.

[1] However, Jawaharlal Nehru, India’s first Prime Minister was famous for bringing on board several noted foreign economists and planners in the early days of the nation-building. Noted international economists included Gunnar Myrdal, Joan Robinson, Nicholas Kaldor, Thomas Balogh, Ian Little, Oscar Lange, and Paul Streeten. Peter Bauer, “B.R. Shenoy: Stature and Impact”, Cato Journal, 18 (1) 1 (1998) at 2.

[2]Youth Policy”, Indian Express, available at http://www.indianexpress.com/story-print/717163/ (last visited on 9 December 2010).

[3] Shishir Priyadarshi, “Decision-Making Processes in India: The Case of the Agriculture Negotiations”, Managing the Challenges of WTO Participation: Case Study 15, available at http://www.wto.org/english/res_e/booksp_e/casestudies_e/case15_e.htm (last visited on 9 December 2010).

4 Comments on "External Professionals in Public Policy-Making – I"

  1. Aditya Singh December 31, 2010 at 8:10 pm ·

    Great post, Varun. What’s your take on the issue of lateral entries into the civil services? Manmohan Singh (Finance Secretary, RBI Governor, UGC Chairperson); IG Patel, Montek Ahluwalia, C. Rangarajan are examples of extremely successful lateral entrants – but these appointments were due to strong political connections and at very high positions. Should there be a formal, institutionalized way of involving professionals in the Government?

  2. Varun Hallikeri December 31, 2010 at 10:15 pm ·

    Dear Aditya,

    I wrote this piece with Indian civil services in mind as most policy-making roles are filled by career-based bureaucrats. Of course, there are some exceptions but typically most of them are and/or could be filled by civil servants.

    Your point is right that many of the external appointments that I have laid out and you mentioned are at higher levels and seem to have political backing. However, I would not go as far as to say that they are only due to political connections. Also, in my various interactions, I have found that there are many appointments into government roles at lower levels and there is nothing political about them. As these appointments are not very high profile (in fact, they are very specialized roles in government agencies like SEBI, TRAI, RBI, etc.) we do not hear about them. The good news is that there is a lot happening already but it is not being tracked systematically and I don’t find much literature on this topic.

    You rightly raised the question of institutionalizing the process. This issue has been raised before the government and many advocates of civil service reforms are talking about this. In my next post, I will provide my reasons for why lateral entry into policy-making roles is taking place and is likely to continue. In the process, I will touch upon the issue of formalizing or institutionalizing this process. There are no ready answers to how this can be done. But, I guess we could learn from some foreign experiences. Of course, we are assuming that institutionalizing lateral entry is desirable. Who knows – it might not be such a good idea! Essentially, a deeper analysis is required.


  3. Suhas January 6, 2011 at 7:23 am ·

    Hi Varun,

    I am not sure if there has been a change from the past, or it has been in the realm of anecdotal throughout. What is interesting though, and which I think we should think about, is the extent to which governmental functions have recently been ‘outsourced’ to the private sector. This may be in the realm of policy making or in purely what was once considered the ‘administrative function’. In terms of sheer volume I would say this beats the role of individuals seconded / taken on short term contracts by the government.

    We must keep in mind that appointments of individuals with a non civil service background are ill-remunerated, and to my mind, the reserve of do-gooders and step-uppers, as the case may be.

    Looking forward to the second part.

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