There are no short cuts to building State capacity

Fixing India’s broken welfare system is about investing in the people that make the State. As the Aadhaar debate rages on, this must not be forgotten.

The Aadhaar judgment and ensuing debate offer an important moment to revisit the current framework and associated solutions to the core challenge that Aadhaar sought to address: fixing India’s broken welfare architecture and building a strong, capable State system. At the heart of the debate is the question of the relationship between technology and State capacity and the degree to which technology is a tool or a solution to capacity failures.

Aadhaar is designed to address the problem of false identity or ghost beneficiaries. But, as activists and researchers have repeatedly pointed out, ghost beneficiaries are not the only form of corruption(Pradeep Gaur/Mint)

Drawing on an extensive review of the existing evidence, in a forthcoming article, Lant Pritchett, Shrayana Bhattacharya and I argue that much of the debate and experimentation with technology is based on the flawed assumption that technology can allow us to bypass State failures. The majority Aadhaar judgment, in my view, upholds this assumption. However, experience with using technology, Aadhaar included, point to the fact that the very State failure that technology seeks to fix particularly — the people and organisation structures that make the State — are in fact critical to the success (and failure) of technology solutions.

This is best understood by examining the link between corruption in welfare programmes and identification — the primary rationale offered and endorsed by the Supreme Court for linking Aadhaar to government subsidies. As a technology, Aadhaar is designed to address the problem of false identity or ghost beneficiaries. But, as activists and researchers have repeatedly pointed out, ghost beneficiaries are not the only form of corruption. In Jharkhand, for instance, Karthik Muralidharan’s work on PDS highlights that quantity fraud, where legitimate beneficiaries were given only a fraction of their entitlement, rather than identity fraud was the key driver of corruption. In Rajasthan, an Id-insights study finds that non-availability of ration was a key reason beneficiaries did not receive PDS.

In both cases, it is likely that leakage will be reduced far more effectively by focusing on the pipeline problem of movement of grains to PDS stores rather than last mile benefiacry “authentication”. The point is that Aadhaar and associated technologies are only as effective as the problem they are trying to solve. Understanding the nature of corruption is thus critical. Muralidharan argues that this can be best achieved by placing beneficiary experience at the centre of solution identification. But to do this, the State must be nimble, and capable of building feedback loops with citizens, with empowered frontline officers capable of adapting solutions. This is the antithesis of the current hierarchical culture accustomed to implementing one-size fits all solutions prevalent in the Indian State.

The focus on corruption obfuscates another challenge with identification — that of eligibility determination. Aadhaar can weed out ghosts and duplicates but it doesn’t help deal with the difficulties the State faces in identifying those who are eligible for benefits. The bottleneck here, as Pritchett, Bhattacharya and I argue, is not the predatory State that encourages ghosts. Rather, it is a State that is too small and too incompetent to deal with complex tasks. This was brought home to me by Centre for Policy Research’s Accountability Initiative, which studied the efficacy of using the socio-economic caste census (SECC) for housing subsidies. To ensure genuine beneficiaries received the subsidy, the panchayats were tasked with updating SECC lists. This required multiple transaction intensive tasks, including redoing parts of the survey, and dispute resolution as citizen claims differed from official records. All this was being handled by a few harried elected panchayat representatives and the sole secretary assigned. Lack of staff was one problem but an even bigger one was lack of skills. To update lists appropriately, panchayats needed a new set of skills, from data-entry skills, to people management skills to handle disputes. Without these skills and against tight deadlines, the updation process suffered and chances of genuine beneficiaries being left out were high.

From a citizens’ point of view, there are thus two challenges to identification. The first is that of asserting eligibility or declaring yourself a beneficiary; and the second is authentication. Aadhaar may help with the latter but it cannot solve the former problem. This is where discretion creeps in and politicians, as studies on targeted subsidies like pensions highlight, become critical. Getting eligibility right requires building local government capacities by employing and training cadres of workers to create beneficiary registers. Technology can help but it cannot be a substitute for people.

Rather than strengthen the State, Aadhaar and associated technologies amplify the need to invest in building State capacity, particularly at the frontlines. For the moment, however, the debate remains caught between techno-optimists who see technology as a magic bullet and the sceptics who recognise the complexities but haven’t adequately engaged with the nuts and bolts of administrative reforms needed to strengthen State capacity. Fixing India’s broken welfare system is about investing in the people who make the State. As the Aadhaar debate rages on, this must not be forgotten.

Yamini Aiyar is president and chief executive, Centre for Policy Research

The views expressed are personal