- Email: [email protected]
A comment on ”The World Bank support for institutional and policy reform in the metropolitan areas: The case of Calcutta“
HABITATINTL.
Vol. 13, No. 3, pp. 19-22, 1989. Printed in Great Britain.
0197-3975189 $3.00 + 0.00
Pergamon Press plc
A Comment
on
“The World Bank Support for Institutional and Policy Reform in the Metropolitan Areas: The Case of Calcutta”*
Development
NIGEL HARRIS
Planning Unit, University College London, Gardens, London WClH OED, U.K.
9-l I
Endsleigh
It is a pleasure to be asked to comment on this paper, part of the World Bank’s continuing effort to evaluate its own experience. This is especially useful both because of the importance of the case (Calcutta is the most developed example of Bank financing in the urban sector) and because the Bank has established a remarkable intellectual hegemony in the field - its performance criteria have become the stock-in-trade of the aid business, its preoccupations those of most of the people concerned. I propose to make a brief elaboration, with three points of criticism. First, the elaboration. The context in which the Bank originally became involved in Calcutta is worth recalling, for it was politically a most fraught time. The crisis of Indian planning following the second Five Year Plan had a particularly severe effect on Calcutta. Producing a quarter of the heavy industrial output of India and most dependent upon the heavy industry public spending of the second Plan, the reorientation of public sector investment towards agriculture had an especially severe effect. Dr A.N. Bose, then Chief Economist to the Calcutta Metropolitan Planning Organisation (CMPO), estimated that, on the trend line of the 1950s the Calcutta district lost 100,000 engineering jobs in the 1960s. The effects of overexpansion during the second World War, a partition of India that made Calcutta a border backwater, and the silting of the port, the planning changes of the period of “Plan Holiday” and the fourth plan inflicted severe economic contraction upon the city. That is: the problems of Calcutta were neither simply related to population growth, nor to poor management. Furthermore, to these economic disasters were added a peculiarly intractable political crisis - a Communist Party of India (Marxist) state government, suspected of all manner of crimes by the national government and rejected by the rural guerillas of the Communist Party of India (Marxist-Leninist). In the late 196Os, there was for a period civil war - including street warfare in Calcutta - between the state government and the guerillas. The context was overwhelmed by the events in East Pakistan that ultimately produced the creation of Bangladesh, but in the interim led to many millions of refugees fleeing to Calcutta and an Indian military invasion of East Pakistan. These tumultuous events have also to be taken into account, for this is not simply a planning context. The underlying economic questions - if not the political ones - also needed an answer if the *This is based on discussion of a paper by Per Ljung and Jun Zhang at the XVII Triennale di Milan0 International Conference “Policy Strategies and Projects for Metropolitan Areas”, November 1988.
19
Second
20
Nigel Harris
city was to respond to the initiatives of the Bank (the CMPO’s Basic Development Plan recognised the economic problem by planning for the expansion of Calcutta’s engineering industry as a key factor in reviving the city). The Bank’s learning experience in Calcutta must thus have been considerable. To have negotiated the rapids of the city in the aftermath of crisis was no mean accomplishment: what were the political and economic preconditions for this? Per Ljung and Jun Zhang’s paper does not examine this question. On the other hand, the paper sketches the common shift in the approach of aid donors from using aid as a means to ease physical bottlenecks to a means to facilitate much wider changes in the social, political and administrative environment. Implicitly, the diagnosis of underdevelopment has shifted from a shortage of capital, from bottlenecks, particularly in infrastructural provision, to enhancing local capacity to overcome bottlenecks, from physical development to the competence of the workforce. Thus, to some extent the critique goes no further than to sketch this evolution, as if it might have been possible in 1973 to have current perceptions. The Calcutta Urban Development Projects of 1973 and 1977 pushed an unprecedented scale of resources into any one metropolitan area, and did so through an organisation which, if it had not existed, the Bank would have had to invent: the Calcutta Metropolitan Development Authority (CMDA). It was nonelected, politically fortified against the environment, well-funded and high profile, imposed upon a bewildering array of other public agencies and weak local authorities. In general, it did not draw upon the elaborate analyses of the CMPO, nor on the Basic Development Plan; it was an emergency operation, a blitzkrieg upon priority targets. It did not create any capacity to replicate, to operate on a self-financed basis nor even to maintain the capacity created. The style of operation thus became self-perpetuating, for, to ensure the new capacity did not deteriorate, the CMDA was obliged itself to go beyond development to routine operation and maintenance. It was no wonder that some of the Bank’s critics in Calcutta felt it had created a monster. The claimed achievements were substantial, but what was the opportunity cost? Could the number of beneficiaries have been increased with a different approach that had concentrated on the institutional management of the city and the relationship of institutions to the mass of the citizens? Bypassing local institutions did not leave them intact, for they were all upstaged. And talented staff would flock to the CMDA as the place where something real could be done. It would be quite unjust to use the phrase from the Mezzogiorno development, “cathedral in the desert”, to refer to the CMDA, but there were elements of this - it was a kind of enclave, as modern manufacturing was supposed to be an but an enclave within an institutional enclave in developing countries, framework, which imposed blight on those surrounding it. The fact that the CMDA had a remarkable succession of very competent, energetic and dedicated chiefs should not detract from the fact that most of Ljung and Zhang’s criticisms of the CMDA flow from the method by which it was used as the instrument of Bank policy. The third loan seeks to remedy this acknowledged error and thereby increase the number of beneficiaries. But the rectification is in terms of internal organisation, greater accountability and improved financial management, not greater electoral accountability or taming within the Calcutta context. There are thus grounds for expressing scepticism about the likely success of this operation, for the reforms still retain the basic format that has hitherto caused the problems: the CMDA as super commission. The reform of local government is not only a repeated aim in India, it raises much bigger issues than can be remedied in Calcutta - concerning the position and power of Delhi relative to the states, and the state relative to local
A Comment on: Ljung and Zhang “The World Bank Support
”
21
government. Aid donors in general would hesitate to become involved in such large issues with the danger of becoming exposed to the charge of political interference in domestic affairs or being absorbed in the existing structure. The Bank has always sought to avoid these dangers by turning political into technical questions, but even then, the more Bank staff are involved, the more they can come to be seen as quasi-colonial forces, manipulating Indians to predetermined aims which represent foreign interests. On the other hand, the greater the degree of detachment, the greater the fear of failures. Many aid donors recognise similar problems in their own past record, and are now endeavouring to overcome them by employing non-governmental organisations (NGOs) as their instruments. But do these avoid the problems? Operating through unofficial agencies can expose the donor to even greater political criticism of interference. There is no guarantee of NGO efficiency, nor are they necessarily subject to supervision by an electorate or service recipients. And, as with the CMDA, large aid funds can render them increasingly unaccountable to all except the donor - the foreign “fairy grandmother” blights all with her gifts. A different approach shifts the emphasis from capital aid - the concern of a bank - to technical assistance. It might also shift delivery from an externally engineered project to ones which, in technical design, scale, timing, maintenance, are closer to being operated and funded by the recipients. Of course, it is romantic to think all projects are of this kind - locally managed electricity supply systems requiring centrally managed power stations. Nonetheless, the donors’ attempt to balance efficiency (as defined in what are seen as optimally designed projects) and effectiveness has too often been tilted in favour of the first. Furthermore, technical assistance is difficult and labour-intensive to set up, administer, evaluate; it is slow, and produces results that are not politically impressive. In addition it takes the donor into the heart of the political process and obliges him or her to assume some level of responsibility for what happens, whether it be improved welfare or maize riots. Despite the efforts of the CMDA and the Bank, Calcutta continues to be depressed. One of the most telling indications of this was the 1981 Census result which recorded that the rate of natural increase of the city’s population was larger than the growth of the total population - that is, there was net outmigration. If household incomes stagnate, then the capacity both to maintain the development introduced by the CMDA (particularly, for example, in housing) and to finance effective service provision is fatally weakened; the rate of growth of substandard bustees can easily exceed that of improved bustees. Would World Bank aid have been more effective if it had been targeted on the basic economy ? for example, the retooling and upgrading of the heavy engineering industry (with the search for markets abroad to compensate for those lost at home), or enhancing the productivity of jute manufacture? The Bank’s urban officers displayed only occasional interest in the underlying economy although some did note how little was known either about the economy or about the wider implications of Bank-supported investments (see E.B. Wade, An Approach to Urban Lending in India, South Asia Department (mimeo), World Bank, July 1978). One CMDA chief at an international meeting complained at how little was known about the marketing networks of the eastern Indian region so that the effects of urban investment programmes could be anticipated; and even, project design varied to achieve other effects. But the research required to achieve usable results is considerable, and aid donors are usually too preoccupied with immediate issues to interest themselves. Yet now that India is also undergoing some structural reform and being oriented upon greater export efforts, this could produce a changed pattern of territorial distribution within which research on the ramifications of the spatial economy would be of great importance for policy.
22
Nigel Harris
The Bank’s involvement in Calcutta - sixteen years - deserves a major evaluation which will not simply assess the immediate out-turn, but the broader implications for the economy, politics and society of the city and its region. It is the starting point for rethinking the role of Bank aid in the urban areas in order to define the new phase of learning by doing. It would also require a much closer examination of what people in Calcutta thought so that the issues of involvement and popular mobilisation are not left out of the evaluation. It is here that accountability and sensitivity to real demand ought to start.
Vol. 13, No. 3, pp. 19-22, 1989. Printed in Great Britain.
0197-3975189 $3.00 + 0.00
Pergamon Press plc
A Comment
on
“The World Bank Support for Institutional and Policy Reform in the Metropolitan Areas: The Case of Calcutta”*
Development
NIGEL HARRIS
Planning Unit, University College London, Gardens, London WClH OED, U.K.
9-l I
Endsleigh
It is a pleasure to be asked to comment on this paper, part of the World Bank’s continuing effort to evaluate its own experience. This is especially useful both because of the importance of the case (Calcutta is the most developed example of Bank financing in the urban sector) and because the Bank has established a remarkable intellectual hegemony in the field - its performance criteria have become the stock-in-trade of the aid business, its preoccupations those of most of the people concerned. I propose to make a brief elaboration, with three points of criticism. First, the elaboration. The context in which the Bank originally became involved in Calcutta is worth recalling, for it was politically a most fraught time. The crisis of Indian planning following the second Five Year Plan had a particularly severe effect on Calcutta. Producing a quarter of the heavy industrial output of India and most dependent upon the heavy industry public spending of the second Plan, the reorientation of public sector investment towards agriculture had an especially severe effect. Dr A.N. Bose, then Chief Economist to the Calcutta Metropolitan Planning Organisation (CMPO), estimated that, on the trend line of the 1950s the Calcutta district lost 100,000 engineering jobs in the 1960s. The effects of overexpansion during the second World War, a partition of India that made Calcutta a border backwater, and the silting of the port, the planning changes of the period of “Plan Holiday” and the fourth plan inflicted severe economic contraction upon the city. That is: the problems of Calcutta were neither simply related to population growth, nor to poor management. Furthermore, to these economic disasters were added a peculiarly intractable political crisis - a Communist Party of India (Marxist) state government, suspected of all manner of crimes by the national government and rejected by the rural guerillas of the Communist Party of India (Marxist-Leninist). In the late 196Os, there was for a period civil war - including street warfare in Calcutta - between the state government and the guerillas. The context was overwhelmed by the events in East Pakistan that ultimately produced the creation of Bangladesh, but in the interim led to many millions of refugees fleeing to Calcutta and an Indian military invasion of East Pakistan. These tumultuous events have also to be taken into account, for this is not simply a planning context. The underlying economic questions - if not the political ones - also needed an answer if the *This is based on discussion of a paper by Per Ljung and Jun Zhang at the XVII Triennale di Milan0 International Conference “Policy Strategies and Projects for Metropolitan Areas”, November 1988.
19
Second
20
Nigel Harris
city was to respond to the initiatives of the Bank (the CMPO’s Basic Development Plan recognised the economic problem by planning for the expansion of Calcutta’s engineering industry as a key factor in reviving the city). The Bank’s learning experience in Calcutta must thus have been considerable. To have negotiated the rapids of the city in the aftermath of crisis was no mean accomplishment: what were the political and economic preconditions for this? Per Ljung and Jun Zhang’s paper does not examine this question. On the other hand, the paper sketches the common shift in the approach of aid donors from using aid as a means to ease physical bottlenecks to a means to facilitate much wider changes in the social, political and administrative environment. Implicitly, the diagnosis of underdevelopment has shifted from a shortage of capital, from bottlenecks, particularly in infrastructural provision, to enhancing local capacity to overcome bottlenecks, from physical development to the competence of the workforce. Thus, to some extent the critique goes no further than to sketch this evolution, as if it might have been possible in 1973 to have current perceptions. The Calcutta Urban Development Projects of 1973 and 1977 pushed an unprecedented scale of resources into any one metropolitan area, and did so through an organisation which, if it had not existed, the Bank would have had to invent: the Calcutta Metropolitan Development Authority (CMDA). It was nonelected, politically fortified against the environment, well-funded and high profile, imposed upon a bewildering array of other public agencies and weak local authorities. In general, it did not draw upon the elaborate analyses of the CMPO, nor on the Basic Development Plan; it was an emergency operation, a blitzkrieg upon priority targets. It did not create any capacity to replicate, to operate on a self-financed basis nor even to maintain the capacity created. The style of operation thus became self-perpetuating, for, to ensure the new capacity did not deteriorate, the CMDA was obliged itself to go beyond development to routine operation and maintenance. It was no wonder that some of the Bank’s critics in Calcutta felt it had created a monster. The claimed achievements were substantial, but what was the opportunity cost? Could the number of beneficiaries have been increased with a different approach that had concentrated on the institutional management of the city and the relationship of institutions to the mass of the citizens? Bypassing local institutions did not leave them intact, for they were all upstaged. And talented staff would flock to the CMDA as the place where something real could be done. It would be quite unjust to use the phrase from the Mezzogiorno development, “cathedral in the desert”, to refer to the CMDA, but there were elements of this - it was a kind of enclave, as modern manufacturing was supposed to be an but an enclave within an institutional enclave in developing countries, framework, which imposed blight on those surrounding it. The fact that the CMDA had a remarkable succession of very competent, energetic and dedicated chiefs should not detract from the fact that most of Ljung and Zhang’s criticisms of the CMDA flow from the method by which it was used as the instrument of Bank policy. The third loan seeks to remedy this acknowledged error and thereby increase the number of beneficiaries. But the rectification is in terms of internal organisation, greater accountability and improved financial management, not greater electoral accountability or taming within the Calcutta context. There are thus grounds for expressing scepticism about the likely success of this operation, for the reforms still retain the basic format that has hitherto caused the problems: the CMDA as super commission. The reform of local government is not only a repeated aim in India, it raises much bigger issues than can be remedied in Calcutta - concerning the position and power of Delhi relative to the states, and the state relative to local
A Comment on: Ljung and Zhang “The World Bank Support
”
21
government. Aid donors in general would hesitate to become involved in such large issues with the danger of becoming exposed to the charge of political interference in domestic affairs or being absorbed in the existing structure. The Bank has always sought to avoid these dangers by turning political into technical questions, but even then, the more Bank staff are involved, the more they can come to be seen as quasi-colonial forces, manipulating Indians to predetermined aims which represent foreign interests. On the other hand, the greater the degree of detachment, the greater the fear of failures. Many aid donors recognise similar problems in their own past record, and are now endeavouring to overcome them by employing non-governmental organisations (NGOs) as their instruments. But do these avoid the problems? Operating through unofficial agencies can expose the donor to even greater political criticism of interference. There is no guarantee of NGO efficiency, nor are they necessarily subject to supervision by an electorate or service recipients. And, as with the CMDA, large aid funds can render them increasingly unaccountable to all except the donor - the foreign “fairy grandmother” blights all with her gifts. A different approach shifts the emphasis from capital aid - the concern of a bank - to technical assistance. It might also shift delivery from an externally engineered project to ones which, in technical design, scale, timing, maintenance, are closer to being operated and funded by the recipients. Of course, it is romantic to think all projects are of this kind - locally managed electricity supply systems requiring centrally managed power stations. Nonetheless, the donors’ attempt to balance efficiency (as defined in what are seen as optimally designed projects) and effectiveness has too often been tilted in favour of the first. Furthermore, technical assistance is difficult and labour-intensive to set up, administer, evaluate; it is slow, and produces results that are not politically impressive. In addition it takes the donor into the heart of the political process and obliges him or her to assume some level of responsibility for what happens, whether it be improved welfare or maize riots. Despite the efforts of the CMDA and the Bank, Calcutta continues to be depressed. One of the most telling indications of this was the 1981 Census result which recorded that the rate of natural increase of the city’s population was larger than the growth of the total population - that is, there was net outmigration. If household incomes stagnate, then the capacity both to maintain the development introduced by the CMDA (particularly, for example, in housing) and to finance effective service provision is fatally weakened; the rate of growth of substandard bustees can easily exceed that of improved bustees. Would World Bank aid have been more effective if it had been targeted on the basic economy ? for example, the retooling and upgrading of the heavy engineering industry (with the search for markets abroad to compensate for those lost at home), or enhancing the productivity of jute manufacture? The Bank’s urban officers displayed only occasional interest in the underlying economy although some did note how little was known either about the economy or about the wider implications of Bank-supported investments (see E.B. Wade, An Approach to Urban Lending in India, South Asia Department (mimeo), World Bank, July 1978). One CMDA chief at an international meeting complained at how little was known about the marketing networks of the eastern Indian region so that the effects of urban investment programmes could be anticipated; and even, project design varied to achieve other effects. But the research required to achieve usable results is considerable, and aid donors are usually too preoccupied with immediate issues to interest themselves. Yet now that India is also undergoing some structural reform and being oriented upon greater export efforts, this could produce a changed pattern of territorial distribution within which research on the ramifications of the spatial economy would be of great importance for policy.
22
Nigel Harris
The Bank’s involvement in Calcutta - sixteen years - deserves a major evaluation which will not simply assess the immediate out-turn, but the broader implications for the economy, politics and society of the city and its region. It is the starting point for rethinking the role of Bank aid in the urban areas in order to define the new phase of learning by doing. It would also require a much closer examination of what people in Calcutta thought so that the issues of involvement and popular mobilisation are not left out of the evaluation. It is here that accountability and sensitivity to real demand ought to start.