Can Good Economics Ever Be Good Politics? Case Study of India's Power Sector (World Bank Working Papers)

In recent years, the power sector in several developing countries has suffered from a frustrating gap between strong, pro-reform rhetoric at the political level, and weak, hesitant implementation of the reform measures on the ground. Focusing on the recent experience of power sector reform in India, this paper looks afresh at the problem of the 'rhetoric-implementation gap' by taking the lack of political will as its starting point, and identifying the ingredients that comprise it in the current context of India. Assuming that people and institutions are not impartial but instead respond to political and economic incentives, it explains how the lack of political will often reflects rational political behaviour. Using this more realistic framework, it examines the incentives, informal relationships, and interests that govern the behaviour of people and institutions, and searches for the openings and opportunities that reformers must pursue. In Recent Years, The Power Sector In Several Developing Countries Has Suffered From A Frustrating Gap Between Strong, Pro-reform Rhetoric At The Political Level, And Weak, Hesitant Implementation Of The Reform Measures On The Ground. Focusing On The Recent Experience Of Power Sector Reform In India, This Paper Looks Afresh At The Problem Of The ¿rhetoric-implementation Gap¿ By Taking The Lack Of Political Will As Its Starting Point, And Identifying The Ingredients That Comprise It In The Current Context Of India. Assuming That People And Institutions Are Not Impartial But Instead Respond To Political And Economic Incentives, It Explains How The Lack Of Political Will Often Reflects Rational Political Behavior. Using This More Realistic Framework, It Examines The Incentives, Informal Relationships, And Interests That Govern The Behavior Of People And Institutions, And Searches For The Openings And Opportunities That Reformers Must Pursue. Power Reform In India: Issues, Perceptions, And Players -- Politics In India: Form And Substance -- The Politics Of Reform: Style And Strategy -- Prospects For The Power Sector -- Conclusions And Lessons Going Forward. Sumir Lal. Includes Bibliographical References. Contents......Page 4 Foreword......Page 6 Introduction......Page 8 Power Reform in India: Issues, Perceptions, and Players......Page 9 Politics in India: Form and Substance......Page 21 The Politics of Reform: Style and Strategy......Page 24 Prospects for the Power Sector......Page 29 Conclusions and Lessons Going Forward......Page 31 References......Page 32 Reform programs all over the world often falter for reasons that mystify those devising and supporting the reform, because governing politicians stall in implementing the measures fully, though they may have publicly agreed with their formulation-and despite the reform being technically and economically sound, with many intended beneficiaries.