State Incapacity by Design: Understanding the Bihar Story

Abstract

The Indian state of Bihar has long been a byword for bad governance. It was however governed particularly badly between 1990 and 2005, and has since experienced something of a ‘governance miracle’. How can we account for the 1990–2005 deterioration? The answer lies in the interaction of three factors. The first was the type of leadership exercised by Lalu Prasad Yadav, who was Chief Minister throughout most of this period – even when his wife formally occupied the post. The second lies in electoral politics: the need to maintain the enthusiasm and morale of an electoral coalition that Yadav had constructed from a number of poorer and historically oppressed groups. Such was the scale of poverty among this core electoral coalition that Yadav had limited prospects of maintaining its cohesion and allegiance through the normal processes of promising ‘development’ and using networks of political patronage to distribute material resources to supporters. More important, that strategy would have involved a high level of dependence on the government apparatus, that was dominated by people from a number of historically-dominant upper castes. That is our third factor. Yadav preferred to mobilise his supporters on the basis of continual confrontation with this historically oppressive elite. He kept public sector jobs vacant rather than appoint qualified people – who were mainly from the upper cases. He tried to micro-manage the state apparatus from the Chief Minister's office. He denuded the public service of staff. He was then unable to use it to deliver ‘development’. We show that, among other things, the Bihar state government sacrificed large potential fiscal transfers from the Government of India designed for anti-poverty programmes because it was unable to complete the relevant bureaucratic procedures. Yadav knowingly undermined the capacity of the state apparatus. There are parallels in many other parts of the world. Low state capacity is often a political choice.