Why Mom and Papa are almost universal?

The order in which babies learn to make sounds explains why the next closest usual caretaker to mom is so often called papa or baba. The story of strange linguistic coincidence is here.

India needs a new constitution!?

Nobel prize winning institutional economist Douglass North observed that “economic history is overwhelmingly a story of economies that failed to produce a set of economic rules of the game (with enforcement) that induce sustained economic growth.” For more than a century, India was under comprehensive exploitative and extractive colonial British rule. It was not primarily directed towards development of india, but rather towards extraction. The legacies continued as argued in a recent write-up by Atanu Dey and Rajesh Jain and reflected in the making of constitution of India.

They argued that the comprehensive government control of the economy through administration and control was left intact when the British decided to leave India, and was taken over by the government of Independent India.

"Although India attained political independence from the British raj, Indians did not become free of a controlling—and extractive—government." 

They concluded that India’s problem is structural and systemic, and not idiosyncratic. If the constitution were to change, the ultimate rules of the game would change, the policies (the derived rules) will change, and thus the action on the ground (the play of the game) will change, and therefore the outcome will change. 

"India needs a new constitution that is consistent with a nation of free individuals living in a complex, modern, large economy. This modern constitution has to be one that guarantees economic freedom to the individual, prohibits the government from making any laws that discriminate among citizens, guarantees freedom of speech and the press, prohibits the government from entering into businesses that are properly the domain of the private sector, and so on. In other words, India needs a constitution that protects the comprehensive freedom of the individual: economic, social and political."

However, in the last two decades, economically, India has broken out of the paradigm of low growth. And, the new growth is producing far-reaching changes in income, occupational structures, lifestyles and aspirations. Politically, India’s democracy has deepened, giving hitherto marginalised groups impressive representation and recognition. Administratively, the state has acquired unprecedented resources to spend on programs ostensibly designed for inclusion. And there is a palpable change in social consciousness: political democracy has induced a sense of agency and empowerment across different groups in society; today inclusion is a demand of citizens, not a gift given from on high. Certainly, the pace is slow, but steady, being big and nimble enough. So talking about the new rules of the game in the pluralist India is too much to ask!

Innovate in Rural India

Innovation had been there in rural India since ages. In North India, it is called Jugaad. Joseph Schumpeter contributed greatly to the study of innovation, famously asserted “creative destruction is the essential fact about capitalism”, had argued that industries must continuously look to innovate with better or more effective processes and products through economic and marketing strategies, such as the connection from the craft shop to factory. The emergence of start-ups in the last two decades or so can be termed as innovation. Writing for Business Standard, recently, Rapidi2i CEO, Srikanth Srinivas & Harvard Business School Professor, Vijay Govindarajan argued that how the start-ups, especially in the rural India can solve local problems through different innovation possibilities.

They identified the three key factors that have created the right conditions for a start-up boom in India:

1. The existence of huge, latent demand; an intensive need for disruptive, low cost solutions that can reach the masses, in order to meet challenges on many fronts - education, health care, water, and agriculture to name just a few. Start-ups are designed to create disruptive solutions.
2. The success story of start-ups like Flipkart, created a positive spillovers, and there is a large supply of eager entrepreneurs that want to make an impact and make it big. The millennials are not driven by getting a 'steady job'. They are more independent and willing to take risks.
3. The barriers to entry have never been lower with respect to infrastructure (easy to get in, elastic, cloud-based infrastructure such as Amazon Web Services), and global reach (ability to leverage Google, Apple and the marketplace that has democratised access). Large scale cell phone penetration can be tapped to provide innovative solutions to the masses.

..What is needed now is to shift focus to solving the problems faced by Indians. For instance, most Indians lack adequate health care. If start-ups can use digital technologies to provide affordable good quality medical diagnosis, those solutions will have applicability not just in India but all over the world, including in rich countries like the US. This is the reverse innovation opportunity that Indian startups should target. By shifting the focus and solving local problems while at the same time keeping in mind reverse innovation possibilities, start-ups can serve as the catalyst to channel the energy in areas that will help take India global.

For example, Amazon introduced Easy Ship in India because sellers in India lacked the logistics capabilities. Amazon takes care of picking up from the seller's location. At the same time, customers get trackable shipments. Now, this is a service that is available in other countries.

They cited the potential...low hanging fruits in the areas of healthcare and education. If start-ups can create disruptive solutions here, there is a latent market of 3 billion people that can be served with these same solutions. In addition, many so-called advanced countries, are struggling to cope with out of control healthcare costs and an expensive education system that is out of reach for many, and are looking for solutions that will bend the cost performance curve in a disruptive way. On the other hand, start-ups by their very nature are very risky. Amidst all this euphoria, this message of risk may get lost. It is therefore, important to build a strong and robust ecosystem.

Some potentialities of The 'village' start-ups include:

• Mentoring organisations: For example, Lemon Ideas, based in Nagpur, is a start-up mentorship organisation dedicated towards fostering the start-up ecosystem in India that has a formal programme and a partnership with several funding organisations.
• Venture capital: TLabs is a start-up accelerator as well as an early-stage seed-fund focused on Indian internet and mobile technology start-ups.
• Early adopters: Consumers and enterprises that are willing to give these start-ups a chance; those that see the early benefit of the disruptive cost-performance curve (knowing that there may still be deficiencies that need to be ironed out along the way)
• Academic and research institutions: CIIE, for example, is an IIM Ahmedabad initiative to promote entrepreneurship and bridge gaps in the ecosystem.
• Government: Kerala Startup Village is a good example of a public-private partnership that aims to launch 1,000 technology startups over the next 10 years and start the search for the next billion-dollar Indian company.

Statistically significant variables are not necessarily predictive!?

Why aren't significant variables leading to good prediction of outcomes? This conundrum affects both simple and complex data in a broad range of science and social science fields.....Statistical significance is a traditional, long-standing measure in any researcher's toolbox but thus far, scientists have been puzzled by the inability to use results of statistically significant variants in complex diseases to make predictions useful for personalized medicine. Here is the link.

Game Theory Professor files lawsuit against citibank!

The news is interesting as the suit is filed by brilliant game theory Professor Eric Rasmusen. He wrote a textbook on Game theory while pursuing his doctoral degree!

World Statistics Day

The world statistics day is celebrated on 20 Oct. This is only the second World Statistics Day, celebrated every Oct 20 occuring in a year divisible by five...Here is the link of NYT.

Arhar Daal (Tur Pulse) hits double Century!

Arhar Daal ka Dohra Shatak...the news item in Hindi newspaper Dainik Jagran had given some food for thought to deep-dive the problem. It's basic economics of supply and demand, stupid! The cost-push supply and demand pull is the reason for pushing up the price of this pulse in India! 

The cost-push supply side first. 

a. The area sown of slow growth crops, pulses, had not increased over the period, rather gone down: it is fluctuating between 3.3-4 million hectares since last 10 years. 

b. The yield of Arhar (tur) is also very low with 6-7 quintals per hectare, also being long-cycle crop, once sown, locking in the farmer for the entire season. But, it also leaves the crop vulnerable to late-season deficiency in rainfall. The crop withers, expectations of output are scaled down and, consequently, those about prices are ratcheted up. In both 2009 and 2015, adverse short-term impacts from the monsoon pattern reinforced the long-term structural stagnation in the crop to cause a sharp drop in output (or expected output). The total factor productivity (TFP) growth, measure the growth of production not attributable to growth of inputs, of Arhar also shows the lack of technical progress and efficiency improvements in the production hampering the overall yield.

c. Further, unlike other pulses, Arhar has lower shelf life and low production world-wide, which also hampers the supply side factor in short term.

Now the Demand pull factor.

a. Among all kind of pulses, Arhar, considers as 'superior good', behaves in a typical Engels' Law, with an  increase in incomes, the demand for such goods increase more than proportionately. The Indian dietary patterns are moving from cereal-dominated diets to increasing shares of proteins and vegetables. In fact, this is also an indicator of Indian economic development story.

Obviously, from the policy perspective, it is not easy to execute. The right kind of incentives mechanism can be designed in keeping with the above simple factors in mind.

Nobel Laureate Angus Deaton vs Banerjee on Development Debate

Angus Deaton of Princeton University wins the Nobel prize. He works closely with numbers, and his preferred topics are consumption, poverty, and welfare.  His understanding encompasses about empirics, the importance of economic development, and indirectly a prize about economic history. His recent book The Great Escape, which focuses on how modernity revolutionized standards for consumption. I will share more links on his contribution to development economics, in particular understanding the poverty debate in India later on. Instead, I would like to share the debate, which happened more than two years ago DEATON V BANERJEE. It is worth watching and listening to both on the identifying pathways to development.Banerjee and Duflo are strong advocate of RCT (Randomised Control Test) 

Livelihood Resilience in Bihar Districts

This is almost like a long hiatus after I am restarting to write and share some useful write-ups, etc. Hopefully, this would be regular...Recently, we did some quick check on the understanding of livelihood resilience at the district level in Bihar..

Livelihood resilience is visualized as ideal, wherein variability of bio-physical, economic and social systems operates within respective threshold limits and adaptive capabilities (Swaminathan, 1991). The Livelihood Resilience Index (LRI) developed here, includes three major components: Bio-physical resources, Economic resources, and Social resources. The resilience of bio-physical systems is influenced by factors like biodiversity, redundancies, response diversity, spatiality, and governance and management plans. The Bio-physical resilience index (BRI), is largely constructed from stock and flow resource indicators to capture the dynamics of climate change and impacts on bio-physical (re)production cycle by judiciously selecting static and dynamic indicators.

Social resilience can be increased through improvements in communications, risk awareness, and preparedness. Social resilience index (SRI) can be constructed from personal and social well-being indicators, like health, nutrition, education, employment, income-consumption, housing, and energy. Further, there is a need to examine whether the resources in a given context are over-exploited to meet the local and or global economic demand crossing the threshold limits of the resilience.

The Economic Resilience Index (ERI) is constructed from production, productivity and resource allocation indicators, for example, shifting attention to ‘more crop per drop’ and total factor productivity growth. The indicators were carefully chosen at the district level to capture the essence of the livelihood resilience as well as the practicality of available data. The standardized index, adapted from that used in the Human Development Index, computed and rescaled into a single scalar – a composite index, the LRI is scaled from 0 (least resilient) to 1 (most resilient).

Here is the link ET BLOGS