The Need for Civil Services Reforms

India’s economy has grown rapidly in recent years, but the country’s bureau- cratic quality is widely perceived to be either stagnant or in decline. While small, India’s elite civil service cadre, the Indian Administrative Service (IAS), occupies the nerve center of the Indian state. Unfortunately, the IAS is ham- strung by political interference, outdated personnel procedures, and a mixed record on policy implementation, and it is in need of urgent reform. The Indian government should reshape recruitment and promotion processes, improve performance-based assessment of individual officers, and adopt safeguards that promote accountability while protecting bureaucrats from political meddling.

Key Insights into the IAS

For officers early in their careers, exam scores and education are highly predictive of future success

Older officers who enter the service as part of larger cadres face limited career prospects and are less effective at improving economic outcomes.

While initial characteristics heavily shape career trajectories, in the long term, there are clear rewards for officers who systematically invest in train- ing or acquire specialized skills.

Individual bureaucrats can have strong, direct, and measurable impacts on tangible health, education, and poverty outcomes.

Surprisingly, officers with strong local ties—thought to be vulnerable to corruption—are oThen linked to improved public service delivery.

Political interference generates substantial inefficiency: the best officers do not always occupy important positions, while political loyalty offers bureaucrats an alternative path to career success.

Counterintuitively, greater political competition does not necessarily lead to better bureaucratic performance.

A Reform Agenda for the Civil Service

The central and state governments should pass and implement pending leg- islation that protects bureaucrats against politically motivated transfers and postings. Despite judicial prodding, most states have stalled on such moves.

The IAS should use data on civil servants’ abilities, education, and training when placing officers early in their careers. As officers gain experience, per- formance metrics can inform key decisions about promotion and allocation.

The government should consider the proposal that officers deemed unfit for further service at certain career benchmarks be compulsorily retired through a transparent and uniform system of performance review. While the present government has moved in this direction, this procedure should be institutionalized.

State and central governments should discuss whether state cadres should be given greater latitude to experiment with increasing the proportion of local IAS officers and track their relative performance.

Further research is needed to better understand the impact of local offi- cers on development outcomes, to develop data on bureaucratic efficiency among officers in senior posts, and to systematically examine the workings of state-level bureaucracies.

Introduction

In the annals of global democracy, India holds an unusual status. Almost seventy years ago, at the time of winning its independence from the British Empire, the country instituted a system of universal franchise at an extremely low level of per capita income and when the vast majority of its population lacked even basic literacy. Over these seven decades, India has surprised many pessimists by sustaining democratic governance despite remaining a very poor country.

The considerable economic progress India has achieved is undeniable, par- ticularly in the last few decades. Between 1990 and 2014, India averaged an annual rate of per capita economic growth of nearly 6.5 percent, reducing the share of its population living in extreme poverty from 50.3 percent as of 1987 to 21.3 percent by 2011 in the process. 1

In today’s global economy, marked by slumping growth rates and extreme volatility, India stands out as a relative bright spot. In the coming years, according to forecasts by the International Monetary Fund, India is expected to remain the fastest-growing major economy in the world, having finally dis- placed China as the occupant of this coveted designation. 2

Yet while India’s short-term prognosis is quite favorable, there is nothing preordained about its future economic trajectory. Globally, there is a robust, positive relationship between the quality of government and economic prog- ress. But India has experienced rapid growth in spite of below-par governance. Indeed, the quality of India’s public-sector institutions in particular has strug- gled to keep pace with the country’s rapid economic advancement. As the adage goes, “India grows at night while the government sleeps. 3

Unless India is able to reform its administrative apparatus, sustained economic gains will prove elusive. Those who have come into contact with the country’s bureaucracy have long criticized it for being cumbersome, slow, inefficient, and oThen venal. Indeed, its infirmities are so widely known that the Indian bureaucracy is the sub- ject of unstinting pop culture mockery. From Ji Mantriji, an adaption of the BBC series Yes Minister that made light of political will meeting administrative intransigence, to Office Office, a long-running sitcom about a hapless common man stymied by a corrupt, labyrinthine state, the Indian administrative appa- ratus has not fared well in terms of popular perception. Today, in 2016, there is a lingering view that corruption and politiciza- tion of the civil services have become more, not less, entrenched. According to a measure of government effectiveness developed by the World Bank that captures the quality of a country’s civil service, its independence from political pressure, and the quality of policy formulation and implementation, India’s performance is middling. Data from 2014 place India in the forty-fifth percen- tile globally, nearly a 10 percentage point decline from the country’s position in 1996, when these data were first collected. 4

The Indian Administrative Service (IAS) is situated at the nerve center of this bureaucratic state. It has played a crucial and storied role in managing natural disasters, preserving law and order during episodes of political instability, and conducting free and fair elections. 5

Unfortunately, the IAS faces a number of serious challenges—from diminishing human capital to political interference—that, if left unaddressed, will lead to further institutional decline. While a competent, functional IAS may not be a sufficient condition for improving key development and governance outcomes, it is likely a necessary one. Fortunately, a host of new, data-driven research sheds light on the conditions under which the IAS can become more efficient and effective in (a modified version of) its present structure.

Cleaning Rust From the Frame

While small in number, the influence of the IAS is outsize. It constitutes but a tiny fraction of all government bureaucrats, collectively (and, typically, pejo- ratively) referred to as babus in Indian parlance—there were 3.3 million indi- viduals employed by the government of India (at all levels) in January 2014, but roughly only 4,800 serving IAS officers as of January 2015.6

Yet, perhaps no single bureaucratic entity has received more attention, from actors ranging from government commissions to op-ed columnists, than the IAS.7

This group represents the crème de la crème of the Indian civil service. Dating back to the times of the British Raj, when it was known as the Indian Civil Service (ICS), the IAS has occupied the most pivotal administrative posts across India at every level, from administrative districts (analogous to U.S. counties) to states, all the way up to the central government in New Delhi.8

Over time, however, even sympathetic voices admit that this “steel frame,” as then British prime minister David Lloyd George termed the ICS in 1922, has deteriorated.9

An increasingly intransigent political executive has repeat- edly abused its authority to transfer, suspend, and promote officers at will, damaging the morale of the service and brazenly politicizing its very essence. The quality of new hires is said to be falling as the best and brightest college graduates are unimpressed by uncompetitive public-sector wages, while those who do enter government service are oThen not allowed to develop domain expertise that can inform policymaking in an increasingly complex, intercon- nected world. “The overwhelming perception,” one commentator quipped, “is that corrupt bureaucrats are despised but thrive; the honest are respected but do not rise; and idealists end up in the boondocks.”10