06 Jul 10 Documentation and growth – the trickle up way
As a competitive intelligence professional in an emerging economy, documentation is my pet peeve. Business and economic growth in developing economies will be higher with greater transparency and information, all other things remaining unchanged.
The argument is simple. Under-documentation is a big impediment to decision making. It makes informed decision making very expensive. This means that there is less efficiency in the system as a whole.
Market research professionals and competitive intelligence practitioners in India have long cried hoarse about the need for improving the (government) statistical machinery. For without it, we are all shooting in the dark.
I recently came across another interesting angle on documentation in developing economies!
Hernando de Soto, well known Peruvian economist and guru of trickle up capitalism, argues for yet another reason for improving documentation in the developing countries. He argues that increased documentation of activities (including identities of people) brings them into the legal system. They are then able to participate in the “neighbourhood economies” and this is a way out of poverty for them. This is how the “trickle up” happens.
A slum dweller without an address and identity proof finds it much harder to get employment than one who has it. If he owns a hut with a clear title, it has some value; he has some wealth. Without the title, he owns the hut because his neighbours know he lives there; he cannot monetise it.
His prescription is to start the documentation from the very bottom of the pyramid.
Nandan Nilekani’s initiative – the Unique Identification Authority of India (UIAI) for giving a unique ID (UID) to each citizen; does not have Soto’s rationale for documenting identities as part of its vision or mission; but will serve the same purpose.
The next step for the government is to integrate the UID with the remaining statistical machinery so as to have consistent information and databases. Put these developments together with the recent Right to Information Act – and I think I am beginning to see a light at the end of the tunnel – albeit a very small one.