The Debate Over Government as Solution or Problem Continues

It has become commonplace to hear the assertion that countries like China and Singapore grow because of their governments while countries like the US and India grow in spite of it (I have heard both of these two gentlemen make the point, I'm not sure which came up with it first).

In this vein the NYT has just published a great story (H/T: Dustin) on the rise of the new city of Gurgaon in the New Delhi suburbs. Instead of just waiting for the notoriously slow moving Indian government to provide services, the new tenants have taken the initiative themselves:

It is 8 p.m. on a recent Tuesday, time for the shift change at Genpact, a descendant of G.E. and one of Gurgaon’s biggest outsourcing companies. Two long rows of white sport utility vehicles, vans and cars are waiting in the parking lot, yellow emergency lights flickering in the early darkness, as employees trickle out of call centers for their ride home. These contracted vehicles represent Genpact’s private fleet, a necessity given the absence of a public transportation system in Gurgaon. 

From computerized control rooms, Genpact employees manage 350 private drivers, who travel roughly 60,000 miles every day transporting 10,000 employees. Employees book daily online reservations and receive e-mail or text message “tickets” for their assigned car. In the parking lot, a large L.E.D. screen is posted with rolling lists of cars and their assigned passengers.
And the cars are only the beginning. Faced with regular power failures, Genpact has backup diesel generators capable of producing enough electricity to run the complex for five days (or enough electricity for about 2,000 Indian homes). It has a sewage treatment plant and a post office, which uses only private couriers, since the local postal service is understaffed and unreliable. It has a medical clinic, with a private ambulance, and more than 200 private security guards and five vehicles patrolling the region. It has A.T.M.’s, a cellphone kiosk, a cafeteria and a gym. 

“It is a fully finished small city,” said Naveen Puri, a Genpact administrator.

Self-sufficient buildings are obviously nothing new to anyone who has spent time in the developing world, or even in rural parts of the highly developed. What sets Gurgaon and its Indian cousins apart is their sheer scale. It is hard to think of anywhere else in the world where entire cities are being built by the corporate sector. Please do yourself a favor and read the whole article, it has got a lot of good information in it.

This post also caught me eye because it shows again how completely commentators both inside and outside of India have bought into the idea that business and government there are inherently at odds with each other. I can only really recall having seen one good counter to this way of thinking:

India is said to grow at night while its government sleeps. The quip, beloved of Indian businessmen, is often invoked to rubbish a corrupt and incompetent state and to praise a supposedly heroic entrepreneurial class. But there is something wrong with this picture. In many sectors, Indian entrepreneurs make money not in spite of government interference, but precisely through colluding with a state that provides the land, licences and rent-seeking opportunities on which they thrive.

I'm not sure how persuasive this argument is to readers in South Asia who have to deal with the still powerful remnants of the Permit Raj on a daily basis. However, I think at the very least it should serve as another reminder that it is always important to challenge the paradigms which do so much to determine how we see the world around us.