The eradication of polio in India was a remarkable achievement. The government implemented a universal immunization programme aimed at 100% coverage of children under the age of 5. A standard dose of vaccine was given to every child across the country including remote villages. It was a huge logistics operation.

Though right now India’s logistics management capabilities are being severely tested to deliver new currency notes to banks and ATMs around the country, India’s ability for “Policy Implementation 1.0", which requires management of large logistical challenges, is remarkable. The country has the ability to carry out a standard procedure in millions of locations, many in very difficult conditions. It conducts the world’s largest elections, bringing electronic voting machines even to remote places in the high mountains. The issuance of unique, electronic identity cards to all Indians—the Aadhaar project—was the latest illustration of the country’s logistical capabilities in implementing a public policy.

Policy Implementation 1.0 can work well when one size fits all—the same dose of the same polio vaccine, the same procedure for voting, the same identity card. However, many public policies require something in addition to the ability to deliver a standard product or carry out a standard procedure across the country. They require “Policy Implementation 2.0" capabilities, to change behaviour of citizens and obtain cooperation of communities. An example is sanitation. Large programmes for installing toilets have not been able to change behaviour to eradicate open defecation. Public health programmes invariably require better local governance, rather than central delivery of services. India’s persistent neglect of local governance capabilities is the principal reason for public health in India lagging behind China, Vietnam, Thailand, Indonesia, and many other developing countries.

More complex changes in the economy require coherence amongst many policies, coordination amongst many agencies, and cooperation of many stakeholders. They require even more sophisticated “Policy Implementation 3.0" competencies. Industrial policy is an example of a 3.0 level policy challenge. As in the case of Policy 2.0, the behaviour of stakeholders must be changed—in this case, entrepreneurs. However, several conditions in the economy must be changed together to improve conditions for enterprises to be productive and to attract more investments into the economy. Physical infrastructure must be improved. An array of regulations and institutions must be tuned concerning labour management, corporate governance, land acquisition, and other subjects. Often, financial institutions need change too.

The complexity of Policy Implementation 3.0 generally provokes two opposite responses. One is, “just leave it to the market". The market will figure out what is best. The other response, when large-scale change is required, is to use a top-down implementation approach.

When the market is not working, or when the market is not producing the outcomes society wants, citizens demand that the government must act. This is the challenge for many ideologically pro-market governments today. In the US and the UK, for example, citizens are demanding that their governments must do something to create more jobs by inducing more production within their countries. Therefore, the need for some form of “industrial policy" has emerged in these countries too.

The opposite response, to leave it to the market, is central planning. This approach was adopted by many countries, including India, for industrial development following the example of the Soviet Union. Central planning down to the last level—how much of what will be produced by whom—was basically a Policy Implementation 1.0 approach applied to a Policy 3.0 challenge. With contradictions in regulations by many ministries and departments, and with further regulations attempting to sort out the contradictions, Indian industrial development got tied up in knots of red tape. Entrepreneurship and innovation were stifled.

In 1991, India threw out central planning of industry. Industrial policy became a bad word following the fashion of the Washington Consensus which urged governments to leave industrial development to the market. That has not worked too well for India either. Manufacturing has not grown as much as it should have considering India’s need for more jobs outside the agricultural sector, and considering the potential India had, which was comparable to China’s, whose manufacturing sector has grown since then to seven-eight times the size of India’s.

So India is at the crossroads again. What approach should it take to create more jobs? Jobs cannot be planted into the economy top-down by the government (except jobs on government’s own rolls). A jobs policy must stimulate changes in behaviour of entrepreneurs, employees, and investors. To do this, it must make many changes in many areas in a coherent and coordinated manner. It must apply a Policy Implementation 3.0 process.

Policy Implementation 3.0 requires participation of many ministries and agencies, and many stakeholders. The agencies have their own turfs and tend to operate in their own silos. Coordination amongst them is generally difficult. Stakeholders in a jobs policy, such as employers, unions, environmentalists, landowners, and communities, will have contending views on many matters. To bring them together, to convert the confusion amongst agencies into coordination, and the contentions amongst stakeholders into collaboration, requires the application of systematic processes for their participation in the shaping and implementation of policies.

Policy Implementation 3.0 requires a different mindset towards management of complex systems, as well as different competencies than Policy Implementation 1.0 (or even 2.0). India’s progress will not be as fast as it could be, and needs to be, until governments at the Centre and in the states change their approaches to development and implementation of policies. Less top-down control; more systematic participation. In fact, a principal role of the Centre must be to build capabilities at various levels of governance, in cities, in states, and in the Centre itself, for participative policy formulation and implementation.

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