Smart City Challenge: Testing The Spirit Of Competitive Federalism

by Prashant Kulkarni - Jan 31, 2016 06:53 PM +05:30 IST
Smart City Challenge: Testing The Spirit Of Competitive Federalism

The contemporary urban landscape, a fruition of an eighteenth century convenience, occupies a strategic node in the global economic space.  Symbolizing dreams, wealth and aspirations besides being proximate to centres of power and policy, cities are a nucleus of physical, financial and human capital. Socio-eco-demographic driven conflicts, however, recurrently render the city administration dysfunctional. Past endeavours of urban rejuvenation in India including the much publicized JNNURM ended up as attempts in mere incrementalism.  Smart cities thus seem an ambitious attempt to ensue departure in the frame of thinking.

Often, performance-buttressed policies remain a rhetoric giving way to the exigencies of provincial and central politics. Noble intentions notwithstanding, policy execution is an assignment of reconciliation of heterogeneous constituencies each of which might command certain measure of veto power. In the ensuing game of chicken, electoral dynamics induces the government to opt discretion as better part of valour. The end result is however, the policy machinery getting entrapped in a classical prisoner’s dilemma.

Competitive federalism was apparently envisaged to break out of this dilemma. By ranking states on parameters like ease of business etc., states were likely to be incentivized to undertake legislative and executive liberalization in attracting greater investment enhancing possibilities of increased job creation. Smart City Challenge seemed an illustration of the neo-classical proposition that people respond to incentives. From an initial shortlist of hundred cities, a final list of twenty cities was drawn up based on varying criteria. The process, by most accounts, seems flawless and transparent. Yet, observing the lucky twenty, one could not help noticing a marked skewness through conspicuous absence of cities from states like UP, Bihar, Jharkhand, West Bengal, Haryana etc. Undeniably, apprehensions arise over optics.  

In the heydays of the yore, Socio-Marxist discourse & variants swiveled around seeming trade-off between equality and efficiency. The context might have been the appropriate instrument for wealth redistribution and power-sharing across social coalitions, but the list of twenty draws the memory back to this perceptible trade-off. Nonetheless, while conceding certain merit in the arguments, it was often a camouflage for vote bank politics. Capturing electoral centre stage through assured votes of certain social clusters meant sacrificing rudiments of performance.  Given the relative importance of social coalitions, often diverse at their core, political policy-making degenerated into an outcome of contradictory impulses.

Competitive federalism, in a subtle way anticipates replacing election-driven socio-economic stimulus with an ingredient of state driven competition in seeking a share of the fruits of economic power. Underscored in the roots of the Smart City Challenge is the primacy of merit.  Prima facie, in an ecosystem beached in the groupthink of acceptance towards varying degrees of equality-efficiency trade-offs, this might seem a misnomer. Worse, it might be visualized as pro-urban elite against the romanticized rural and subaltern and is thus potentially bad electoral politics.  Nevertheless, someone has to bell the proverbial cat.

Ostensibly, the Smart City Challenge seems to have resisted populist vote bank considerations. If accepted in right spirit, future competitions might witness greater emphasis on performance given the potential spillovers the selection would entail. Electoral arithmetic would perhaps switch to focus on achievement of position rather than campaign of calumny.  Going forward, city governments might face uncomfortable questions threatening their stay in power, if the city fails to make the cut. The grassroots push might create higher investment on civic performance.  Given the inelastic supply of resource, ‘smart city’ and consequent spillovers might induce cities to try and outbid each other. However, changes in dominant narrative follow a long cycle, typically, longer than electoral cycles.

The pivot of the customary intellectual discourse is the apparent structural asymmetries in socio-economic dimensions. These impede cities in the northern and eastern belt in competing on equal footing with the more advanced southern and western belts.  It might in consequence be enticing in any case from electoral vantage to select few cities from UP, Bihar, Bengal etc. Albeit good optics and veneer of equality, it would have struck a blow at the philosophical underpinnings of competitive federalism.  

To that extent, there appears to be acknowledgment of the same. The government might have given top ranked cities in the states losing out in the selection process a second chance, yet the repeat exercise too rests in foundations on competitive impetus and not an obsession with Utopian equality.

The outcome of Smart City Challenge points towards good beginning for competitive federalism. Contrary to ease of business rankings, the Smart City Challenge was about a contest in claiming a share for government spoils.  In all likelihood, one might experience some backlash in regions that have lost out. Incontestably, one might anticipate certain grade of probable electoral reverses, yet the answer lies in building a counteraction to the same, maybe in as Mr. Amit Shah’s talk of 51% politics. The answer certainly does not lie in abandoning well intentioned and well designed policy at the altar of short term vote bank compulsions.

The mandate of 2014, as acknowledged by many, is for setting in process of exit from a mindset rooted in the discourse centered on established conveniences of deep-rooted intelligentsia. If PM Modi had not bit the bullet on smart cities, his philosophy of competitive federalism would lie in tatters.  Any signs of succumbing to the pressures, however faint, might send disturbing signals across constituencies.

Narratives once conceded would be extremely difficult to retrieve. In many ways, PM Modi is damned if he bells the cat; damned if he chooses not to bell the cat. Yet sitting on the throne of thorns, in a bid to reclaim the idea of India, to redraft the directions of the storyline, every option is fraught with short term consequences in the least. Smart City Challenge should not end up as a one-off event.  As the event sinks in the coming months and perhaps years, it might lead to similar exercises like Smart Districts, Smart Villages, and Smart States etc. in finalizing resource decentralization. Though premature, one can yet sound guarded optimism at the very least in the understated but astute shift from equality-slanting to efficiency-motivated resource transfer.

Prashant Kulkarni teaches economics, a digital economy and globalization at a leading B-School. His area of interest lies in dissecting resource contestations and human behavior at the intersections of digitization, urbanization and globalization.
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