When the University of Chicago Center in Delhi formally opened its doors on March 29, no one was more enthusiastic than Luis Miranda, ’89, who along with other prominent Chicago Booth alumni, had advocated for a university presence in India for at least five years.
Miranda was among several hundred members of the university community who gathered for a three day opening celebration, marking the occasion with academic panels, a formal ribbon cutting, and social events.
The Center in Delhi is designed to be a home for research and education for university faculty and students working in India and South Asia, as well as Indian researchers and students. Business, economics, law, and policy represent one of the center’s three broad program areas, along with science, energy, medicine, and public health; and culture, society, religion, and arts.
“It is important for Booth and the university to have a strong presence in India,” said Miranda, chairman of the board of advisors for the nonprofit Centre for Civil Society, and senior advisor for Morgan Stanley Infrastructure.
Akshay Sethi, ’07, president of the Booth Alumni Club of India and director of his family-owned real estate development company, Stellar Group, said that India’s rapid growth guarantees that the nation will be a hub for fresh ideas and challenges. “Having a foothold in the country is really important,” he said.
For the past two years, Sethi has organized the increasingly popular Pan India Booth Alumni Retreat (PIBAR), which he plans to locate at the Center in Delhi this year. The new location will enable the club to reach out to faculty from across the university and schedule events at the time of their visits.
University of Chicago President Robert J. Zimmer opened the celebratory weekend on March 28 at The Taj Palace Hotel, hosting a panel discussion, the Presidential Forum. “The Center in Delhi, together with Centers in Beijing and Paris, is an important step in bringing a much greater global perspective to the university and to enhancing our ability to support our faculty and students’ work as they incorporate a global perspective into their own work,” he said. Dean Sunil Kumar, George Pratt Shultz Professor of Operations Management, moderated a panel discussion on early childhood education on Saturday, March 29, and participated in a discussion, “Interdisciplinary and Cross-Cultural Scholarship and Teaching,” on Sunday, March 30.
The opening panel was moderated by Raghuram Rajan, governor of the Reserve Bank of India and Distinguished Service Professor of Finance on leave from Booth, who noted that India is coming to terms with a slowdown in economic growth and the prospect of a new government after upcoming national elections.
Randall S. Kroszner, Norman R. Bobins Professor of Economics, said that although countries around the world fear the effects of the US Federal Reserve's tapering of the stimulus, nations, including India, should focus on making themselves more resilient to outside influences. For India, this could be a good time to address longer-term issues of governance.
“The question for all countries is how to make our systems more robust,” Kroszner said.
Other panelists were Shobhana Bhartia chair and editorial director of the Hindustan Times Group; Chanda Kochhar, CEO and managing director of India’s largest private bank, ICICI Bank; and Arun Maira, member, Planning Commission of India.
On March 29, Miranda moderated a Booth panel discussion, “Improving Productivity: Private, Social, and Public Sector Perspectives,” following the Delhi Center ribbon cutting ceremony.
Steven J. Davis, William H. Abbott Professor of International Business and Economics and deputy dean for faculty, presented evidence that management practices are better in richer countries. He also summarized two studies that point to an important causal role for sound management practices as a source of productivity and income gains. An experimental study involving large textile plants near Mumbai found that improvements in management practices increased productivity by 20 percent within one year. In an observational study, US companies that were targets of private equity buyouts, and consequent management overhaul, displayed productivity gains as higher net operating margins compared with otherwise similar firms.
Nevertheless, he said, badly managed firms continue to exist as a result of restrictions on competition, barriers to expansion, and in some cases, a lack of information about modern management practices.
“Correlation does not imply causality,” Davis said, “but these two studies say that it is feasible to cultivate better management and to raise productivity as a result.”
Marianne Bertrand, Chris P. Dialynas Distinguished Service Professor of Economics, who has been conducting a long-running study of the Indian Administrative Service (IAS), discussed reasons for inefficiency in the public sector.
Inefficiencies in the delivery of public goods can occur at various times, she said—at the policy selection stage, when elected politicians favor policies for their private monetary or electoral benefits, or at the policy implementation stage, when civil servants and service providers perform poorly. Since citizens are poorly informed about politicians’ actions and decisions, there is lack of political accountability.
Greater accountability is needed, she concluded: “You have to trust that if you give people information they will act on it to take politically responsible action.”
Miranda argued that to improve productivity, India needs to create institutions and policies that encourage economic freedom, increase competition, and facilitate building larger scale companies. He presented data from the port, education, and automobile sectors to illustrate this.
At the beginning of his presentation, Miranda showed a slide of a rundown hut on the Indian side at the high-altitude Himalayan border with China and a high-tech observatory in an adjacent area comprising state-of-the-art telescopes operated from Bangalore. Using the juxtaposition to explain the efficiency gap between various sectors of India's economy, he said, “It is interesting that you can have telescopes managed from Bangalore, but cannot make a phone call from a house nearby!”—Madhur Singh and Judith Crown