April 21, 2009CongressEconomyeducationincentivesmadrassaPublic PolicyUPAUttar Pradesh

Me too madrassa

The rational school operators of Uttar Pradesh

This is an archived blog post from The Acorn.

Just like over nine out of ten families in Karnataka, many school operators in Uttar Pradesh demonstrated that they are rational actors. If the Indian government has announced that it will give Rs 325 crores over the five years to madrassas (which, among others, means an honorarium of Rs 6,000 per month to graduate teachers and Rs 12,000 per month to post-graduate teachers”) then it is perfectly rational for private non-religious schools into madrassas. Perhaps private schools operated by Muslims are taking a lead in this—but it should not surprise anyone if people from all faiths jumped in to get a share of the pie.

Of course, the Ministry of Human Resources Development officially doesn’t get it. It has called upon the Uttar Pradesh state government to conduct an enquiry into why people are behaving rationally, and responding to incentives.

The UPA government has been schizophrenic in its understanding and application of incentives (see this post on Acquired Incentivo Deficiency Syndrome, by The Rational Fool). It seems to understand them at a political level where it has extinguished equality of opportunity for an entitlement economy. But it has repeatedly failed to understand them at a policy level, where it has pretended that nice sounding intentions can replace sound incentive structures.

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