Lessons From Bangalore
It is a long-ish article using Detroit as the American problem model, but any City could learn from it, including my own San Francisco:
[...] It needs to be said at the outset that no government in the U.S., not even Detroit’s, has ever imposed the kind of crushing regulations that the Indian government imposed during the height of the notorious License Raj in the mid-’50s. Key industries—steel, telecommunications, airlines—were nationalized, but even more harmful was the Kafkaesque web of regulations that the remaining private businesses had to endure in the name of ensuring a “rational allocation of resources.”
Every move of private industry, big or small, was subject to licensing. Forget setting up a new plant or a factory. If an enterprise wanted to buy or import equipment, change its product mix, or even produce more than its allotted quota for a product, it had to first obtain permission from the Directorate General of Technical Development, a process that could take years and a small fortune in bribes, points out Gurcharan Das, author of India Unbound and former CEO of Procter & Gamble, India. “Large business houses set up parallel bureaucracies in Delhi to follow up on files, organize bribes, and win licenses,” he recalls.
Confronted with a massive fiscal crisis and the prospect of defaulting on its international debt obligations, the Indian government dismantled much of this ridiculous licensing regime in 1991. In a bid to boost exports to replenish the country’s empty foreign exchange reserves, it also eliminated all import licensing and slashed tariffs on capital goods. Both were relics of India’s import-substitution days, when manufacturers were discouraged from buying equipment from abroad in order to build the domestic industry. This jacked up production costs and made the country’s exports hopelessly uncompetitive.
Trade liberalization was a boon for the I.T. industry, which already had escaped many of the stultifying controls that other industries faced simply because the architects of India’s industrial policy had failed to anticipate its birth. [...]
read the rest on your own.