Nobel laureate Paul Romer says the US could not replicate India’s Aadhar success — here’s why

Nobel laureate Paul Romer recently hailed India’s Aadhaar system as a world-leading technological platform that has revolutionised access to government services. Speaking at the NDTV World Summit, Romer declared, “Aadhaar is the most important technological system in the world right now,” highlighting its role in providing direct benefits to millions and transforming governance in India.

A foundation for growth

Aadhaar, India’s unique identification system, has played a pivotal role in ensuring that government benefits, such as Direct Benefit Transfer (DBT), reach the intended recipients without leakage. Romer emphasised that Aadhaar has solved a crucial problem — authenticating the identity of citizens — and built a platform for the delivery of services that have reshaped the Indian welfare system.

“With that foundation, you can then build all of these fantastic services that you now enjoy,” he remarked, pointing out how Aadhaar's design was aimed at benefiting the public rather than creating wealth for a select few.

While India’s success with Aadhaar is undeniable, Romer noted that similar platforms have failed to take off in other countries, particularly in the United States. According to him, the private sector monopolisation of such platforms in the West has prevented the creation of government-controlled systems like Aadhaar.

He praised India's foresight, stating, “What people in India saw is that they could build a platform of Aadhaar that was controlled by the government and could be used for the benefit of the people.”

Despite numerous legal challenges in India’s Supreme Court, the government pushed the Aadhaar project forward, ensuring that it reached millions of citizens, particularly those in need. Romer acknowledged this resilience, saying, "In the West, we are too hamstrung by the judiciary," suggesting that India's ability to navigate its legal hurdles has been key to Aadhaar’s success.

Urban development and China

Shifting the conversation to India's urban growth, Romer highlighted the importance of urbanisation in driving economic productivity. He explained that urban centers are where GDP is produced, and that India has an opportunity to unlock tremendous value by focusing on land assembly and creating modern cities.

“The challenge with urbanisation is land assembly. If you can assemble a large enough parcel of land...you can turn it into land which is phenomenally valuable by creating a modern city there,” Romer suggested.

Romer also touched on the broader geopolitical context, particularly focusing on the aspirations of China and Russia to function as empires. He stressed that both countries seek to extend their influence beyond national borders, using their "empire" mindset to meddle in global affairs. India, Romer argued, is at a crossroads and must decide whether to support the concept of sovereign states or lean toward empire-like governance.

“India should be able to say we don't like empires. India's stand could decisively tip the balance," he concluded.

(With inputs from agencies)