The recent 2G spectrum scam has raised an important question: How can the allocation of scarce public resources to private enterprises be institutionalized? In this opinion piece, three professors -- Ravi Bapna from University of Minnesota's Carlson School of Management, who is also head of the Srini Raju Centre for IT and Networked Economy at the Indian School of Business in Hyderabad; Alok Gupta, who is also a professor at the Carlson School of Management; and Arun Sundararajan from New York University's Stern School of Business -- maintain that the overarching objective of any institutionalization effort should be to maximize social welfare and that a nuanced analysis of the business environment along with a thoughtful, scientific methodology are critical for the success of such resource allocation.
For a nation that has no tradition of auctioning scarce public resources to private-sector organizations, the recent outcry over the 2G spectrum scandal is both intriguing and encouraging. It's a sign of hope when the citizens of India's vibrant democracy are shown a better way of governance, they accept nothing less, and will exercise their collective public voice if they come across egregious infractions.
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