Accidents happen where the traffic is very disciplined just as they happens where there is no discipline.
(a) Fewer accidents happen when the traffic is disciplined versus when it is not. Delhi is frequently cited as a city with the highest number of accidents in the world for the number of vehicles it has.
(b) Further, in case of an accident in a disciplined setting, it can be comparatively
easier to determine (note: it is not always easy, but easier than the non-disciplined case) who was at fault, since right of way is clearly defined. In an indisciplined environment, both drivers will attempt to beat the heck out of each other. In case it happens in a rural setting in India or in a shantytown, then irrespective of who is at fault, the villagers/slum-dwellers will extort a large amount of sum from the hapless driver or passengers with the threat of force.
Western experience of highways is that it is ultimately the design that has profound effect on the safety and efficiency.
I partially agree with this. The part I disagree with it is the implication that only
the design is responsible for safety and efficiency. The road design as well as the people who use it both have a bearing on safety and efficiency.
A case in point is what is commonly known as "california stop". California traffic laws allow a safe right turn on red lights
Another example may be the provision of turn lanes. I cite this as an example even though it is such an ordinary thing because the lack of such lanes in Delhi causes huge chaos (but no quick clearing). Everyone goes to the far right lane whether or not they need to turn right (when you visualize, keep in mind that in India we drive on the left). As soon as the lights turn green, some people want to turn right, some want to go ahead, and even those who are on the far left want to turn right.
In the following figure,
 = traffic divider
/ = car wanting to turn right
| = car wanting to go straight
(Not pictured: a two or a three-wheeler in the space between two cars)
/ / | | / / 
| | / / | | 
| | | | / / 
Honking at jet-plane decibel levels ensues. A few people manage to turn, a few don't. Meanwhile, the lights turn red again and some people are caught in the intersection and the traffic from other sides is blocked too.
(Which is why in rush hours, traffic lights are turned off and instead manned by a cop who can do a better job than a light).
Chaos is sometime indeed efficient.
If you consider only the short term aim of clearing an intersection, perhaps you are right, but if our aims are:
1. Optimal usage of fuel. I may be wrong, but a modern car is most fuel efficient at 50-70 kmph, not at the 20-60kmph, which are the speeds that obtain in Delhi during daytime. For comparison, in Mississauga, Ontario, speeds are 40-70 kmph during rush hour on city streets and 40-120 on highways. During other hours, they could be 60-80 on streets and 100-140 on highways.
2. Decrease of noise pollution
3. Decrease of accidents (incidentally, as an aside, a few years ago, IIRC, the NHTSA of USA decreed that the word "accident" is to be avoided because there is no such thing as an accident and is to be replaced by "collision."), and
4. Determination of guilty party in case of accident.
then I would part with chaos theory.
A good example of chaos being more effective is to watch how mumbai suburban train load and unload. The amount of passangers getting in and out of mumbai train in a two minute stop is just mind boggling. I wonder that kind of efficiency can ever be achieved on western suburban trains where level of discipline is very high.
This example is mathematically correct, but have you considered livability? These are human beings we are talking of, not objects being loaded in the cargo hold. I wouldn't want to be in such a train day in and day out. Some of us have no option and they must travel in such a train, but even Mumbai-ites want to improve this system.
Unless we build enough capacity, discipline is not going to work
Discipline works whether or not there is capacity. And infact, in low capacity areas, discipline is the only redeeming factor. Consider for example driving in Chandni Chowk area of Delhi versus driving in old and very congested areas of Toronto. Chandni Chowk is wider but driving is horrendous.
As for capacity, it has been observed that the number of vehicles always increases to fill the capacity. Which is why the emphasis here is on public transit and not as much on building bigger highways.
Re: Mumbai trains.
Loading and unloading in Mumbai trains are not as chaotic as you have made it out. In Mumbai, IIRC, people are allowed to get off before those on platform get in. In Delhi Metro by contrast, I noticed people trying to board the train even at the expense of those who were trying to exit it.
I think Delhi's way is more chaotic and supremely undesirable.