This month's Prospect magazine has an interesting interview with Amartya Sen, Nobel Prize winning economist, about his new book with Jean Dreze "An Uncertain Glory: India and Its Contradictions". The book is reviewed by Partha Dasgupta, a famous economist working on economics and the environment, in tandem with another book just out by two other famous Indian economists, Jagdish Bhagwati and Arvind Panagariya called "Why growth matters: how economic growth in India reduced poverty".
- Dreze and Sen argue that the type of GDP growth India has generated has not led to sufficiently fast improvements health and education (the slow pace of reduction in undernutrition was their starting point). This they argue is because the quality of growth is not high--not broad based, market governance stacked against poor etc. They say that in a democracy, the population has to fight for these improvements and that the poor in India have been much too patient.
- Politically, Bhagwati and Panagariya are far to the right of Dreze and Sen. The former pair argue that getting GDP growth is essential to poverty reduction and to generating the kinds of revenues that can now be invested in health and education.
- Dreze and Sen would counter this by saying GDP growth that does not raise health and education is denying itself a further source of sustainable growth--we know that improvements in health, nutrition and education further spur growth.
- Dasgupta says they both are missing the point--the extrenalities generated by India's growth are eroding natural capital such as ecosystems, exacerbated by increasing population pressure and that this is a key trap that is preventing growth from generating improvements in human welfare.
My view? I have some sympathy with parts of all the views, but I come down most strongly on the side of Dreze and Sen.
India's growth is doing well in reducing poverty (Bhagwati and Panagariya), but this poverty reduction is not translating fast enough into education, health and nutrition reduction (Dreze and Sen). This may be due to deep-rooted but misguided beliefs (e.g. Panagariya's vies on the inappropriateness of the global nutrition standards on height for under 2's, even though India was one of 6 countries that generated the standards!), discrimination (e.g. caste and gender--Dreze and Sen), environmental externalities (e.g. half of the Indian population defecates in the open--Dasgupta), poor management of public resources that are expended on health and education programmes (e.g. the ICDS programme which has highly variable performance--Dreze and Sen), a complacent government (where is the urgency on the issues?--Dreze and Sen) and a too-placid civil society (can Brazilian/Turkish/Egyptian riots be far away?).
The Indian Government's apparent complacency on these issues seems like a very dangerous stance to take. As I have said before in the attached paper, they should be as obsessed with child growth as they are with economic growth. If not they might be thrown out of office by an Indian electorate that sooner rather than later decides it just isn't going to take it any more.