Pranab Bardhan, professor of economics at University of California, Berkeley, has an excellent piece in the Boston Review, in which he explodes a few myths on the rise of India and China:
“What explains this strikingly rapid growth? The answer that continues to dominate public discussion runs along the following lines: decades of socialist controls and regulations stifled enterprise in India and China and led them to a dead end. A mix of market reforms and global integration finally unleashed their entrepreneurial energies. As these giants shook off their “socialist slumber,” they entered the “flattened” playing field of global capitalism. The result has been high economic growth in both countries and correspondingly large declines in poverty….
“As for India, market reforms may not be mainly responsible for its recent high growth. Reform has clearly made the Indian corporate sector more vibrant and competitive, but most of the Indian economy lies outside the corporate sector; for example, 93 percent of the labor force works outside the corporate sector, private or public.
“Take the fast-growing service sector, where India’s IT-enabled services have acquired a global reputation while employing less than a quarter of one percent of the total Indian labour force. Service subsectors like finance, business services (including those IT-enabled services), and telecommunication, where reform may have made a significant difference, constitute only about a quarter of total service-sector output.
“Two-thirds of service output is in traditional or “unorganized” activities, in tiny enterprises often below the policy radar and unlikely to have been directly much affected by regulatory or foreign trade policy reforms. It is a matter of some dispute how much of the growth in traditional services (mostly non-traded) can be explained by a rise in service demand in the rest of the economy, and how much of it is a statistical artifact, since the way output is measured in these traditional services has been rather shaky all along.”
Read the full article: What makes a miracle
As shown by Sugata Basu and Barbara Harris convincingly in “Sonar Bangla?”, there is no relation between relative rise of firm output growth, rural income in WB in mid 1980s with that of land reformation. Neighboring areas like Bihar, Orissa, Bangladesh also saw same amount of agri growth where no land reformation was undertaken.
Bardhan is an old Socialist who unlike Desai, Bhagwati could not shed his baggage. There are concrete data to show more people came out of absolute poverty after reform stated than previous decades in India.
Gini Index of China’s overall income is much more skewed than India which Bardhan conveniently overlooked. The two states where land distribution has been supposed most successful in India – West bengal and Kerala- lag in most economic indicators.
West bengal got the dubious distinction of the state where most people go hungry for most number of days annually. Even worse than Orissa. Without Gulf money, Kerala would have met the same fate.
Anyday, Bibek Debroys, Kasushik Basus will make more sense than Bardhans.
Growth and reforms?
DB – one special joke just for you
Deve Gowda was taking his grandson in the state helicopter to drop him at school. Suddenly the helicopter developed a snag.
the pilot said – ‘sir there are only two life jackets, i am taking one and jumping, you two decide who will take the life jacket” and jumped.
Then Deve Gowda thought before the mommaga takes the life jacket let me make use of it and put on the life jacket and jumped.
Later the mommaga landed safely in a life jacket. How?
Deve Gowda had worn his mommaga’s school bag mistaking it to be the life jacket!
one more please.
When Gowda was the prime minister he received an invitation to attend G-15 Summit in Harare.
He thought G-15 means Gowda -15.
So he went home and told at home that 15 of the clan could go to Harare for the summit. They all got ready.
As soon as they came to the airport they saw a plane standing and all of them ran and put towel from the window to reserve their seats.
Gowda also had a seat reserved with a towel. He got in and sat jubilant.
Then a man came and said – sir please get up this is my seat. You go back.
Gowda – why? I have put the towel first, you go back.
Man- No sir, i have to take this seat only, cannot go back
Gowda- Hoglele, I will not get up, I am the Prime Minister,
Man – yes sir, but I am the pilot!
The Animal-Eyed-One
Thank you. The second joke is very good and original. The dialogs are simply superb!
First joke–I have heard that one with George Bush rushing to jump off with a back pack.
good Informative post