I had high expectations from the article entitled "The Economic Consequences of Professor Amartya Sen" (July 10) by economist Arvind Subramanian, a fellow Washingtonian with an office around the corner. I imagined that he might scrutinise the Nobel Laureate's work and engage creatively with key policy recommendations of Sen's new book with Jean Dreze, An Uncertain Glory: India and Its Contradictions.
Unfortunately, the article disappoints on many fronts. In classic polemical style, Subramanian assigns the name "Redistribution through Rights and Entitlements" or "RRE" to programmes he views as busting the Indian budget, and then unconvincingly attributes them to Sen. He never quite defines RRE. Is redistribution really the only reason a government provides public goods and services? No. There are clear efficiency reasons for doing so: to sustain long-term economic growth and advance human capabilities. Dreze and Sen repeatedly document how India has neglected critical investments needed to deliver sustained inclusive growth - investments like those described by my friend Indira Rajaraman as cited in his article. Subramanian neglects this neglect.
Subramanian fails to engage the broader philosophical issue - that it is not just growth, but the quality of growth, and especially its inclusiveness across groups of people and dimensions of well-being, that we should be aiming for. Sen's transformative conception of growth and development, accepted by diverse economists including Nobel Laureate Jim Heckman at Chicago and Angus Deaton at Princeton, is apparently not appreciated by Subramanian.
Since we are speaking of the economic consequences of Sen, then clearly all of the budget-breaking RRE policies Subramanian attacks - like energy subsidies - are supported by Dreze and Sen, right? Of course not! Time and again Dreze and Sen rail against fuel subsidies and other giveaways that primarily benefit richer folks. They provide reasoned assessments about the policies they support and those they don't. But these clear distinctions are overlooked by Subramanian -inaccurately so.
Surely the programmes supported by Dreze and Sen represent a large portion of government expenditures, thus bear primary responsibility for the various macroeconomic ills recounted by Subramanian? Hardly. Even the Asian Development Bank observes that India underspends: it has only half the average social protection expenditure (as a proportion of GDP) as the lower middle income countries in Asia. If there has been an increase in these meagre expenditures - which is less than GDP's rise during the same period - this indicates just how paltry the original levels were.
Subramanian's final reflections display a vivid lack of comprehension of Sen's work. He appears puzzled that Sen can support freedom on one hand and public action for food on the other. Perhaps a quick read of Sen's Development as Freedom would remind him of the notion of effective freedom, which is enhanced when a marginally nourished family now has the capability to be sufficiently nourished due to public action. It would also reveal that Sen the academic and Sen the advocate have always been one and the same, and moreover the quality of the mind behind the careful arguments should command respect.
James Foster, Professor of Economics and International Affairs and Director of the Institute for International Economic Policy, George Washington University
Washington DC
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number
