Development Economics – Insular and Irrelevant?

Inertia is an influential factor that comes in the way of genuine change. Aided and abetted by vested interests. I think this is the case in the continuation of a subject of study called Development Economics or Development Studies. The dominant Keynesian Macroeconomics was considered unsuitable for what were then called developing or less developed countries. Their problems were considered structural instead of being frictional as was considered true of the advanced economies. No one considered an obvious point – that every economy has its own structure, static or dynamic. Anyway, an entirely separate set of theoretical concepts and frameworks developed to help understand how such economies could (and should) grow, because of the dominant role of the government. Such an approach highlighted the difference between the advanced economies and the developing countries, chiefly those that were coming out of colonial rule and establishing indigenous systems of governance and development. Some old timers may recall the famous three volume study Asian Drama by Gunnar Myrdal.

Some of the key concepts that emerged out of this new study were ‘disguised unemployment’, ‘conspicuous consumption’ ‘structural constraints’ ‘appropriate technology’, ‘input-output analysis’, to name the most important. Among the Marx-inspired economists too there were concepts such as dependent development, unequal exchange, political economy of growth which informed the debate on development. The literature in the 1970s dealt also with ‘aid as development’ and ‘aid as dependency’. An extremely fertile soil productive of many new concepts.   Many policies of ‘developing countries’ owed their rationale to this debate, especially those targeting poverty alleviation. But as the Bob Dylan song says, ‘the times, they are a changing’.

Perhaps, a separate subject was a way of getting the world to pay attention. However, one of the abiding truths of human societies is that every rebellion produces another orthodoxy and hierarchy. Some manage to replace the incumbent, if they managed to control political power. Else, they become one more orthodoxy with its own vested interests. And the way the world works these development ‘frameworks; are overtly or covertly ‘used’ by governments and the corporate sector to push their own agenda, masking it as development. This has become more ubiquitous with the global reach of many businesses originating from the advanced economies. Consider the not so subtle manner in which some of the global technology companies have undertaken to enhance the access to quality education for those who don’t have access or very limited access. So much of intellectual efforts go into developing elaborate frameworks which become an end in themselves.

I am going to argue that it is time to dispense with development frameworks and focus on developing concepts that help us improve our understanding of the problems. Who doesn’t know that there are ground-level problems in improving access to education, healthcare and affordable housing, three of the absolutely basic needs for any human being. You don’t need a PhD to understand the nexus between politicians, bureaucracy and touts which siphons away funds meant for poor people. All of these have been extensively covered by media everywhere. What we need is a practical understanding of what works.

Consider the often spoken of access to education in India. After a great deal of struggle, the GoI finally passed the Right to Education Act but several analyses demonstrate that while numbers have gone up, the quality of education imparted hasn’t. Teachers focus on a formal compliance of finishing the syllabus’ without being concerned about whether the children have learnt anything at all. Similarly, skill development institutions are set up but there is no ecosystem that can absorb the skilled students emerging out of these institutions. And this in a country where we have ITIs (industrial training institutes) have been discussed so many times.

In general, the numbers in India are high. According to Wkipedia, India’s higher education is the third largest in the world next to the USA and China. “According to the All India Survey on Higher Education (AISHE:2018-19) there are 993 Universities, 39931 Colleges and 10725 Stand Alone Institutions with total enrolment in higher education estimated to be 37.4 million with 19.2 million male and 18.2 million female. The Gross enrolment ratio has increased from 25.8 in 2017-18 to 26.3 in 2018, whereas the Enrolment increased from 3.66 crore to 3.74 crore in absolute terms. This denotes that nearly 800,000 new students have entered the higher education in 2018-19.

Source: University Grants Commission 

(https://qrius.com/the-graduates-of-2020-now-what/)

While there is no reason to gloat, these numbers are not discouraging. The problem is what is not conveyed by these numbers, which is the quality of education in terms of teaching and appropriate infrastructure, which is not a subject matter for Development Studies. We will take this up in a later article. For the moment, our point is that development studies keep talking of access to education. The problem in education goes beyond access.

Many of the ‘natural debacles’ during the last ten years or so have clearly shown that gross misuse of natural resources and neglect (willful or otherwise) have caused enormous damages. What we need to emphasize is that these are resources-specific harmful consequences and need a technical understanding rather than economics per se, as evidenced by the floods in Chennai some years ago, the landslides in Uttarakhand, the rampant sand mining to mention a few. There are many more examples all leading to what seems an inevitable conclusion – we need a resources-specific approach to development, supported by impact assessment with all that goes with it. This is what is required for development professionals working at grassroots level.

The laundry list of negatives

Meanwhile, let us list all that comes in the way of obstructing both development and its fruits reaching larger numbers of people than before. Lack of coherent, well-linked policies; misuse of natural resources, corruption at all levels; politics of centre-state relations (specific to India); deep nexus between politicians, bureaucrats, touts; misplaced priorities influenced by politicians’ personal agenda or elections; not so strong and robust institutions, some in fact porous; deep-rooted caste and ethnic prejudices of government employees, especially in matters relating to minorities and the poor; ineffective public distribution system with massive leakages and inadequate infrastructure; deep-rooted caste prejudices; unused budgets; moral hazard. Now compare this with the course structure of the leading educational institutions offering Masters in Development Studies and ask yourself whether they address in any real sense the challenges faced. I have taken a detailed look but am refraining from mentioning names of universities.

To this let me add one more factor that has serious implications for the quality of Indian democracy – the entry of politicians in mainstream businesses since the process of economic reforms began in 1991, in itself a topic worthy of study. Until 1991, politicians’ interest didn’t extend beyond education and a little bit in hospitals. The promise of increased opportunities was too enticing to be ignored, especially as it offered many vehicles to invest the enormous amounts of ‘undisclosed & (undisclosable) amounts’ that kept accruing to politicians. Not just construction but radio taxis, civil aviation, hospitality, telecommunication, to mention a few have been the beneficiaries of massive flows of funds from politicians, in power or otherwise. It is instructive to here that deep links between the people and institutions of the over-world (opposite of underworld) and such funds. After all, there has to be a machinery and mechanism to funnel such funds into the mainstream. They then find their own way because the path has been cleared. This also means that so many people would have been deprived of getting into some of these businesses.

In sum, what can we make of a subject that blissfully ignores all that actually affects development. One of the objectives of this writing was to show the disconnect between problems faced in development and the topics of study in Development Studies. I am making a plea for a common sense based, resource-specific approach to development. This will not satisfy academics but this doesn’t seem a subject for academic but professional studies, preparing individuals to work in the vast development sector.

I will move on to other aspects of my inquiry into the field of development and macroeconomics