>brad, thanks for your response. your answers are helpful but perhaps
>i should also mention the hidden question: do you see this rise in
>growth/GDP as a "good thing" (for india)?
Yes...
> do these numbers translate
>to anything for the common man?
Not (or not yet) for the bottom 40% (or the bottom 60% in places like
Uttar Pradesh or Bihar).
>those who responded to did so in a
>manner that suggests that you consider GDP as a sufficient measure
>of quality of life. is that true?
No. GDP per capita is correlated with quality of life (because more
resources give you more opportunities). But the correlation is not
that strong. In fact, I just heard Bill Easterly give a talk about
the extraordinary divergence between GDP per capita growth in
Pakistan over 1950-1980 and the *failure* of any measures of human
development to show significant progress. Things like 3% measured
female literacy in NWFP...
>...if these gains are at the
>cost of long term harm (especially in a country like india where
>environmental regulation are lax and enforcement is non-existant,
>and that is partly true for labour rights, social security, etc)?
Jeff Sachs (who I heard talk about this last fall, when he was giving
his "Tropical Underdevelopment" talk
<http://www.cid.harvard.edu/cidwp/057.htm><http://www.cid.harvard.edu/cidwp/057.pdf>)
would answer your question with a "yes" as far as the Ganges Valley
(where in his view increased agricultural production has brought with
it large-scale present and future ecological devastation), but
clearly no in South India, in Maharashtra, and in Gujerat, where the
environmental burden of rapid growth is proving far lighter. I know a
lot less about this than he does...
>
>in short, would you call the changes in india positive and proof of
>the effectiveness of free market systems working with a liberal
>social agenda, such as seems to be the claim (not about india, but
>about the combination of free markets and liberalism) of someone
>like paul krugman of MIT (princeton?).
Another decade of rapid growth, and India may indeed become the
poster child for neoliberalism. The shift in measured economic growth
rates around the time when the Rajiv Gandhi administration takes the
first steps toward dismantling his mother's and grandfather's
"license raj" is impressive. I do believe that the state *must* do
infrastructure investment (because nobody else will) and *must* use
its tax system to equalize the distribution of income (because if it
doesn't democracy is unsustainable--and you wind up with rule by the
death squads). But I also fear that outside the charmed circles of
the "old" nation states of northwest Europe and of the Asian Pacific
Rim, the state takes on additional tasks at great peril and great
risk: what seem like sensible policies to allocate scarce foreign
exchange and so preserve reasonable terms of trade turn into excuses
for corruption.
I don't, however, think we know much about what pieces of neoliberal
reforms are truly beneficial, and what ones simply widen the
distribution of income without doing much if anything for the people.
Dani Rodrik (who also knows a lot more about South Asia than I do)
inclines toward the belief that it was the freeing-up of access to
foreign-made capital goods in the mid-1980s that had the big
beneficial effect on growth, and that the stuff since (like the
expansion of the stock market) has had smaller effects...
Brad Delong
