Investments in education could spur economic growth in India (Credit: World Bank)
I had the wonderful opportunity to listen to my former professor Amartya Sen at the World Bank who attempted to answer this very pertinent question in the minds of many today. The fundamental question at the core is why is it that while we rate democracy as the better form of government, it is single party ruled China that has been more successful at bringing more people out of poverty than democratic India? The implications for India are clear; investing in education and health for all its citizens is the best solution for long term growth.
The role of the Indian government in helping foster the success of India’s IT industry is a point I disagree with Kalpana Kochhar about. Kalpana, World Bank regional Chief Economist for South Asia, posted a comment disagreeing with my views on the subject on ‘Africa Can Reduce Poverty’. Following is my counterpoint to her:
India’s health system faces some major challenges. In some respects, the hill India’s health system has to climb is steeper than that facing other developing countries. The good news is that the innovation that India is famous for in other sectors, as well as in health technology, is now starting to make itself felt in the health system. Not only may these ideas benefit India’s poor; they may also provide food for thought for other countries.
In this post, we sketch out the challenges facing India’s health system. In the next two, we outline two innovative approaches—one government, one private—in the state of Andhra Pradesh.
Recently, economists began proposing the strategy for industrial development in low-income countries. But there are few explicit recommendations as to what role governments should play in fostering industrialization. Related question is whether we can draw useful lessons from successful experience of industrial development in East Asia for other regions, such as sub-Saharan Africa (SSA).
The paper entitled “A Cluster-Based Industrial Development Policy for Low-Income Countries” (Policy Research Working Paper 5703) proposes an industrial policy consisting of four pillars of recommendations based on roughly 20 case studies of industrial clusters in Asia and sub-Saharan Africa.
In the famous movie Forrest Gump (1994), which is the story of an innocent man who represents how the world should be, the main character Tom Hanks remembers: “My Mama always said, ‘Life is like a box of chocolates; you never know what you’re gonna get.’” Development economists working on industrial policy should always keep in mind that motherly wisdom and maintain humility in their random quest for the recipe for economic growth.
In a recent paper on ‘Growth Identification and facilitation: The role of the state in the dynamics of structural change,’ Justin Yifu Lin and I have tried to suggest a rational way of looking at the trial-and-error process that successful economic development always involves. In a new post on his excellent blog ‘Africa Can,’ my colleague Shanta Devarajan welcomes our work but asserts that we gloss over the politics that underlie efforts by governments to guide certain industries toward success.