Humans: Still Not So Good with the Whole Prioritizing Long-Term Needs Thing
There’s an interesting article in this week’s Economist comparing the ability of democracies and dictatorships to reduce poverty. Basically it finds that dictatorships (like China) achieve the most extreme results– either the most striking miracles or the most terrible tragedies, often within the span of the same ruler, while democracies (like India) muddle along with more moderate achievements. The analysis is drawn from the work of Ashutosh Varshney of the University of Chicago, who has also done some very interesting work in conflict resolution.
“Why might democracy militate against poverty reduction in poor countries? Mr Varshney has two suggestions. First, democracies have a bias towards “direct” methods of tackling poverty, such as subsidies and hand-outs, which, in the long run, are less effective than “indirect” methods—ie, those that generate faster economic growth. In India, this seems undeniably true. Governments have built up whopping budget deficits, thanks largely to subsidies. Many farmers, for example, receive subsidised or free fuel, fertiliser, electricity and water. But little public money is spent on improvements that would do most to lift the growth rate: in infrastructure, primary education and basic health care. Everybody wants better roads, and nobody votes against them. But every politician promises to build them and hardly any do. Cutting subsidies, on the other hand, is a sure vote-loser.
Second, the poor are not necessarily a homogenous group. In a democratic system, they may organise themselves along lines other than economic class and “the shared identities of caste, ethnicity and religion are more likely to form historically enduring bonds”. If you are born poor, you may die rich. But your ethnic group is fixed. In India, with its myriad linguistic and caste-based groups, the upshot is a dispiriting beggar-thy-neighbour politics. Just as subsidies are easier to deliver than are roads and schools, so are affirmative-action schemes, giving jobs to members of specified castes.
The relationship between caste and class helps explain the wide regional discrepancies in India. Mr Sen has noted that in one Indian state, Kerala, infant mortality has fallen from 37 per 1,000 in 1979, the same as in China, to ten now, compared with 30 in China. He suggests that the improvement relates directly to India’s democratic strengths. The collapse of the public health system in China in the reform era was possible because there was little political resistance, whereas the deficiencies of Indian primary health care are subject to constant public scrutiny.”
