“Less excess and more access”

Jagdish Bhagwati is one of the great professors of Columbia University and truly one of the great scholars of international trade and development. I don’t think the Left will be happy with his recent comments on the benefits of growth-oriented policies over alternative “redistributive” developmental models.

Many on the left are suspicious of the idea that economic growth helps to reduce poverty in developing countries. They argue that growth-oriented policies seek to increase gross national product, not to ameliorate poverty, and that redistribution is the key to poverty reduction. These assertions, however, are not borne out by the evidence.

Growth, Bagwati argues, is what is best for the poor.

In almost willful ignorance of the fact that the growth-centered model has proved itself time and again, skeptics advocate an alternative “redistributive” developmental model, which they believe will have a greater impact on reducing poverty. Critics of the growth model argue that it is imperative to redistribute income and wealth as soon as possible.

Growth produces wealth. Wealth allows the poor to purchase education and health care, and thus improve their lot in life. (What else is poverty than the absence of wealth?) This combined with access to education will erase poverty faster than redistributive schemes. But how will this sell politically?

But the political sustainability of the growth-first model requires both symbolic and material efforts. While growth does benefit the poor, the rich often benefit disproportionately. So, to keep the poor committed to the system as their economic aspirations are aroused, the wealthy would be well advised to indulge less in conspicuous consumption.

At the same time – and more importantly – the poor need greater access to education in order to increase their economic opportunities and social mobility. “Less excess and more access”must become the principle that guides development policy.

Emotions and dogma trump evidence. The poor stay poor.


Leave a comment

Filed under Economics

Share Your Thoughts

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s