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Interviews | Arvind Panagariya, a professor of Indian economics at Columbia University interviewed by Ullekh NP
Arvind Panagariya, a professor of Indian economics at Columbia University interviewed by Ullekh NP

Arvind Panagariya, a professor of Indian economics at Columbia University interviewed by Ullekh NP

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published Published on May 17, 2013   modified Modified on May 17, 2013
-The Economic Times


Arvind Panagariya, a professor of Indian economics at Columbia University, hits out at Nobel laureate and Harvard University professor Amartya Sen over his call to confront MPs with the "number of deaths" a delayed Food Security Bill can cause. The former chief economist at the Asian Development Bank counters Sen's argument that it is high social spending that has contributed to the economic growth of Asian economies such as Japan, Singapore, China, etc. Panagariya says there are no "systematic empirical studies that support the hypothesis". He also attacks Sen's long-standing arguments about the "Kerala experience". Edited excerpts from an interview with Ullekh NP:

* As regards malnutrition in India, Professor Amartya Sen has often said that "India has fared worse than every other country in the world". Is it an exaggeration?

"Exaggeration" is perhaps the wrong term-I would say professor Sen is relying on estimates that are on such shaky ground that every serious analyst should at least question rather than regurgitate them. The reference here is to child malnutrition, and the World Health Organization methodology that leads to this patently absurd conclusion lacks a scientific basis. Based on official ICDS data, this methodology also leads to the conclusion that Kerala, which professor Sen ceaselessly cites as the model state in terms of social indicators, ranks a low sixteenth among Indian states in child nutrition, behind even Assam. It is as silly as it gets.

* Now he is of the view that it is better to pass the Food Security Bill in its current form than not pass any at all? He also wants the media to highlight and confront MPs who were disrupting Parliament with the number of deaths the delay in its passage can result in. What to make of these statements?

Frankly when I first saw this statement attributed to Sen in a story in The Economic Times, I was convinced that the reporter had misunderstood. So I was taken aback when I heard Sen forcefully attribute a specific number of child deaths-1000 per week-to the lack of passage of the Food Security Bill on a TV debate the next day in which I appeared opposite him. I often say in jest that serious economists are handicapped in policy debates in India because their opponents feel entitled not only to their arguments but their own facts as well! And here I was facing the same from Sen.

Deaths often have multiple causes. In the case of children, a partial list includes premature births, low birth weight, infections, congenital diseases, accidents, poor water quality, poor medical assistance and poor diet. I am mystified by how one can attribute a precise number of child deaths to the absence of a policy that has not been in place for a single day, a policy that is subject to so many lapses and leakages along the implementation chain, whose impact critically depends on how the beneficiaries adjust their consumption in response to it, and which can after all potentially impact only calorie intake and no other causes of death.

Besides, a serious economist must also ask how she could get the largest bang for the buck. For example, if child death is the main concern, will we not economise on resources by taking direct action against its various causes instead of subsidising calorie consumption for all? Will direct cash transfers complemented by media campaign and extension services informing public on the importance of balanced diet not be more effective? Should we not invest a part of the available resources on harvesting low hanging fruits in other areas (for example, prevention of road accidents that are known to have claimed 2,586 lives per week in 2010 and combating tuberculosis)?

* Professor Sen had been saying that he never talked about "the Kerala model" of development (with stress on social spending) but only about "Kerala experience". What are your comments?

Talking about an experience without articulating the underlying "model" is not much help for policy-making in other states. Unless one takes a view on which specific policy measures were behind the superior outcomes of the documented experience, it is not clear how one can draw any lessons from it for other states.

* In India's Tryst With Destiny, the book you co-authored with professor Jagdish Bhagwati, you have said that what paid off in Kerala was the growth-oriented model. Do your findings "expose" professor Sen's long-standing arguments?

They do if Sen's argument is that redistribution and public spending in Kerala account for its success in education and health. Our book documents that Kerala started with significant lead over other states in education and health with the additional gains in the post Independence era being comparable to some other states. Its per-capita private health expenditure in 2004-05, the latest year for which we have such data, was nine times its public health expenditures and more than twice that of the nearest rival among large states, Punjab.

Even in rural areas, setting aside two or three tiny northeastern states, the proportion of students in private schools at 53% in 2010 was higher than the nearest rival, Haryana, by 13 percentage points. Among the original fifteen largest states, Kerala also has highest inequality. And thanks to its embrace of globalisation, remittances are so large that despite being fourth among the largest 15 states according to per-capita state domestic product, Kerala has the highest per-capita expenditure.

* Professor Sen has given the examples of Asian economies such as Japan, Hong Kong, Singapore and more recently China to say that in Asia it is social spending-based policies that have resulted in economic growth.

At this point, this is at best a hypothesis. At least I have not seen systematic empirical studies that support the hypothesis (by Sen). On the other hand, there is a large body of literature supporting the hypothesis that more conventional pro-growth policies such as trade openness, flexible labour markets, provision of infrastructure, stable macroeconomic environment and skill creation were behind the miracles those countries produced. There is much debate about the role of industrial policy but at least to my knowledge there are few studies arguing that social spending catalysed and sustained these miracles. More likely, the causation mostly ran the other way around with growth providing increased revenues for social spending.

* Do you think Professor Sen sometimes resorts to -- what some section of economists call - pamphleteering?

As a Nobel laureate and the only one (Indian) so far in my field, Professor Sen brings huge glory to India and makes me proud. I only feel humbled to have ended up on the opposite side of him on some of the critical policy issues.

The Economic Times, 17 May, 2013, http://economictimes.indiatimes.com/opinion/interviews/i-w
as-taken-aback-by-professor-amartya-sens-comments-on-food-
bill-arvind-panagariya/articleshow/20103644.cms

Image Courtesy: The Economic Times


The Economic Times, 17 May, 2013, http://economictimes.indiatimes.com/opinion/interviews/i-was-taken-aback-by-professor-amartya-sens-comments-on-food-bill-arvind-panagariya/articleshow/20103644.cms


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