Huffpost Business

Amartya Sen: What India Can Learn From China

Posted: Updated:
Nobel laureate and economist Amartya Sen speaks after release of his book written in collaboration with economist Jean Dreze An Uncertain Glory: India and its Contradictions at Habitat Centre on July 22, 2013 in New Delhi, India. (Photo by Vipin Kumar/Hindustan Times via Getty Images) | Hindustan Times via Getty Images

"Democracy may prevent famines in India, but China is better at investing in education and infrastructure."

Amartya Sen was awarded the Nobel Prize for Economics in 1998. His most recent book with Jean Dreze is “An Uncertain Glory: India and Its Contradictions." He spoke with WorldPost editor Nathan Gardels.

WORLDPOST: The implication of your most recent book is that while democracy, as in India, prevents the worst man-made famine such as we've seen in China during the Great Leap Forward, it does not do well at all in building "human capability" -- literacy, rights of women, basic health care or effective public services and infrastructure.

Both China and India are characterized by rapid GDP growth, widespread corruption, inequality and the princeling problem -- 30 percent of India's parliament members are "princelings"

Yet, as you point out, "China made enormous progress -- even before market reforms -- towards universal access to elementary education, health care and social security." After dismantling and then starting to rebuild its safety net, 95 percent of Chinese today are covered by a publicly funded health care system."

And none of this is to speak of physical infrastructure -- the energy grid, bullet trains, roads, Internet access, sewage systems, etc.

You conclude quite decisively that "Indian democratic practice has failed."

What is the key differentiating factor between India and China with respect to building "human capability?"

AMARTYA SEN: I did not quite say that India's democratic practice has "failed," but rather that it has many deficiencies and huge biases that can be remedied and need to be urgently remedied. What a democratic system achieves depends on what issues are brought into political engagement. Some issues are extremely easy to politicize, such as the calamity of a famine (which tends to stop abruptly with the institution of a functioning democratic political system, as it has happened in several countries, including India), whereas less spectacular adversities provide a much harder challenge. For example, it requires much greater political commitment and also fuller social understanding to use effective democratic pressure to remedy non-extreme undernourishment, or persistent caste inequalities, or the absence of regular medical care for all. These issues, though ultimately very serious, do not look as "urgent" as famine deaths.

Political movements to overcome these deprivations have to be more probing and more investigative about the predicaments of the underdogs, and also more committed to extensive public discussion on these deprivations and their consequences to make them socially unacceptable in a way that famines immediately are. The main barrier here is not so much the political influence of those whom you are calling "princelings," but the lack of an adequately broad and well-informed dialogue. The interests of India's relatively prosperous -- and (in absolute terms) very large -- "middle classes" do get much fuller and stronger airing in the media and in public discussions than the deprivations of the majority of the poor.

"The interests of India’s relatively prosperous –- and (in absolute terms) very large –- “middle classes” do get much fuller and stronger airing in the media and in public discussions than the deprivations of the majority of the poor. "

In more authoritarian states, such as China, governmental choices depend largely on decisions taken at the top –- by political leaders -- with relatively less scope for democratic pressure from below. The fact that the Chinese leaders, despite their skepticism of the values of multi-party democracy and liberty, have been strongly committed to eliminating hunger and illiteracy, has certainly helped China’s economic and social advancement. That deserves huge applause.

And yet as political system authoritarianism makes the fate of the people dependent on the priorities chosen by the top leadership, which cannot be very easily altered by the people, even when the decisions of the leadership go quite wrong. An authoritarian system can go in the direction of South Korea, with many excellent achievements, or that of North Korea, with huge deprivations and hopelessness. Even for China, the achievements have varied over time with the nature –- and political and economic outlook –- of the regime. The high achievements of present-day China in removing poverty and deprivations, which I have been praising, can be contrasted with the failure to take necessary steps for the security of the Chinese citizens during the Great Leap Forward. Even though tens of millions continued to dies over three years (the total mortality from the famine was at least 30 million), people were impotent to bring about any policy change until the leadership itself decided to change its mind.

A similar impotence of neglected humanity partially resurfaced with the regressive health care reforms of 1979. The economic reforms, which were important and constructive, involved excellent reforms for better achievement in industry and agriculture, which were much overdue. However, this positive development in industry and agriculture was combined with a terrible policy of removing the near-universal health coverage for and replacing it by private insurance which a great many people could not buy (the remedying of this mistaken policy did not occur for more than 20 years after the reforms of 1979).

There is something of the “luck of the draw” in authoritarian systems. A well-geared and well-organized functioning democracy can make public policies a matter of reasoned choice by the people. In our joint book on India ("An Uncertain Glory"), Jean Dreze and I discuss in great detail what India can learn from China, for example in education and health care, but these recognitions and understandings, we argue, are best seen as possible inputs into a fuller democratic dialogue in India. We do not recommend in any way the abandonment of democracy in India. We want more democratic practice, and learning from Chinese economic, educational and health policies can be a part of India’s open-minded practice of democracy. We are critical of the limited coverage and biased focus of the ongoing democratic dialogue in India –- that is for sure –- but we are saying much more than that: we want that dialogue to be stronger, broader and more inclusive of the interests of the underdogs of the society.

WORDLPOST: Though it is labeled an autocracy, in reality China’s political class is somewhat inclusive. There are 78 million members of the Communist Party. Elites are permeable –- there are term limits, retirement rules and, in recent decades, regular transfers of power and a collective leadership structure that blocks rule by a dictator like Mao.

While it is true that princelings have an advantage, they are only part of the leadership. The rest rises through tough evaluation and competition through the organization department.

As George Yeo has argued: “China’s post-Mao success is due to its modern day mandarinate at the national level that is largely meritocratic and geared to advancing the common good.”

Might India have something to learn from China?

SEN: I agree that here, too China does offer some important messages for India, and what George Yeo has called China’s “modern day mandarinate” has huge lessons to offer to India. China may not have any less corruption than India, and yet things get done in China with a kind of efficiency, including speed, that is quite rare in India.

"China may not have any less corruption than India, and yet things get done in China with a kind of efficiency, including speed, that is quite rare in India. "

A good example is the contrast in the power sector in India and China. The Chinese electricity supply works much better than in India not because it is privatized (as it is sometime suggested). Both countries have strong public sector dominance of the electricity industry, and each allows participation by the private sector. That is not where the difference is. The difference lies partly in the fact that the responsibilities of the public sector leaders are much more clearly defined and strongly executed in China than in India. While the Chinese have ensured adequate investment in the power sector, Indians have tended to neglect that.

Another difference is that Chinese have extended electricity connections to nearly the entire population, whereas a third of the population in India do not have any electricity connection. Rather than ensuring adequate power capacity for the entire population, India has used precious public resources to provide subsidized electricity to those who are well connected, and even supply free electricity to selected groups of consumers, such as farmers. The modern day mandarinate in China has provided something from which political and social leaders in India can learn and use that knowledge to make better and stronger demands for democratic action.

WORLDPOST: China's autocratic system with meritocratic qualities seems more able to solve the "collective decision" problem. It is able to mobilize consensus, unity of purpose and the long-term implementation of empowering policies.

Indian democracy seems captured by the short-term horizon of voters -- and the related "competitive populism" of politics, as well as what Fukuyama calls "vetocracy" -- the ability of organized special interests (whether the gold and diamond lobbies in India to the gun or financial lobby in the U.S. to public unions everywhere) to block change in the status quo in order to protect their spoils.

In India, in particular, competitive populism favors immediate subsidies over long-term investment in human and capital infrastructure. As you point out, government subsidies for fuel and fertilizer are four times more than the entire health budget.

India's problem is also a problem for many democracies -- including, for example, the U.S. or Italy. Both have an inability to reach consensus for investing in the future because they are captured by the short-term mentality and the vetocracy. They are stalled in gridlock.

How do we overcome this deficiency of democratic practice?

SEN: The problem is not primarily that of the dominance of short run priority, even though it is one part of a much larger story. The most important problem is that the regime of inequality. Increasing subsidies is strongly supported -- explicitly or by implication -- by the powerful voices of the beneficiaries of subsidies, who are typically relatively better off. They can benefit from subsidized electricity because they have power connections; many of them have motor cars and other instruments that can be run on subsidized diesel. They have the opportunity to benefit from the subsidies that absorb so much of public money.

The media discussion has not been probing enough to bring out the fact that a recently introduced food security bill, which will help many of the poor (India has one of the highest rates of undernourishment in the world), and which have been much criticized in media discussion for being "profligate," will need considerably less public money than India spends on providing cheap electricity to those who are privileged in having power connections. The delivery of food subsidy will certainly need careful scrutiny -- it runs very efficiently in many states (from Tamil Nadu to Chhattisgarh) and very badly in others. So there are important issues of efficiency that stand side-by-side with priorities of equity.

"The relatively rich are very fluent in defending the subsidies from which they themselves benefit, and also in criticizing the spending of public money -– on the grounds of 'unaffordability' and 'profligacy' -- for the lives and consumption of the more deprived. "

A similar point can be made about the absence of duties in India on the import of gold and precious metals, which are consumed primarily by the rich, and on which taxes could have greatly benefited the public exchequer. Gold import is also a big part of the reasons behind India’s trade deficit and of the fall of the rupee. And yet even small attempts by the government to put taxes on these imports have had to be abandoned because of the vocal protests from the interest groups that benefit from the absence of duties on these imports.

The relatively rich are very fluent in defending the subsidies from which they themselves benefit, and also in criticizing the spending of public money -– on the grounds of “unaffordability” and “profligacy” -- for the lives and consumption of the more deprived. This is where the vigor of really democratic practice can make a huge difference. Rather than longing for socially committed authoritarianism, which may work better and more speedily when it works, but which has an inescapable fragility that all authoritarian systems have. India has every reason to try to secure a more equitable and more far-sighted set of public policies through better use of democratic agitation and more generally public sharing of real information –- not just propaganda.

Rather than chucking the baby with the bath water, India can both keep the baby and get rid of the bath water. As B.R. Ambedkar, one of the architects of the India’s democratic constitution, said, India’s democracy will work well when the political process make use of people’s democratic freedoms to “educate, agitate and organize.” A clear-headed understanding of what is needed in India is extremely important for the success of India’s democracy.

Also on HuffPost:

Arvind Kejriwal Protests In New Delhi
Share this
Current Slide

Suggest a correction

Around the Web

Dalai Lama Asks China to Learn From India

The Upside of Down by Charles Kenny

Raghuram Rajan: the new face of India's economy