Abject poverty has, in the past, led to feuds over food and water. The debate over poverty alleviation has, however, pitched academics of great repute against each other, thus shifting the focus from poverty to those who profess about it.

The debate over what caused poverty to decline in India has generated much heat between the Nobel Laureate Amartya Sen, professor of economics at Harvard University, and Professor Jagdish Bhagwati of Columbia University. The debate has mostly been framed by Professor Bhagwati who claims that poverty reduction in India was a direct result of pro-economic growth policies. He further accuses Professor Sen of opposing economic growth in favour of redistribution of wealth. Professor Sen rejects the accusation of being anti-growth, but also insists that educated and healthy workforce is a prerequisite for growth and not necessarily its outcome.

Studying and researching the poor has always been a lucrative enterprise. Countless academics, NGOs, and bureaucrats have found great riches in studying poverty. Conferences on poverty alleviation are usually held at exotic locations in five-star hotels. Celebrity academics are flown first-class to attend such academic rendezvous where great debates are held over the theory and practice of poverty alleviation. In the meanwhile, the academics get tenured and the bureaucrats get promoted, while the poor remain mostly poor.

I recently reviewed Professor Bhagwati’s co-authored book: Why Growth Matters: How economic growth in India reduced poverty and the lessons for other developing countries. Professor Bhagwati and his co-author build a huge pro-growth argument and cite Gujarat as a successful model of economic growth and poverty alleviation while they dismiss Kerala’s human development model. In the development world, Kerala has been a poster child for successful, distribution-focused policies that resulted in improved human development indicators. Gujarat, on the other hand, is the darling of the ‘India Shining’ crowd who believes that Narinder Modi led growth-focused policies have been instrumental in improving human development indicators in Gujarat.

I find Professor Bhagwati’s book to be overly critical, at times distracted, and often reductionist. First, the authors sound unnecessarily bitter when they critique the past works of other economists who have disagreed with the authors, such as Amartya Sen, Joseph Stiglitz, and Mahboob-ul Haq. Repeatedly, and with some disdain, they refer to Dr. Haq as the ‘Pakistani economist’. They do not identify other economists with a national prefix. Why Professor Bhagwati and his co-author felt the need to identify Dr. Haq as a Pakistani economist, is subject to speculation. They may have thought it to be sufficient to discredit Dr. Haq by pointing to his Pakistani origin.

While being unnecessarily critical, the book at times seems distracted. For instance, the authors embark on a critique of the American President Obama for using speech writers and a teleprompter. Professor Bhagwati and his co-author hasten to praise Pundit Nehru and Winston Churchill for writing their own speeches that they also delivered eloquently. I, for one, failed to understand how all this was relevant to the matter at hand.

I am, however, most concerned about the reductionism that characterises several arguments forwarded by the authors who rely on correlations between two variables and then arbitrarily assume causation. Even a bigger problem is the way they have presented numbers to support their argument. Consider Figure 5.7 on page 75 (see below) where they compare literacy rates among Gujarat, Kerala, Maharashtra and India.

A quick glance of the following figure may suggest that 30 years later, the literacy rate was similar for Kerala and Gujarat. However, a closer look will reveal that 78.9 per cent literacy rate for Kerala is for 1981 and 79.3 per cent literacy rate for Gujarat is reported for 2011. Since Kerala’s literacy rate in 1981 at 78.9 percent was much higher than that of Gujarat at 44.9 per cent, the authors felt the need to debase the graph to show the change in literacy rates from similar base starting points. The resulting picture, however, is misleading, despite the good intensions of the authors.

Source: Why Growth Matters: How economic growth in India reduced poverty and the lessons for other developing countries

Yet even a bigger concern is about the reductionism of the myth-busting argumentative style adopted by Professor Bhagwati and his co-author who forcefully argue for the Gujarat model against the Kerala model. The debate about human development in fact is much more nuanced than what the authors would like us to believe. Take the literacy rates for example in Gujarat and Kerala as reported in the Census. A bigger concern about inter-census change in literacy rates is about the change in demographics resulting from inter-state migration. Let me explain this rather nuanced argument in the following paragraphs.

According to the Indian Census, Kerala’s literate population (seven years or older) increased from 25.49 million in 2001 to 28.14 million in 2011. During the same period, the urban population in Kerala nearly doubled accompanied by a significant decline in rural population. These numbers are indicative of rapid urbanisation with a modest population growth rate. At the same time, Gujarat experienced a 46 per cent increase in urban literate population of seven years or older and a 31 per cent increase in rural literate population. Gujarat represents high population growth rates during the two census years brought about by a natural increase in population and perhaps some by Inter-state migration. The real question to answer is how much of the 12.9 per cent increase in literacy rate in Gujarat is supported by in-migration of skilled and educated labour from other States?

Source: Indian Census

Research has shown that almost 40 million people in India moved from one State to another during 1991 and 2001. Eighty per cent of all interstate migrants during 1991 and 2001 settled in Maharashtra, Gujarat, and Haryana. It is likely that a similarly large number of interstate migrants would have settled in Gujarat during 2001 and 2011. Can one attribute change in literacy rates in Gujarat to the domestic education policy or to the influx of interstate in-migrants? At the same time, it is quite possible that if the in-migrants were poorly educated, they contributed to lower than otherwise high literacy rates. In the absence of a more detailed analysis, cross sections of the data may not be sufficient to draw conclusions.

Professor Bhagwati and his co-author claim that Gujarat may be the model for other developing countries. It may very well be. However, the devil is in the details. It may take a decade or more to determine if Gujarat is truly an economic miracle or just hype.

Updated Sep 05, 2013 03:50pm

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Comments (24) (Closed)

Sep 05, 2013 06:13pm

Great review, Im going to use it in my class on economic development this morning!

Sep 05, 2013 06:15pm

That picture is incredibly sad.

Saram Bokhari
Sep 05, 2013 09:18pm

For an average reader I think it is important to define the scope of each economists work. Would an average person know Sen's capability approach or Bhagwati's work. I do not understand if this is a book review or a way to castigate Bhagwati who has called Dr Haq a Pakistani. I feel the author is doing the same. Please dumb down these articles so a regular person can differentiate between the nuances of such works, which require years of empirical research

Sep 05, 2013 09:53pm

how can i help the kids in the above pic??...

Sep 05, 2013 11:33pm

Never mind, you even spelt Mahbub wrong, so you weren't being disdainful towards Modi by calling him a Punjabi name instead of his Gujarati name ;)

Sep 05, 2013 11:35pm

I don't want to read the article , I just read it see towards pic, what a pic.awesome

Sep 06, 2013 12:18am

We need people like you advising on economic and health affairs! Great work as always!

Sep 06, 2013 12:53am

Great Article on reality of politics, academics and poverty.

Sep 06, 2013 03:57am

Sorry, I don't see why the literacy rates chart is "misleading". It is clearly comparing literacy rates for the different states for year 0 to year 30, and stating what that base case, year 0, is for each of the states. What is misleading about that?

I am guessing that the point they're trying to make is that all states see a similar rate of growth in literacy (give or take 5%), so if you now look at Kerala in 2011 (which is year 60) that would help you extrapolate for the other states (and this makes sense intuitively as Kerala has the highest literacy in India).

If you were trying to do an absolute comparison of the states, you'd use years as the x axis, but I doubt that is what they were trying to do.

Have you criticised the book just to write an article for the Dawn?

Ravi Ingale from Pune
Sep 06, 2013 10:04am

Murtaz Ahmed not interested in his country's problem. Pakistan has nothing to do with these India's problem. it is better for Pakistan that they will think about their own problem like energy crisis, drone attacks, Educations, terrorist activity that will progress their life style. Stop thinking about India. India have capability to solve their problem. India is the third richest country in the World after Japan, China and US, in spite of Poverty and corruption. What happened if these problem will vanish??

Sanjeev Yadav
Sep 06, 2013 11:55am

The picture of these kids is heart breaking.

Sep 06, 2013 12:34pm

A well researched article which makes valid arguments. Well done

Sep 06, 2013 01:55pm

Unfortunately India has wasted the last 66 years in useless debates and arguments. Now there is a new one between Bhagwati and Sen, both ivory tower economists. India's policy makers, including PM, are all trained economists but India is now in an even greater mess. Whatever systems India has followed in last 66 years have failed to produce any good results. The time has now come to discard all ideologies viz. socialism, capitalism, free-market, government control over economy and just follow plain common-sense.

Ajay Sharma
Sep 06, 2013 04:16pm

Here are my two cents :

Kerala thirves on remittances of its citizens settled in Gulf; So whatever it has achieved is not because of its economic model but because of remittances. Kerala will be in a bad shape without those Dr Sen won the nobel prize in econ, but nowadays he speaks mostly philosophy and politics; Coming from a nobel laureate people think it as economic wisdom; he needs to specify whether he is speaking as an economist or as a philosopher Dr Bhagwati is frustrated; All along since the 80s everyone used to think he was in line for nobel prize- but it ended up gong to dr Sen- his wrtings /speeches show that bitterness

Sep 06, 2013 04:25pm

looking at the top pic i could only beg my Lord to give me and my fellow citizens the strength and the resources, so I could do at least something to put them out of their miseries. Ameen

Sep 06, 2013 07:54pm

I find your comment regarding the Mr Haq being referred to as a Pakistani economist being disdainful a bit silly. If the word “Pakistani” is not a derogatory term, how can its use imply disdain? I think you perceive it to be disdainful because in your MIND Indians hate Pakistanis.

As a Pakistani, you should be proud that a Pakistani economist is being given the due recognition, especially as Mahboob ul Haq could easily be an Indian name.

In this very article you say that Bhagwati is being tangential by talking about Obama, Churchill and Nehru. Then you go on to talk about the inappropriateness of calling a Pakistani economist Pakistani in what you claim is a book review. In my opinion, you're being just as tangential here.

Also, the correct spelling is Narendra, not Narinder. One is a Gujarati name and the other is Punjabi. Since we're talking about the Gujarat model, might as well get the name right :)

Indian Nari
Sep 06, 2013 08:27pm

Your interest in Indian economics is astonishing. But there is a strong doubt on credibility of any of your researches after one reads a previous blog on 'Aakash' tablet in which you have denied any credit to India. One simply has to google 'Aakash' to get the facts right. Literacy level is up all across India and the problem today is to find equal employment generation to absorb all these millions of semi-skilled semi-literate labour force in the country.

Sep 06, 2013 09:59pm

This picture is really heart heartbreaking picture this boy sleeping look like my own son,they day rulers of this country start considering these orphan children as their own then life of these children would change and that's not going to happen with these rulers and their political system.The boy who holding baby is doing better job then our government who should be providing food,shelter,security and education to their citizen.In Pakistan individuals and people like Edhi are doing job of state providing food and shelter to homeless.On the day of judgment these rulers will be ask about their citizen but look like our ruler don't believe in day of judgment.We need system and leader like Caliph Umar Al-Khattab R.A when he saw children like these children crying made sure they have food and deliver food to them .

Sep 06, 2013 10:23pm


You're joking, right? The academic bit is clearly lacking. And the politics bit is questionable. I think it's bad politics for an educated person like the author to suggest that an Indian referring to a Pakistani person as a Pakistani person is an insult.

Sep 06, 2013 11:08pm

Without any value judgement,I would like to say that I have lived in both States i.e. Kerala & Gujarat at. I would like to settle down in Gujarat, if it improves its school education & I would only like to go to Kerala for tourism,rest everything is pathetic there.

Experience it Mr. Haider living 2-3months in both places, then you would yourself like to review your specious arguement.

bikram singh
Sep 06, 2013 11:35pm

@sara: that pic is of a hindu child and if, still, you wanna help them then be careful as i doubt that people like zaid hamid may declare you as anti pakistani.

Sep 07, 2013 09:48am

India does not follow any thery of economics, only vote politics

Sep 07, 2013 09:56am

@sara: by helping others like them around you....

Sep 07, 2013 11:56am

@Ravi Ingale from Pune: I dont think any of our economists have done what Mr. Haider has done. Why not be happy that Mr. Haider has taken pains to write which definitely is a food for thought. who told you that India is the 3rd(4th) richest country? If you think Mr. Haider should mind his own business in Pakistan, then what business you have to poke your nose in a pakistani newspaper. please enjoy pune's garden vadapav and relax. Happy Ganesh chaturthi.