by Sen, Amartya
INTERCONNECTIONS AND COMPLEMENTARITY
These instrumental freedoms directly enhance the capabilities of people, but they also supplement one another, and can furthermore reinforce one another. These interlinkages are particularly important to seize in considering development policies.
The fact that the entitlement to economic transactions tends to be typically a great engine of economic growth has been widely accepted. But many other connections remain underrecognized, and they have to be seized more fully in policy analysis. Economic growth can help not only in raising private incomes but also in making it possible for the state to finance social insurance and active public intervention. Thus the contribution of economic growth has to be judged not merely by the increase in private incomes, but also by the expansion of social services (including, in many cases, social safety nets) that economic growth may make possible.3
Similarly, the creation of social opportunities, through such services as public education, health care, and the development of a free and energetic press, can contribute both to economic development and to significant reductions in mortality rates. Reduction of mortality rates, in turn, can help to reduce birth rates, reinforcing the influence of basic education—especially female literacy and schooling—on fertility behavior.
The pioneering example of enhancing economic growth through social opportunity, especially in basic education, is of course Japan. It is sometimes forgotten that Japan had a higher rate of literacy than Europe had even at the time of the Meiji restoration in the mid-nineteenth century, when industrialization had not yet occurred there but had gone on for many decades in Europe. Japan’s economic development was clearly much helped by the human resource development related to the social opportunities that were generated. The so-called East Asian miracle involving other countries in East Asia was, to a great extent, based on similar causal connections.4
This approach goes against—and to a great extent undermines—the belief that has been so dominant in many policy circles that “human development” (as the process of expanding education, health care and other conditions of human life is often called) is really a kind of luxury that only richer countries can afford. Perhaps the most important impact of the type of success that the East Asian economies, beginning with Japan, have had is the total undermining of that implicit prejudice. These economies went comparatively early for massive expansion of education, and later also of health care, and this they did, in many cases, before they broke the restraints of general poverty. And they have reaped as they have sown. Indeed, as Hiromitsu Ishi has pointed out, the priority to human resource development applies particularly to the early history of Japanese economic development, beginning with the Meiji era (1868–1911), and that focus has not intensified with economic affluence as Japan has grown richer and much more opulent.5
DIFFERENT ASPECTS OF CHINA-INDIA CONTRAST
The central role of individual freedoms in the process of development makes it particularly important to examine their determinants. Substantial attention has to be paid to the social influences, including state actions, that help to determine the nature and reach of individual freedoms. Social arrangements may be decisively important in securing and expanding the freedom of the individual. Individual freedoms are influenced, on one side, by the social safeguarding of liberties, tolerance, and the possibility of exchange and transactions. They are also influenced, on the other side, by substantive public support in the provision of those facilities (such as basic health care or essential education) that are crucial for the formation and use of human capabilities. There is need to pay attention to both types of determinants of individual freedoms.
The contrast between India and China has some illustrative importance in this context. The governments of both China and India have been making efforts for some time now (China from 1979 and India from 1991) to move toward a more open, internationally active, market-oriented economy. While Indian efforts have slowly met with some success, the kind of massive results that China has seen has failed to occur in India. An important factor in this contrast lies in the fact that from the standpoint of social preparedness, China is a great deal ahead of India in being able to make use of the market economy.6 While pre-reform China was deeply skeptical of markets, it was not skeptical of basic education and widely shared health care. When China turned to marketization in 1979, it already had a highly literate people, especially the young, with good schooling facilities across the bulk of the country. In this respect, China was not very far from the basic educational situation in South Korea or Taiwan, where too an educated population had played a major role in seizing the economic opportunities offered by a supportive market system. In contrast, India had a half-illiterate adult population when it turned to marketization in 1991, and the situation is not much improved today.
The health conditions in China were also much better than in India because of the social commitment of the pre-reform regime to health care as well as education. Oddly enough, that commitment, while totally unrelated to its helpful role in market-oriented economic growth, created social opportunities that could be brought into dynamic use after the country moved toward marketization. The social backwardness of India, with its elitist concentration on higher education and massive negligence of school education, and its substantial neglect of basic health care, left that country poorly prepared for a widely shared economic expansion. The contrast between India and China does, of course, have many other aspects (including the differences in their respective political systems, and the much greater variation within India of social opportunities such as literacy and health care); these issues will be addressed later. But the relevance of the radically different levels of social preparedness in China and India for widespread market-oriented development is worth noting even at this preliminary stage of the analysis.
It must, however, also be noted that there are real handicaps that China experiences compared with India because it lacks democratic freedoms. This is particularly so when it comes to flexibility of economic policy and the responsiveness of public action to social crisis and unforeseen disasters. The most prominent contrast lies perhaps in the fact that China has had what is almost certainly the largest recorded famine in history (when thirty million people died in the famine that followed the failure of the Great Leap Forward in 1958–1961), whereas India has not had a famine since independence in 1947. When things go well, the protective power of democracy may be less missed, but dangers can lie round the corner (as indeed the recent experiences of some of the East Asian and Southeast Asian economies bring out). This issue too will have to be discussed more fully later on in this book.
There are very many different interconnections between distinct instrumental freedoms. Their respective roles and their specific influences on one another are important aspects of the process of development. In the chapters to follow, there will be opportunities to discuss a number of these interconnections and their extensive reach. However, to illustrate how these interconnections work, let me here go a little into the diverse influences on longevity and life expectancy at birth—capabilities that people value almost universally.
GROWTH-MEDIATED SOCIAL ARRANGEMENTS
The impact of social arrangements on the freedom to survive can be very strong and may be influenced by quite different instrumental connections. The point is sometimes made that this is not a separate consideration from economic growth (in the form of raising the level of per capita income) since there is a close relation between income per head and longevity. Indeed, it has been argued that it is a mistake to worry about the discord between income achievements and survival chances, since—in general—the statistical connection between them is observed to be quite close. As a point about intercountry statistical connections, seen in isolation, this is indeed correct, but this statistical relation needs further scrutiny before it can be seen as a convincing ground for dismissing the relevance of social arrangements (going beyond income-based opulence).<
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It is interesting, in this context, to refer to some statistical analyses that have recently been presented by Sudhir Anand and Martin Ravallion.7 On the basis of intercountry comparisons, they find that life expectancy does indeed have a significantly positive correlation with GNP per head, but that this relationship works mainly through the impact of GNP on (1) the incomes specifically of the poor and (2) public expenditure particularly in health care. In fact, once these two variables are included on their own in the statistical exercise, little extra explanation can be obtained from including GNP per head as an additional causal influence. Indeed, with poverty and public expenditure on health as explanatory variables on their own, the connection between GNP per head and life expectancy appears (in the Anand-Ravallion analysis) to vanish altogether.
It is important to emphasize that this result, if vindicated by other empirical studies as well, would not show that life expectancy is not enhanced by the growth of GNP per head, but it would indicate that the connection tends to work particularly through public expenditure on health care, and through the success of poverty removal. The basic point is that the impact of economic growth depends much on how the fruits of economic growth are used. This also helps to explain why some economies, such as South Korea and Taiwan, have been able to raise life expectancy so rapidly through economic growth.
The achievements of the East Asian economies have come under critical scrutiny—and some fire—in recent years, partly because of the nature and severity of what is called “the Asian economic crisis.” That crisis is indeed serious, and points to particular failures of economies that were earlier seen—mistakenly—as being comprehensively successful. I shall have the opportunity of considering the special problems and specific failures involved in the Asian economic crisis (particularly in chapters 6 and 7). But it would be an error not to see the great achievements of the East Asian and Southeast Asian economies over several decades, which have transformed the lives and longevities of people in the countries involved. The problems that these countries now face (and have potentially harbored for a long time), which demand attention (including the overall need for political freedoms and open participation as well as for protective security), should not induce us to ignore these countries’ achievements in the fields in which they have done remarkably well.
For a variety of historical reasons, including a focus on basic education and basic health care, and early completion of effective land reforms, widespread economic participation was easier to achieve in many of the East Asian and Southeast Asian economies in a way it has not been possible in, say, Brazil or India or Pakistan, where the creation of social opportunities has been much slower and that slowness has acted as a barrier to economic development.8 The expansion of social opportunities has served to facilitate high-employment economic development and has also created favorable circumstances for reduction of mortality rates and for expansion of life expectancy. The contrast is sharp with some other high-growth countries—such as Brazil—which have had almost comparable growth of GNP per head, but also have quite a history of severe social inequality, unemployment and neglect of public health care. The longevity achievements of these other high-growth economies have moved more slowly.
There are two interesting—and interrelated—contrasts here:
1) for high economic growth economies, the contrast between:
1.1) those with great success in raising the length and quality of life (such as South Korea and Taiwan), and
1.2) those without comparable success in these other fields (such as Brazil);
2) for economies with high success in raising the length and quality of life, the contrast between:
2.1) those with great success in high economic growth (such as South Korea and Taiwan), and
2.2) those without much success in achieving high economic growth (such as Sri Lanka, pre-reform China, the Indian state of Kerala).
I have already commented on the first contrast (between, say, South Korea and Brazil), but the second contrast too deserves policy attention. In our book Hunger and Public Action, Jean Drèze and I have distinguished between two types of success in the rapid reduction of mortality, which we called respectively “growth-mediated” and “support-led” processes.9 The former process works through fast economic growth, and its success depends on the growth process being wide-based and economically broad (strong employment orientation has much to do with this), and also on utilization of the enhanced economic prosperity to expand the relevant social services, including health care, education and social security. In contrast with the growth-mediated mechanism, the support-led process does not operate through fast economic growth, but works through a program of skillful social support of health care, education and other relevant social arrangements. This process is well exemplified by the experiences of economies such as Sri Lanka, pre-reform China, Costa Rica or Kerala, which have had very rapid reductions in mortality rates and enhancement of living conditions, without much economic growth.
PUBLIC PROVISIONING, LOW INCOMES AND RELATIVE COSTS
The support-led process does not wait for dramatic increases in per capita levels of real income, and it works through priority being given to providing social services (particularly health care and basic education) that reduce mortality and enhance the quality of life. Some examples of this relationship are shown in figure 2.1, which presents the GNP per head and life expectancy at birth of six countries (China, Sri Lanka, Namibia, Brazil, South Africa and Gabon) and one sizable state (Kerala) with thirty million people, within a country (India).10 Despite their very low levels of income, the people of Kerala, or China, or Sri Lanka enjoy enormously higher levels of life expectancy than do much richer populations of Brazil, South Africa and Namibia, not to mention Gabon. Even the direction of the inequality points opposite when we compare Kerala, China and Sri Lanka, on one side, with Brazil, South Africa, Namibia and Gabon, on the other. Since life expectancy variations relate to a variety of social opportunities that are central to development (including epidemiological policies, health care, educational facilities and so on), an income-centered view is in serious need of supplementation, in order to have a fuller understanding of the process of development.11 These contrasts are of considerable policy relevance, and bring out the importance of the support-led process.12
FIGURE 2.1: GNP per Capita (U.S. Dollars) and Life Expectancy at Birth, 1994
Sources: Country data, 1994, World Bank, World Development Report 1996; Kerala data, Life expectancy, 1989–1993, Sample Registration System cited in Government of India (1997), Department of Education, Women in India: A Statistical Profile; Domestic product per capita, 1992–1993, Government of India (1997), Ministry of Finance, Economic Survey 1996–1997.
Surprise may well be expressed about the possibility of financing support-led processes in poor countries, since resources are surely needed to expand public services, including health care and education. In fact, the need for resources is frequently presented as an argument for postponing socially important investments until a country is already richer. Where (as the famous rhetorical question goes) are the poor countries going to find the means for “supporting” these services? This is indeed a good question, but it also has a good answer, which lies very considerably in the economics of relative costs. The viability of this support-led process is dependent on the fact that the relevant social services (such as health care and basic education) are very labor intensive, and thus are relatively inexpensive in poor—and low-wage—economies. A poor economy may have less money to spend on health care and education, but it also needs less money to spend to provide the same services, which would cost much more in the richer countries. Relative prices and costs are important parameters in determining what a country can afford. Given an appropriate social commitment, the need to take note of the variability of relative costs is particularly important for social services in health and education.13
It is obvious that the growth-mediated process has
an advantage over its support-led alternative; it may, ultimately, offer more, since there are more deprivations—other than premature mortality, or high morbidity, or illiteracy—that are very directly connected with the lowness of incomes (such as being inadequately clothed and sheltered). It is clearly better to have high income as well as high longevity (and other standard indicators of quality of life), rather than only the latter. This is a point worth emphasizing, since there is some danger of being “overconvinced” by the statistics of life expectancy and other such basic indicators of quality of life.
For example, the fact that the Indian state of Kerala has achieved impressively high life expectancy, low fertility, high literacy and so on despite its low income level per head is certainly an achievement worth celebrating and learning from. And yet the question remains as to why Kerala has not been able to build on its successes in human development to raise its income levels as well, which would have made its success more complete; it can scarcely serve as a “model” case, as some have tried to claim. From a policy point of view, this requires a critical scrutiny of Kerala’s economic policies regarding incentives and investments (“economic facilities,” in general), despite its unusual success in raising life expectancy and the quality of life.14 Support-led success does, in this sense, remain shorter in achievement than growth-mediated success, where the increase in economic opulence and the enhancement of quality of life tend to move together.