by Sen, Amartya
34. James D. Wolfensohn, “A Proposal for Comprehensive Development Framework,” mimeographed, World Bank, 1999. See also Joseph E. Stiglitz, “An Agenda for Development in the Twenty-First Century,” in Annual World Bank Conference on Development Economics 1997, edited by B. Pleskovi and J. E. Stiglitz (Washington, D.C.: World Bank, 1998).
35. On this see chapters 1–4 above; also Amartya Sen and James D. Wolfensohn, “Let’s Respect Both Sides of the Development Coin,” International Herald Tribune, May 5, 1999.
36. On this see Jean Drèze and Amartya Sen, India: Economic Development and Social Opportunity (Delhi: Oxford University Press, 1995). See also my “How Is India Doing?” New York Review of Books 21 (Christmas number, 1982), reprinted in Social and Economic Development in India: A Reassessment, edited by D. K. Basu and R. Sissons (London: Sage, 1986).
37. In this context see Isher Judge Ahluwalia and I.M.D. Little, eds., India’s Economic Reforms and Development: Essays for Manmohan Singh (Delhi: Oxford University Press, 1998). See also Vijay Joshi and I.M.D. Little, India’s Economic Reforms, 1991–2001 (Delhi: Oxford University Press, 1996).
38. See the classic analysis of “market failure” in the presence of public goods in Paul A. Samuelson, “The Pure Theory of Public Expenditure,” Review of Economics and Statistics 36 (1954), and “Diagrammatic Exposition of a Pure Theory Public Expenditure,” Review of Economics and Statistics 37 (1955). See also Kenneth J. Arrow, “The Organization of Economic Activity: Issues Pertinent to the Choice of Market versus Non-market Allocation,” in Collected Papers of K. J. Arrow, volume 2 (Cambridge, Mass.: Harvard University Press, 1983).
39. The nature of uncertainty in health is a further issue that makes market allocation problematic in the field of medicine and health care, on which see Kenneth J. Arrow, “Uncertainty and the Welfare Economics of Health Care,” American Economic Review 53 (1963). The comparative merits of public action in the field of health care have much to do with the issues identified by Arrow as well as Samuelson (see the preceding note); on this see Jean Drèze and Amartya Sen, Hunger and Public Action (Oxford: Clarendon Press, 1989). See also Judith Tendler, Good Government in the Tropics (Baltimore: Johns Hopkins University Press, 1997).
40. The literature on this is quite vast, and while some contributions have concentrated on institutional diversities needed to deal with the problem of public goods and related issues, others have concentrated on redefining “efficiency” after taking note of the costs of transaction and collusion. The need for institutional enhancement beyond the reliance only on traditional markets cannot, however, be escaped by redefinition, if the object is to go beyond achieving what the traditional markets can actually achieve. For an illuminating account of the various issues discussed in this vast literature, see Andreas Papandreou, Externality and Institutions (Oxford: Clarendon Press, 1994).
41. Smith, Wealth of Nations (1976 Campbell and Skinner edition), volume 1, book 2, p. 27, and volume 5, book 1, f, p. 785;
42. See my “Social Commitment and Democracy: The Demands of Equity and Financial Conservatism,” in Living as Equals, edited by Paul Barker (Oxford: Oxford University Press, 1996), and also “Human Development and Financial Conservatism,” keynote address at the International Conference on Financing Human Resource Development, arranged by the Asian Development Bank, on November 17, 1995, later published in World Development, 1998. The discussion that follows draws on these papers.
43. Undernourishment does, of course, have many complex aspects—on which see the papers included in S. R. Osmani, ed., Nutrition and Poverty (Oxford: Clarendon Press, 1992)—and some aspects of nutritional deprivation are more easily observed than others.
44. See the discussion of this issue in Jean Drèze and Amartya Sen, Hunger and Public Action (Oxford: Clarendon Press, 1989), chapter 7 (particularly pp. 109–13). The empirical observations come from T. Nash, “Report on Activities of the Child Feeding Centre in Korem,” mimeographed (London: Save the Children Fund, 1986), and J. Borton and J. Shoham, “Experiences of Non-governmental Organisations in Targeting of Emergency Food Aid,” mimeographed, report on a workshop held at the London School of Hygiene and Tropical Medicine, 1989.
45. On this see Drèze and Sen, Hunger and Public Action (1989). See also Timothy Besley and Stephen Coate, “Workfare versus Welfare: Incentive Arguments for Work Requirements in Poverty-Alleviation Programs,” American Economic Review 82 (1992); Joachim von Braun, Tesfaye Teklu and Patrick Webb, “The Targeting Aspects of Public Works Schemes: Experiences in Africa,” and Martin Ravallion and Gaurav Datt, “Is Targeting through a Work Requirement Efficient? Some Evidence from Rural India,” both published in Public Spending and the Poor: Theory and Evidence, edited by Dominique van de Walle and Kimberly Nead (Baltimore: Johns Hopkins University Press, 1995). See also Joachim von Braun, Tesfaye Teklu and Patrick Webb, Famine in Africa: Causes, Responses and Prevention (Baltimore: Johns Hopkins University Press, 1998).
46. It won’t help those who are too old, or too disabled, or too ill to work in that way, but as was mentioned earlier, such people can be easily identified in terms of these capability handicaps and supported through other—complementary—schemes. The possibility and actual experiences of such complementary programs were discussed in Drèze and Sen, Hunger and Public Action (1989).
47. On this see Sudhir Anand and Martin Ravallion, “Human Development in Poor Countries: Do Incomes Matter?” Journal of Economic Perspectives 7 (1993). See also Keith Griffin and John Knight, eds., Human Development and the International Development Strategy for the 1990s (London: Macmillan, 1990). In the specific context of famines, see also Alex de Waal, Famines That Kill: Darfur 1984–1985 (Oxford: Clarendon Press, 1989).
48. See my On Economic Inequality (1973), pp. 78–9.
49. These issues are discussed more fully in “The Political Economy of Targeting,” my keynote address to the 1992 Annual World Bank Conference on Development Economics, published in van de Walle and Nead, Public Spending and the Poor (1995). See also the other essays in that illuminating volume.
50. On the general problems underlying asymmetrical information, see George A. Akerlof, An Economic Theorist’s Book of Tales (Cambridge: Cambridge University Press, 1984).
51. See John Rawls, A Theory of Justice (Cambridge, Mass.: Harvard University Press, 1971), pp. 440–6. Rawls discusses how institutional arrangements and public policies can influence “the social bases of self-respect.”
52. See particularly William J. Wilson, The Truly Disadvantaged (Chicago: University of Chicago Press, 1987); Christopher Jencks and Paul E. Peterson, eds., The Urban Underclass (Washington, D.C.: Brookings Institution, 1991); Theda Skocpol, Protecting Soldiers and Mothers: The Politics of Social Provision in the United States, 1870–1920 (Cambridge, Mass.: Harvard University Press, 1991). I first encountered the argument (like many others) in a conversation with Terence (W. M.) Gorman at the London School of Economics around 1971, though I don’t believe he ever wrote on this.
53. Michael Bruno, “Inflation, Growth and Monetary Control: Non-linear Lessons from Crisis and Recovery,” Paolo Baffi Lecture (Rome: Bank of Italy, 1996). See also his Crisis, Stabilization, and Economic Reform (Oxford: Clarendon Press, 1993).
54. Bruno, “Inflation, Growth and Monetary Control,” pp. 7–8.
55. Bruno, “Inflation, Growth and Monetary Control,” pp. 8, 56.
56. Bruno, “Inflation, Growth and Monetary Control,” p. 9.
57. Even though the World Bank was rather slow in recognizing the role of the state in East Asian economic success, it did eventually acknowledge the importance of the states’ particular roles in promoting the expansion of education and human resources; see World Bank, The East Asian Miracle: Economic Growth and Public Policy (New York: Oxford University Press, 1993). See also the Asian Development Bank, Emerging Asia: Changes and Challenges (Manila: Asian Development Bank, 1997), and Nancy Birdsall, Carol Graham and Richard H. Sabot, Beyond Trade-offs: Market Reforms and Equitable
Growth in Latin America (Washington, D.C.: Inter-American Development Bank, 1998).
58. See Hiromitsu Ishi, “Trends in the Allocation of Public Expenditure in Light of Human Resource Development—Overview in Japan” (Asian Development Bank, 1995).
59. The nature of this connection was discussed in Drèze and Sen, Hunger and Public Action (1989). See also the analysis presented in World Bank, The East Asian Miracle (1993), and the extensive list of empirical references cited there. Also see the papers presented at the International Conference on Financing Human Resource Development, arranged by the Asian Development Bank, on November 17, 1995; many of the papers have been published in World Development, 1998. Fine analyses of contrasting experiences can be found in Nancy Birdsall and Richard H. Sabot, Opportunity Forgone: Education, Growth and Inequality in Brazil (Washington, D.C.: World Bank, 1993); James W. McGuire, “Development Policy and Its Determinants in East Asia and Latin America,” Journal of Public Policy (1994).
60. On this see Jere R. Behrman and Anil B. Deolalikar, “Health and Nutrition,” in Handbook of Development Economics, edited by H. B. Chenery and T. N. Srinivasan (Amsterdam: North-Holland, 1988).
61. However, because of the impossible burden of international debt, some countries, especially in Africa, may not be able to exercise much choice at all in determining their fiscal priorities. On this issue the need for “visionary” international policy as a part of “realistic” economic possibilities is forcefully advocated by Jeffrey D. Sachs, “Release the Poorest Countries from Debt Bondage,” International Herald Tribune, June 12–13, 1999.
62. On this, see UNDP, Human Development Report 1994.
Chapter 6: The Importance of Democracy
1. The first part of this chapter draws much on my paper “Freedoms and Needs,” New Republic, January 10 & 17, 1994.
2. Quoted in John F. Cooper, “Peking’s Post-Tiananmen Foreign Policy: The Human Rights Factor,” Issues and Studies 30 (October 1994), p. 69; see also Joanne Bauer and Daniel A. Bell, eds., The East Asian Challenge for Human Rights (Cambridge: Cambridge University Press, 1999).
3. The analysis presented here and the discussions that follow draw on my earlier papers “Freedoms and Needs” (1994); “Legal Rights and Moral Rights: Old Questions and New Problems,” Ratio Juris 9 (June 1996); and “Human Rights and Asian Values,” Morgenthau Memorial Lecture (New York: Carnegie Council on Ethics and International Affairs, 1997), published in a shortened form in The New Republic, July 14 & 21, 1997.
4. See, among other studies, Adam Przeworski et al., Sustainable Democracy (Cambridge: Cambridge University Press, 1995); Robert J. Barro, Getting It Right: Markets and Choices in a Free Society (Cambridge, Mass.: MIT Press, 1996). See also Robert J. Barro and Jong-Wha Lee, “Losers and Winners in Economic Growth,” Working Paper 4341, National Bureau of Economic Research (1993); Partha Dasgupta, An Inquiry into Well-Being and Destitution (Oxford: Clarendon Press, 1993); John Helliwell, “Empirical Linkages between Democracy and Economic Growth,” Working Paper 4066, National Bureau of Economic Research (1994); Surjit Bhalla, “Freedom and Economic Growth: A Vicious Circle?” presented at the Nobel Symposium in Uppsala on “Democracy’s Victory and Crisis,” August 1994; Adam Przeworski and Fernando Limongi, “Democracy and Development,” presented at the Nobel Symposium in Uppsala cited above.
5. On this see also my joint study with Jean Drèze, Hunger and Public Action (Oxford: Clarendon Press, 1989), part 3.
6. On this see my “Development: Which Way Now?” Economic Journal 93 (December 1983) and Resources, Values and Development (Cambridge, Mass.: Harvard University Press, 1984; 1997).
7. It could be argued that at the time of the Irish famines in the 1840s, Ireland was part of the United Kingdom, rather than a colony. However, not only was there a great cultural gulf between the Irish population and the English rulers, with deep English skepticism of the Irish (going back at least to the sixteenth century—well reflected in Edmund Spenser’s sharp-tongued The Faerie Queene), but also the division of political powers was extremely uneven. For the purpose of the point at issue, Ireland was governed in a way not unlike the colonies ruled by alien governors. On this see Cecil Woodham-Smith, The Great Hunger: Ireland 1845–1849 (London: Hamish Hamilton, 1962). Indeed, as Joel Mokyr has noted, “Ireland was considered by Britain as an alien and even hostile nation” (Why Ireland Starved: A Quantitative and Analytical History of the Irish Economy, 1800–1850 [London: Allen & Unwin, 1983], p. 291).
8. Fidel Valdez Ramos, “Democracy and the East Asian Crisis,” inaugural address at the Centre for Democratic Institutions, Australian National University, Canberra, November 26, 1998, p. 2.
9. An important factor is the reach of deliberative politics and of the utilization of moral arguments in public debates. On these issues, see Jürgen Haberman, “Three Normative Models of Democracy,” Constellations 1 (1994); Seyla Benhabib, “Deliberative Rationality and Models of Democratic Legitimacy,” Constellations 1 (1994); James Bonham and William Rehg, eds., Deliberative Democracy (Cambridge, Mass.: MIT Press, 1997). See also James Fishkin, Democracy and Deliberation (New Haven, Conn.: Yale University Press, 1971); Ralf Dahrendorf, The Modern Social Contract (New York: Weidenfeld, 1988); Alan Hamlin and Phillip Pettit, eds., The Good Polity (Oxford: Blackwell, 1989); Cass Sunstein, The Partial Constitution (Cambridge, Mass.: Harvard University Press, 1993); Amy Gutman and Dennis Thompson, Democracy and Disagreement (Cambridge, Mass.: Harvard University Press, 1996).
10. This is discussed in Drèze and Sen, Hunger and Public Action (1989), pp. 193–7, 229–39.
11. It is also worth noting that the environmental challenges, when adequately grasped, raise some of the central issues of social choice and deliberative politics; see my “Environmental Evaluation and Social Choice: Contingent Valuation and the Market Analogy,” Japanese Economic Review 46 (1995).
Chapter 7: Famines and Other Crises
1. The first part of this chapter draws on my keynote address to the Inter-Parliamentary Union in the Italian Senate on the occasion of the World Food Summit in Rome, Italy, November 15, 1996. The analysis derives from my Poverty and Famines: An Essay on Entitlement and Deprivation (Oxford: Clarendon Press, 1981), and my joint study with Jean Drèze, Hunger and Public Action (Oxford: Clarendon Press, 1989).
2. For an exposition of “entitlement analysis” see my Poverty and Famines (1981), and also Drèze and Sen, Hunger and Public Action (1989); Drèze and Sen, eds., The Political Economy of Hunger (Oxford: Clarendon Press, 1990), and its shortened version, Drèze, Sen and Athar Hussain, The Political Economy of Hunger: Selected Essays (Oxford: Clarendon Press, 1995).
3. For examples of famines arising from different causes, with little or no reduction of food output and availability, see my Poverty and Famines (1981), chapters 6–9.
4. On this see my Poverty and Famines (1981). See also Meghnad Desai, “A General Theory of Poverty,” Indian Economic Review 19 (1984), and “The Economics of Famine,” in Famines, edited by G. A. Harrison (Oxford: Clarendon Press, 1988). See also Lucile F. Newman, ed., Hunger in History: Food Shortage, Poverty, and Deprivation (Oxford: Blackwell, 1990), and going further back, Peter Garnsey, Famine and Food Supply in the Graeco-Roman World (Cambridge: Cambridge University Press, 1988).
5. A major critical survey of the literature on famines can be found in Martin Ravallion, “Famines and Economics,” Journal of Economic Literature 35 (1997).
6. On this see my Poverty and Famines (1981), chapters 7 and 8.
7. The Bangladesh famine of 1974 is analyzed in my Poverty and Famines (1981), chapter 9, and also in Mohiuddin Alamgir, Famine in South Asia (Boston: Oelgeschlager, Gunn & Hain, 1980), and in Martin Ravallion, Markets and Famines (1987).
8. On this see Ravallion, Markets and Famines (1987).
9. The fact that Ireland was exporting food to England during the famines is sometimes cited as evidence that food output had not declined in Ireland. But that is an erroneous conclusion, both because we have di
rect evidence of a decline in Irish food output (associated with the potato epidemics), and because the movement of food is determined by relative prices, and not just by the size of food output in the exporting country. Indeed, “food countermovement” is a common phenomenon in a “slump famine” in which there is a general economic decline, which can make demand for food go down even more than the reduction of supply (on this and on related matters, see my Poverty and Famines [1981]). In the Chinese famines too, a much larger proportion of the reduced food output of rural China was being taken out into the urban areas as a result of official policy (on this see Carl Riskin, “Feeding China: The Experience since 1949,” in Drèze and Sen, The Political Economy of Hunger [1989]).
10. There were also other factors behind the differential mortality in the Bengal famine of 1943, including the governmental decision to shelter the urban population in Calcutta through food rationing, price control and fair-price shops, leaving the rural poor thoroughly unprotected. On these and other aspects of the Bengal famine, see my Poverty and Famines (1981), chapter 6.
11. It is not uncommon, in general, for the rural people to suffer more from famines than do the economically and politically more powerful urban population. Michael Lipton has analyzed the nature of the “urban bias” in a classic study: Why Poor People Stay Poor: A Study of Urban Bias in World Development (London: Temple Smith, 1977).
12. On this see Alamgir, Famine in South Asia (1980), and my Poverty and Famines (1981), chapter 9. The analyses of food prices (and other causal factors) are extensively explored by Martin Ravallion, in Markets and Famines (1987). Ravallion also shows how the rice market exaggerated the extent of the future decline of food supply in Bangladesh, making the anticipatory price rise a good deal steeper than it need have been.