According to the Ishaq Dar— Finance Minister of Pakistan—the budget for 20152016 is designed so Pakistan can ‘embark on the path of promoting inclusive growth’. On the other side of the border, electoral success of Narendra Modi in 2014 is based on economic success of ‘Gujarat Model’— ten percent growth rate for a decade. Further southeast, In Bangladesh, the major focus of the budget is to achieve at least seven percent growth rate.
Development as Freedom provides a broader understanding of development. Sen argues against the assertion that high growth rates will translate into development. Simply put, relationship between poverty, income, inequality, unemployment, mortality, quality of life should be looked through a broad definition of development rather than narrow definitions of utility, efficiency or growth rates. What is Sen’s broad definition of development? Freedom and Development.
The specific aims such as increase in income or better health or political liberties should not be the ‘ends’ of development but, together, all these should be “constituent” part of development. Development, Sen argues, is an overarching term which deals with enabling people to achieve freedom against the chains of malnutrition, illiteracy, poverty, starvation. Freedom is both: “means and an end to development”.
Development is not judged by income nor by growth rate but can only be assessed and achieved when there is an improvement in economic and political freedoms of people. In the book, Sen emphasises five types of freedoms: political freedom, economic facilities, social opportunities, transparency guarantee and protective security. These freedoms are important and play dual role of evaluation and effectiveness. Freedom evaluates development process and freedom ensures effective development.
Sen favours free markets compared with controlled ones. Free markets imply freedom to transact, freedom for the buyer to buy or the seller to sell, and — importantly— freedom to choose work.
Sen discusses Robert Fogel and Stanley Engerman’s Time on the Cross, a study of American slavery in 19th century. They argue that in some plantations average wage of slaves were higher than wages of unskilled labour in the most advanced countries. Also, some slaves were having better nutrition on plantations than the free agriculture workers in some parts of Europe. However, the — better paid and better fed— slaves ran away from the plantations at every given possibility. It was because they lacked freedom to choose what they wanted to do. Freedom to choose work is important. And it cannot be compensated by better income and better health care.
Sen points out at that those who favour free markets do it because of efficiency of free markets when compared with centralized control economies. This may be so, but it understates the true value of free markets freedom to choose what one wishes to do. Even if centralized system was more “efficient” than the free market economy, even then, it would be preferable to choose the later than the former. Restricting free markets is, Sen believes, restriction of freedom itself.
Within a democracy— compared to other political systems— citizens are free to choose. They can actively participate in the procedure of governance and, furthermore, decide what norms are acceptable and what are not. The importance of democracy is crystallized in Sen’s assertion that there has never been a famine in a functioning democracy. India is a prime example where, despite poverty, no famine has occurred. In contrast, China suffered over 20 million deaths in the famine of 1958-1962. The reason for this contrast is political freedoms.
When people are free to choose their political leaders and are free to actively participate then big social mishaps will not be ignored by the citizens. In a democracy politicians have an incentive to to perform, deliver over politicized issues. Natural disasters and man made disasters are very politicized issues in developed as well as developing countries. When a country faces calamities, failing to respond is a political failure for the politicians. Therefore, a famine will not happen in a functioning democracy because people in politics will do everything to prevent it. It is not the benevolence of the politicians, paraphrasing Adam Smith, but self interest that makes politicians perform in a democracy.
Development as Freedom is interesting, informative and intuitive. Sen shakes well established arguments and lights up new pathways. However, Development as Freedom is a philosophical discussion on development. It is not a policy document. One will not find solutions to questions like how much aid should be given, what is the correct method of conditional cash transfer or how much the interest rate should microlenders charge, or what should be the minimum wage in a certain country. But for those interested in development this book provides extreme renovation— erase and replace. It erases many of the previous held dogmas and replaces them with new insights and perspectives.
Date: 22 July 2015