Friday, March 03, 2006

India & China

Jagdish Bhagwati commentary in the WSJ ($$):
"Yet the last Indian election created the absurd presumption that the rejection of the ruling BJP was a rejection of economic reforms -- that these reforms had increased poverty and inequality. But the fact is that urban and rural poverty had finally declined. As long as India was mired in policies that produced little growth, the poor had seen few benefits and their numbers had increased, with the consequence that the poor kept voting in the ruling Congress Party because they regarded their poverty fatalistically -- a phenomenon I have called, on these pages, the 'non-revolution of falling expectations.' Once the reforms that the left likes to call 'neoliberal' -- in contrast to their prescriptions which might, in riposte, be called 'neanderthal' -- took root, poverty declined; and the poor, who had improved their incomes, began to ask for more, precipitating a 'revolution of perceived possibilities' (or a 'revolution of rising expectations').

These aspirations had little to do with inequality between rural and urban areas; it was almost entirely self-referential: If I had become less poor, then I believed that I could do even better if I elected a government that promised me more. India's democracy, with its nearly three million NGOs, opposition parties and a functioning judiciary, translated these aroused aspirations into politically effective demand, resulting in the loss of elections by nearly all incumbent state governments.

By contrast, China's greater economic success has led to increased social protests in the rural areas; we hear constantly of 'land grabs' leading to disruptive demonstrations. A concerned Chinese government has translated these protests into the erroneous view that they are primarily the result of rural-urban inequality. But, this explanation is a witless repetition of the mistaken focus on inequality as the prime mover in political reaction. In China's case, it is evident that if a commissar's cronies grab your land, a phenomenon that may reflect also the fact that increased prosperity makes land more valuable to grab, there is no redress because there are hardly any NGOs, no opposition parties, no free press and no independent judiciary. So you turn to the streets. The Chinese rulers cannot face up to the fact that their antidemocratic structures are at the heart of the problem of increasing rural unrest; they cling to the self-serving view that economic inequality is the cause."

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