India's expert trade

As citizens of the world's largest democracy prepare to vote in a general election, Partha Dasgupta assesses its fast-changing economy and one of its best-known products: economists

The economist Martin Weitzman once remarked that the quality of an academic institution can be gauged by the extent to which you are comfortable informing your mother-in-law that you have accepted an offer of a job there. The Delhi School of Economics is outstanding, even when judged by this standard. Established in 1952, it is in effect the postgraduate social sciences department of the University of Delhi (it houses not only economics, but also sociology, geography, and commerce). The school was conceived by the late V. K. R. V. Rao, an economist-educationist of exceptional intellectual, moral, and personal qualities. Not being content with having founded one institution, the tireless Rao went on to create two more, but the Delhi School remains his greatest legacy. In the mid-1960s it had Jagdish Bhagwati, Sukhamoy Chakravarty, Dharma Kumar, A. L. Nagar, K. N. Raj, and Amartya Sen in its economics department, and Andre Beteille, M. S. A. Rao, M. N. Srinivas and (a bit later) Veena Das in its sociology department.

D. School, a collection of essays by past and present members of the departments of economics and sociology, is a homage to the place. Like all such recollection, it is a mixed bag, ranging as it does from a masterly account of the founding of the institution by P. N. Dhar to a piece by M. N. Srinivas about himself. But there are several good essays, and the editors have shown exquisite sense by asking a wide range of people to contribute. So we get a glimpse of the place not only from those who taught there, but also from those who studied there and went on to do things other than economics or sociology.

A number of essays suggest that life at the school, even while exciting, has not always been calm, that there were underlying tensions during its most creative period, the second half of the 1960s. This rings true to me. You cannot bring together ambitious and creative people and not expect rivalries. Nevertheless, the school as a collective created an environment in which its faculty could produce enduring works on the foundations of intertemporal welfare economics, social choice theory, international trade, and econometrics; and on caste, kinship, ritual, class, and power, based on exemplary field work. Inevitably, as its reputation grew, the quality of its students improved. For over 30 years the place has attracted the finest and most interesting students in the social sciences from the entire country. Delhi School graduates and faculty have infiltrated academic institutions everywhere: some have become writers, others help govern and administer India, edit magazines, conduct business and work for charities. Its economics department may no longer be a creative force, but no matter; it continues to provide an infrastructure that enables students to face the intellectual world anywhere. Its sociology department remains exceptional. Among social science institutions in the subcontinent, the school is pre-eminent.

How did this come about? Why was Rao more successful than he had any right to expect? The essays in this volume offer hints. In their contributions, economists Mrinal Datta Chaudhuri and Amartya Sen, anthropologists Andre Beteille and Veena Das, and the photographer Sanjeev Saith help nail things down, and I think I now know what the answer is.

For an academic institution to be any good, it must reflect what I can only call taste. Those who ran the school in the early years had the taste to create what was then an unusually large number of senior positions, fill them with young people of quality, and let them get on with it. This free-wheeling attitude to intellectual inquiry in the social sciences is a rarity in the subcontinent, but those institutions that can nurture it reap enormous benefits. The Delhi School did it by attracting a number of young people who were not only extremely clever, but knew what to be clever about.

Inevitably no institution, however good, can satisfy everyone. The economist Prabhat Patnaik was a student there but could not belong. He says the school's economics department has fallen short of being outstanding because it failed to inculcate "collective arrogance", something that, say, the faculty of economics at Cambridge displayed in its "Keynesian" days. On closer reading, it transpires that by collective arrogance Patnaik means a collective ideology, allied to a common research agenda. Co-editor Kumar takes this criticism seriously and thinks that perhaps it was a wrong move on the part of the economics department to give so much importance to the teaching and development of "high theory".

I think they are both wrong. The problem with collective ideology is that it breeds intolerance and, ultimately, blindness to intellectual quality, the worst sin in an academic institution. And it is all well and good to hanker after a common research agenda, but a department will fall into a rut when the agenda inevitably runs out of steam. Meanwhile, it will have been filled with people less than able, but who are there only because they were for the agenda. The faculty of economics at my own university made this mistake over a period of 20 years, with unfortunate consequences.

As Sen recalls, when redesigning the economics master's programme in the mid-1960s, a conscious decision was made by the professoriate to teach students the tools of modern economic analysis and avoid ideological fuss. I am convinced this helped propel the school to its current position. Think of the alternative, which would have almost surely been to conduct a running commentary on the Indian economy, with periodic homages to the writings of dead economists, most especially Marx. This alternative has proved to be so seductive, that it has been a rare economics department in the subcontinent able to equip its students with a flexible set of modern tools with which to address social problems. I can think of only one other that would have rivalled the Delhi School on this score. Under the intellectual leadership of the late Amiya Dasgupta, the economics department at the University of Dhaka in the 1930s and 1940s stressed modern economic analysis and became pre-eminent in the subcontinent. But the partition of India in 1947 killed it. That the Delhi School of Economics has avoided getting enmeshed in the ideological battles that are an obsession among the more active social scientists in India is itself a tremendous achievement.

The Delhi School reflects elitism at its best. Functioning at its worst, however, elitism has kept some 60 per cent of the females and 35 per cent of the males in India over the age of seven from learning to read and write. The disappointing social statistics from India are today familiar matter, but nowhere will you find as intensive a collation of a number of them as in India: Economic Development and Social Opportunity, by Jean Dr ze and Amartya Sen. Modern economic theory tells us that while there are only a few pathways for fostering economic development, the number of routes by which a society can muff its chances are many. In recent work I have tried to develop and use this theory in conjunction with evidence for identifying the duties of the state in poor agrarian societies (An Inquiry into Wellbeing and Destitution, 1993). Judged by the findings there, India's economic performance has been poor not because she has produced too many economists, as is sometimes remarked only partly in jest, but because she has not taken economics seriously enough. Thus, the state has been consistently active in areas it should have left alone (it has built luxury hotels, for example, but stifled trade and domestic production with complex restrictions on private agents) and neglected spheres in which it should have been intelligently active (primary education, public health, infrastructure, social security, agrarian reform, local democracy and the environment, for instance).

Dreze and Sen are particularly interested in the sphere of neglect. But they focus (unhappily, to the exclusion of almost all else) on the state of primary education and health, and on the central role gender relations plays in the ways in which those these vital "goods" get allocated within and across households. The first third of the book offers a fine account of India's achievements and failures, both absolutely and in comparison with other poor countries, notably China. It is, however, the latter two thirds that lift the book above today's standard commentary on a country's economic performance. India is a subcontinent, with a population of 900 million, covering a wide range of ecological zones. To regard it as a unit (I am using the term in its arithmetic sense) would be to miss vital insights. Dreze and Sen recognise this, so they offer a commentary on data at the level of Indian state governments. To the purist, even this might seem too coarse a grain, but there is logic behind the choice of a state as the unit: under the Indian constitution, health and education are the responsibility of state governments.

In a much underacknowledged classic (An Exploration of India: Geographical Perspectives on Society and Culture, 1980) the geographer David Sopher and his colleagues used district-level data to argue that a (west-east) line could be drawn along the Narmada River and the Vindhya scarp, just north of India's central plateau, to demarcate widely different socioeconomic institutions that prevail both within and across households. (They also showed that, in this regard, the northeastern region, containing West Bengal and the Himalayan states, lies somewhere between the north and south.)

In the book's central essay, Sopher established this fact by revealing that wide differences exist in the bias against women in literacy, and that these differences follow the north-south (and northeast) divide: the bias is sharpest in the north, less sharp in the north-east, and least sharp in the south. Sopher and his colleagues went on to suggest that an explanation should be sought in differences in the ecology of these regions, reflected as they would be in differences in the rules of inheritance (eg whether the region is patrilineal) and marriage patterns (eg whether there is a village exogamy for women at marriage). Sopher's work established that the explanation behind these differences does not lie in disparities of income.

Gender biases in literacy rates are, of course, only a reflection of differences in empowerment (eg the extent to which households are patriarchal). Dr ze and Sen reconfirm these findings and collate additional evidence that includes (infant and child) mortality statistics and the ratio of females to males in the population. Thus, for example, the richest state in India, the northerly Punjab, with an average income of Pounds 220 per year, harbours a female:male population ratio of an astonishingly low 0.88:1, and literacy rates of 50 percent for females and 66 per cent for males; whereas, for the now-famous state of Kerala at the south-westerly tip of India, the corresponding statistics are Pounds 100, 1.04:1, 86 per cent, and 94 per cent, respectively. There is this and much more documentation in the book, which is written throughout in a fine, journalistic style; and it will be a starting point of subsequent discussions on social life in India. The authors build their commentary around a most interesting paradox of post-independence India: how is it that in a democratic country, where citizens enjoy wide civil liberties, there can be such large regional differences in what citizens insist ought to be attainable in the public sphere of life?

One of the authors' achievements is their reconfirmation that these differences are in turn traceable to differences in citizens' perception of what is attainable in the private sphere, in particular, what is attainable in the household. The authors stop short at this point and say not much more. They exhort deprived citizens to complain, and complain vociferously by democratic means; and they urge the state to encourage the development of local communitarian decision-making processes.

All this is, of course, what modern economic theory advocates. But how do you get people in, say, the (northern) states of Bihar and Uttar Pradesh to act like those in Kerala? And as they, the victims of neglect, have not done so thus far, why should you expect them to do so merely because you have given them statistics, which, as it happens, they cannot read? To me, the political economy of social change remains a mystery, and my country a puzzle.

Partha Dasgupta is Frank Ramsey professor of economics, University of Cambridge.