This election season has seen a lot of talk about “development”. The Bharatiya Janata Party's (BJP) prime ministerial candidate Narendra Modi is touted as a hero of development policy because of his record in promoting economic growth in Gujarat. Too seldom, however, are questions asked about what the most pertinent measure of development is, when it is the lives of people that we are considering. So it’s time to rehearse again the arguments that have led leading development thinkers all over the world, from the United Nations Development Programme to the World Bank, and including the influential report on development and quality of life by a commission convened by President Sarkozy of France, to reject growth as an adequate measure of development and to prefer, in its place, what is now known as the “Human Development” paradigm. First, I’ll discuss the issues in a general way. Then I’ll turn to Gujarat, showing that, although the growth-based paradigm does indeed give Narendra Modi high marks, the Human Development paradigm, by contrast, shows his record as only middling, far worse than that of states such as Tamil Nadu and Kerala, which have been preoccupied, rightly, with the distribution of health care and education. Given the high economic status of Gujarat, one might conclude that Modi’s record is not just middling but downright bad.
As the distinguished economist Mahbub Ul Haq wrote in 1990, in the first of the “Human Development Reports” of the United Nations Development Programme: “The real wealth of a nation is its people. And the purpose of development is to create an enabling environment for people to enjoy long, healthy, and creative lives. This simple but powerful truth is too often forgotten in the pursuit of material and financial wealth.” This is not a partisan political statement, it is an evident truth of human life. Development is about people and their lives. Rightly understood, it is a normative concept: it means that those lives are getting better. So how would one accurately measure that important concept?
The growth-based model of development measures development simply by looking to Gross Domestic Product (GDP) per capita. First of all, even if we want an average measure that is a single number, a strategy I’ll shortly call into question – it’s far from obvious that average GDP is the right number. The Sarkozy Commission report argues that average household income would get us closer to seeing how people are really doing. The GDP doesn’t as adequately capture the daily perspective, because the profits of foreign investment can be repatriated by the foreign country in ways that don’t necessarily change the lives of the people in the nation in which they invest.
Read more at The Hindu Centre for Politics and Public Policy