The danger in Redistribution

'A corollary is that if the state's role is predominantly redistribution, the middle class will seek - in Professor Albert Hirschman's famous terminology - to exit from the state. They will avoid or minimise paying taxes; they will cocoon themselves in gated communities; they will use diesel to obtain power; and they will send their children overseas for higher education. All these pathologies are in evidence in India. By reducing the pressure on the state, middle class exit will shrivel it, eroding its legitimacy further, leading to more exit and so on. A state that prioritises or over-emphasises RRE, risks unleashing this vicious spiral.

For this admirer of Professor Sen's exceptional academic work two ironies stand out. His Nobel-winning insight was about the importance of broad purchasing power rather than the narrow (physical) availability of food in avoiding famines and mass starvation. It is curious, even mystifying, therefore, to see him forcefully advocate, through morbidity-laden polemic, the physical provision of one type of food - cereals, which are rapidly declining in people's consumption basket - to help reduce malnutrition.

His second major insight was that development was about freedom, especially the freedom to exercise choice. Yet, the RRE approach has privileged paternalism - by determining that the poor need specific assistance - over expanded choice in the form of "untied" cash transfers or broader employment opportunities that enhance purchasing power.

If there is a tension, even contradiction, between Sen, the academic and Sen, the advocate, this government might, in the twilight of its tenure, do well to ask itself: did we draw our inspiration from, and put faith in, the wrong Sen?'


Popular Posts