1/ Striking, contrasting new findings on Indian govt.'s "New Welfarism" with broader lessons for pol. economy of development & for democratic politics

1. Big gains on New Welfarism, namely, access to essential goods/services

2. But reversal of gains on child stunting
2/ Piece @IndianExpress by @vksdimble @abhishekecon & me based on our analysis of first round of new National Family Health Survey (NFHS-5) data: indianexpress.com/article/opinio…
3/ What's New Welfarism (NW)?

Distinctive, conscious redistribution/inclusion policy:

not prioritizing basic health/education

ambivalence on safety net

Instead, subsidized *govt.* provision of essential *private* goods/services: bank a/cs, toilets, power, fuel, housing, water
4/ Finding 1

From 2015, big gains in households' access to essentials, targeted under specific programs

Levels of access at historic high (60%-95%)

Pace accelerated sharply under Modi govt.

Gains marked in rural India & for women's financial inclusion
5/ Finding 2

But stunting of children-already high by global norms in 2015-has gone up, reversing progress over a decade

So, not stalled progress but retrogression
6/ Pol. economy: Why progress on NW, setback on stunting?

NW backed by Conviction (imp. for lives of poor) AND

Calculation: Target tangibles that are easy to deliver, measure & monitor AND ensure attribution to govt./benefactor

Less easy to do for child nutrition/stunting
7/ Pol. economy: Why progress on NW, setback on stunting?

Child nutrition requires time to deliver; related to social norms; & poorer households having more incomes

Findings on stunting outcomes at odds w/ narrative of rapid growing economy, pre-Covid: hks.harvard.edu/centers/cid/pu…
8/ Broader global trend in democratic politics?

New recipe for electoral success (also Turkey/Hungary/Poland)

-leverage identity politics of right
-embrace tepidly market-reform of center
-appropriate redistributive economics of left (distinctively in India-New Welfarism)
n/ Data and details of findings here: drive.google.com/drive/folders/…

pdf version of @IndianExpress piece here: drive.google.com/file/d/1FCfy-l…

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More from @arvindsubraman

21 Oct
1/ India's macro-trade-development puzzle stemming from 2 surprising facts

new paper w/@shoumitro_c: ashoka.edu.in/static/doc_upl…

Puzzle

Post-1991, world's 3rd fastest manufacturing export growth (Fact 1)

despite

Massive under-exports of unskilled labor goods (Fact 2)
2/ Fact 1

India considered inward-oriented economy & premature "deindustrializer: drodrik.scholar.harvard.edu/files/dani-rod…

But, for 3 decades, post-1991

Exports a key driver of growth

Not just services but manufacturing exports have grown rapidly (12% annual)

India an east Asian Tiger!
3/ Fact 2

That Indian economy services not manufacturing-based economy well known: pubs.aeaweb.org/doi/pdfplus/10…

But *magnitude* of defying comp. advantage striking: missing low-skill exports/production b/w $60-100 bn.

So too is duration. Under-performance several decades old
Read 9 tweets
16 Oct
1/ The India-vs.-Bangladesh GDP per capita comparison (post @IMFNews WEO) has sparked anxiety & acrimony

But wrong numbers being compared

NO, on more appropriate metric, India has not been surpassed and, according to IMF, unlikely to be in near future
2/ GDP per capita is an *estimate* for one *indicator* of the average standard of living/welfare in a country

Note the 2 caveats, it is only one indicator, there are many others (eg. human development index)

and even as that indicator, GDP can be measured in many ways
3/ We need to measure "real" GDP in local currency after taking out effects of inflation and

Then, convert all local currency estimates of real GDP into comparable dollars

Many ways of doing this (IMF has 3, World Bank has 4)
Read 8 tweets
15 Oct
1/n Second (& final) piece in @IndianExpress by @shoumitro_c & me where we evaluate the twin prescriptions of India’s inward turn: favouring domestic demand over exports (macro) and raising barriers to encourage domestic production (trade): indianexpress.com/article/opinio…
2/n We argue for more openness in areas of opportunity for India, eg. clothing. A key policy is reducing import tariffs on man-made yarn, a critical input to most dynamic export segment. Chart shows these tariffs for key competitors: India’s doubled recently & highest again Image
3/n our first piece in @IndianExpress where we document inward turn & discuss underlying rationale (“myths”) is here: indianexpress.com/article/opinio…
Read 5 tweets
14 Oct
Excited about first research outputs from @AshokaUniv Center for Economic Policy (ACEP) on India's Exports and Growth

Research paper: ashoka.edu.in/static/doc_upl…

Policy paper: ashoka.edu.in/static/doc_upl…

w/ @shoumitro_c

1/ ImageImage
Focus here is on policy paper.

India's inward turn ("atmanirbharta"):
-favoring domestic demand over exports (macro)
-imposing barriers favoring domestic production (trade)
...is consequential

3 questions

1. Is inward turn strong?
2. Is it warranted?
3. Will it work?

2/
Our @IndianExpress piece today (another tomorrow) covers questions 1 and 2: indianexpress.com/article/opinio…

Is Inward turn strong?

Yes: on trade, tariffs up, standstill on trade agreements, and slew of incentives/subsidies for domestic manufacturing.

3/
Read 14 tweets
1 Jun
Final *central* government revenue numbers for fiscal year 2019-20 for India released on Friday by Controller General of Accounts (CGA). Some confusion on their interpretation. Four take-aways 1/n
1. CGA numbers less reliable gauge of underlying economic activity because center's GST revenues are volatile, reflecting center's policy on sharing them with states. More reliable is a broader measure of *national* taxes: overall GST (center & states) plus all central taxes 2/n
2.Annual growth in this broad measure of taxes was minus 1.6% (nominal) and minus 6.1% (real). Excluding corporate taxes-which saw large rate cuts-growth was 3.2% (nominal) and minus 1.5% (real). *Real* tax growth is one macro-proxy for underlying *real* economic activity 3/n
Read 5 tweets
11 May
1/n My @ProSyn is about the complacency of elites in Europe, US and China and how the current crisis might undermine that. A short thread to explain: project-syndicate.org/commentary/cov…
2/n Europe: The sense that integration cannot be reversed is strong. But Europe is creating a permanent underclass of countries (in South, esp. Italy) that neither shares prosperity of North in good times and is abandoned in calamitous ones
3/n USA. Elites adamantly cling to American exceptionalism. But 4 successive shocks to leadership: imperial overreach (Iraq); rigged economic system (fin'l crisis); dysfunctional politics/polarization; & epic incompetence in covid crisis. Diminishing allure of American "model."
Read 5 tweets

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