The Royal Swedish Academy of Sciences hailed this year’s Economics Nobel prize winner Angus Deaton’s research for the breadth of its impact. “By emphasising the links between individual consumption decisions and outcomes for the whole economy, his work has helped transform modern microeconomics, macroeconomics and development economics,” it said. The central message emanating from Deaton’s work, including his eloquently titled book The Great Escape, is that inequalities are often a consequence of economic growth. The great escape from poverty and ill-health does not happen without many being left behind. However, that “in no way makes the escape less desirable or less admirable”. It is a message India must ponder as it wrestles with the imperatives of boosting economic growth and removing persistent inequalities. Over the past few years, with the deceleration in domestic economic growth in India, the role of the state and the expansion of the rights-based approach have been cast into question. Deaton’s Nobel puts that debate in sharper focus.
India has been one of Deaton’s laboratories. His work has greatly influenced how India maps its disadvantaged population. For instance, he pointed out how in the 55th Round of the NSS (1999-2000) there were measurement flaws — such as inconsistencies in the recall of consumption expenditure — while collecting data. Incorrectly collected data led to overestimates of consumption and underestimates of poverty, and vice-versa, in the country. Similarly, his work on price indices and measuring poverty was central to the poverty line drawn by the Suresh Tendulkar Committee.
Despite his frequent run-ins with fellow economists on the Left and the Right, Deaton has seldom let ideology colour his research, or unsettle his abiding conviction that stresses the political pact between the people and the state for removing poverty. He is a votary of the “Kerala model”. “The contract between government and governed — imperfect in rich countries — is often altogether absent in poor countries,” he wrote in an article in 2013. “Even in a middle-income country like India, public schools and public clinics face mass (unpunished) absenteeism. Private doctors give people what (they think) they want — injections, intravenous drips and antibiotics — but the state does not regulate them, and many practitioners are entirely unqualified”.