Abhijit Banerjee and Esther Duflo interview: ‘India’s policy frame is not focused on inequality’

ED: India has a long tradition of excellent infrastructure with the national sample survey organization — with the flagship survey, the NSS — but also with various surveys. So we kind of go from having very, very regular data with a consistent sampling frame to this state of affairs, where it’s hard to say.

QUESTION 2: What do you make of the multidimensional poverty index, which is now being used by the Niti Aayog and the Government of India in common discourse? Is that a good substitute for the consumption data-based method?

AB: Given that the consumption data is not really there, it’s probably a better thing to use, because at least then you focus on whatever infant mortality, maternal mortality etc. And so, in some ways, those we at least used to get reliably from the NFHS (National Family Health Survey). So in that sense, this is probably the right direction to go unless we go back to generating reliable, transparent data on consumption.

QUESTION 3: As a country, we’ve tried different things to alleviate extreme poverty — from giving direct cash or food to focusing on growth and hoping that growth will bring about prosperity. What do you think, based on your J-PAL experience, has worked for India in terms of alleviating poverty, and what can be improved upon?

AB: Given that we make our bread and butter by insisting that proper evaluations are important, you don’t want to get me to answer that question point blank (smiles).

But I think the evidence suggests that NREGA (National Rural Employment Guarantee Act) worked; there are good evaluations showing that it worked and that it reduced poverty. I am relatively confident, without having seen direct evidence, that PDS is also doing something for (alleviating) poverty.

What is harder to say is whether or not the more targeted to specific needs (schemes) — the PM Awas Yojana, for example, or the energy subsidy — what the impact of those (schemes) is because it’s not clear who exactly getting them; is this really about poverty, (or) is it really about, you know, politically, navigating a situation (where) there (is) lots of inequality and people are resentful. It’s harder to know whether this is really about poverty — think of the PM-Kisan. But all of these are a bit mixed.

QUESTION 4: In India, as the years have rolled by, it seems, the issue of inequality has become relatively more important than poverty reduction. One keeps hearing about K-shaped recovery, and also the fact that even before the pandemic we grew in an unequal way. What are your thoughts on the poverty versus inequality debate? Is inequality a bigger concern for India today?

AB: That’s an omnibus question. There are many things in it but I’ll only touch on some of them. One thing that’s very clear is that our national policy frame is really not focused on inequality; that there is no real discourse about it. And partly, that’s a statement about: What is your view of why inequality is important? It needs to be theorized. And, of course, there are political economic reasons…and it’s not clear there whether things have got worse or better, because, maybe economic inequality was much more limited (in the past) but social inequality through caste was vast, through class was vast. And, you know, the levels of violence and inequality that were (have), maybe, somewhat mitigated. The political system is more responsive to those things. (Even now) People often do really awful things. But there is a reaction to that, the political system isn’t totally impervious to it.

So it’s a much harder question to say (whether inequality has gone up or down).

If my view was (that) the abuse of power was the primary source (of) inequality, then it is not clear which way things have gone. In many ways, the power has shifted from maybe rural landlords to urban businessmen. But I don’t know if the abuses have become higher or lower. Those are hard questions. And I don’t know the answer to that.

But then you could have a very different theory. In terms of the work we do, inequality is a mechanism that reflects the lack of social mobility. Once it used to be that government schools were good schools, and if you were a talented child from a poor family, you had a chance. But that’s got harder and harder. I mean, you know, there are attempts to fix that. For example, Delhi has made a valiant attempt to deal with improving school quality, but in general, the fact is that everybody’s checking out of the public school system. In Bengal, for example, there’s this tuition nightmare. Then the fact that the rich can essentially inelastically buy whatever they want to buy, means everybody else is really (facing) an unfair competition.

So if we want to think about a different aspect of inequality — it is just access to the channels of social mobility. The rich parents can invest so much in their children — you know, so out of range for anybody else. So I don’t know… again, I won’t say that I have great data on it but I think people, all over the world, find connections between rising inequality and lack of social mobility. And the mechanisms are often these — that there are certain public goods that you can no longer access.

I think there are other forms of inequality, which we don’t talk about. For example, I think poor children have no amenities, they have no place to play, they have no green spaces, they have no…I mean all of these things are… And these have long-term consequences on how people grow up, their psychology, etc.

So I do think that we need to first start by articulating: What is it that troubles us about inequality? The fact that schools are really a central piece of social mobility and yet the best private schools get more and more expensive and fancy, and they creating mechanisms for people to basically hold on to their privilege is, in the long run, not in the national interest; it is not in anybody’s interest and is both unfair and inefficient.

When we talk about inequality, we’re really talking about a whole set of questions. And I’m just touching on only a few to get that conversation (started). We need to have a public conversation about why we care about inequality and what is it that we’re trying to achieve by the mechanisms we use to alleviate them.

QUESTION 5: On the issue of education, there are two main concerns: improving education outcomes — especially at the level of primary education) and addressing unemployability — quite apart from the concerns of unemployment in India. How do you see the policy landscape in India, especially in the context of your learnings from the work at J-PAL?

ED: (The progress on improving educational outcomes) has been slow, extremely slow. Especially since we have a sense that it’s not rocket science for primary school; it is really a matter of focusing on the basics, and, and being relentless until every child learns every bit of those basics. It is possible and it’s been demonstrated that it’s possible at a huge scale and in government schools. It worked even in some of the very poor schools in UP where there was almost nothing and there you get even more spectacular results.

So, given that we have an easy solution, the adoption of that solution has been a little sluggish. But it is happening. I think, on the whole, it is really going in a direction where there is more and more interest. Abhijit already mentioned Delhi, and Delhi has been basically moving wholesale in this very pragmatic direction with remarkable success — where the government school in Delhi is doing better than the private school at the class 10 exams. This comes out of a lot of investment from the very beginning. And Delhi is not the only state. One of the places where we evaluated the programme of Teaching at the Right Level was Haryana. Although it wasn’t scaled up there later.

AB: Where I think we really don’t know much is on secondary and post-secondary education. And in particular, I think, there are really two issues about employability.

One is, and I think some of our work highlights this, that the pedagogy is often designed to suppress curiosity, your own way of thinking or your own way of solving problems — it is extraordinarily routinized. And some work we’ve done in Uganda suggests that you can get huge effects from encouraging children — these are older kids— to think on their own. So in the equivalent of the school-leaving exam, there is the upper primary ending exam in Uganda. And once you expose children to a pedagogy that encourages them to think on their own, the pass rate goes up from 50% to 75%. That’s a 50% increase.

So a pedagogy that’s sort of top-down — ‘Here’s the truth’; you don’t actually have to think, you have to know what it is — is doing damage and that damage probably flows through. And once you’re not prepared to learn in a particular way, then the system isn’t actually going to rescue you.

The other thing about employability is expectations. And a lot of work, including some of our work, (shows that) a lot of young people expect that because in their parents’ generation education had high returns, and they could get a job, they expect a job. And in particular, in India, the obsession with government jobs is really counterproductive. It’s extraordinarily counterproductive, because people spend the first six, seven years of what would be the working life taking tests, trying to get a job, etc, and then failing, and then taking (some other) job.

And I’ve written about this: the Indian labour force participation data looks very strange. At 30, suddenly, everybody, all the males are working. And so that’s reflective of the fact that we have created a system where this obsession with government jobs is hurting employability. People don’t want (other) jobs.

We did some work with training programmes, and people were trained, and then they didn’t want the jobs they could get from the training.

In that sense, I think that we really need to take this beast — of a government job as being the ideal of life — head-on. All the employability issues are connected to that.

So this employability issue isn’t just a matter of skills, it’s a matter of attitudes, and we’ve created a setting where the attitudes are extraordinarily distorted.

QUESTION 6: How does one address this issue of expectations?

AB: There are probably two sides to this.

One is, I think, the government could expand the number of people it employs if it didn’t offer them the kind of terms they’re offered. For example, in China — I haven’t checked the data — there are three people with a bachelor’s degree in every village working for the village government. That changes the world. These are people with certain skills and a certain amount of knowledge of the world. So one thought is that the government should start introducing maybe a transitional mechanism where you take a job, and then it’s only if you’re good at it, that you keep it otherwise you can work for some years, and then you don’t. It’s like a tenure system. That will still create more jobs.

We need more people on the ground. I don’t think our government is big enough. There’s a lot of people who will say that we have a big government, but in fact, we have a small government that’s trying to keep control, which looks like a big government, a heavy government, but it’s not actually so. The size is small (but) the hands are heavy, as a result partly, because it can’t do anything new because it has so little bandwidth. So rethinking the shape of the government, having more young people in government, as a trial as a way to start your life, but then you can go out and do something else. And somehow getting the court systems to agree to not ex-post turn everybody into a government official. I think it needs a set of tough decisions. But I think without that, our employability issues are going to be fraught all the time.

QUESTION 7: Lastly, one of India’s biggest concerns, as shown by NFHS data, is the issue of a large proportion of India’s children being stunted and wasted. What can be done to address this?

ED: I will give my answer — I don’t know if he (AB) agrees. Unlike primary education, it’s not that there is one solution that we know would work. It’s not a matter of no magic bullet — it’s just that there haven’t really been things that have shown great promise.

Here and there something makes a difference. For example, in Tamil Nadu, J-PAL experimented with adding a second ICDS (Integrated Child Development Services) worker in the Anganwadi, with one person being focused on nutrition, and that helped a bit. But it was very expensive, and it wasn’t scaled up.

I think this is an area where there is honestly a ton to be learned. And I also think, maybe I’m wrong, that it is an area where there is actually a political consensus that if there was something to be done, they would be interested in scaling it up.

But we are at a loss (in terms of solutions) unlike in other countries. For example, in Africa, where countries are much poorer, stunting and wasting of children are improving so much faster.

AB: There are two things. One is: We already knew that this was not a poverty problem because we knew that the malnutrition rates in some categories of NFHS were worse than the average African child in a very poor country.

ED: One of the worst is Tamil Nadu, which is one of the richest (states in India).

AB: I suspect that if you look at the numbers, there’s something that jumps out at you, which is that protein consumption is extraordinarily low in India. Relative to everywhere in the world, we eat too little protein. We think that dal contains protein, but it’s actually very starchy and has very little protein. The reason why it is politically difficult is that telling people that they really don’t eat the right way is a difficult thing to do.

People have a traditional way of eating and if somebody told me that you really should stop eating everything you eat, and eat something else, I’ll be upset.

But on the other hand, to me, here awareness is critical. In our work, we made a sitcom to push the use of iron-fortified salt in Bihar, and it was the only thing — we did many interventions — that worked. So I do feel that there is a sense in which the media really needs to tell people you’re not feeding your children the right things.

If you look at the Lancet recommendation for how much protein people should eat, we are at 20% of that or so. It’s really ridiculous. Maybe they’re off by a factor of two, but we’re still below. So I do think that there is a sense in which if I had to pick something on which we will work I will work on more protein in the diet and where and what has . Eggs have protein, Milk has protein, peanut butter has protein. Protein is not hard to get. Vegetarians can get it.

But you really need to think about protein as being the thing that we are missing in our diet. I mean, I know we need a randomized controlled trial (RCT) to show that, in fact, if we change the diet, those nutrients will be absorbed, the body will use it and you will grow taller. So I’m not claiming that I know the answer that it will work. But, prima facie, if I had to take one hypothesis to run with, I would say let’s try to dramatically increase the protein in the diet.

Question 8: It is often said India doesn’t allocate as much money in its budget for health and education. Is that such a big concern for you? Is it a resource problem?

AB: It is not the same. Health and education are different.

On (budget allocation for) health, even now India is globally on the low side.

On education, we are, kind of, at the median (level) for our per capita (GDP). The question is more (about) the allocation towards the elite institutions versus the schools. And I think there, the distortions are more there than in the total amount of money (allocated).

This goes back to this thing I was saying about social mobility. I think we really need to take the idea of building institutions for social mobility, because in the long run, that will lead to a crisis. If people feel that they are completely left behind — and that there are only poor quality jobs for them and good jobs for a small field (of people) — that will eventually not work out.