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Journalism of Courage
— Ritwika Patgiri
In this era of uncertainties, the India-ASEAN partnership is “emerging as a robust foundation for global stability and development”, said Prime Minister Narendra Modi during the 22nd ASEAN-India Summit.
The issue of development has increasingly become a shared concern due to a number of factors, such as trade war, rising tariffs, and geopolitical instability. This context invites a deeper inquiry into the very idea of development: does it merely signify economic growth, is it an evolutionary process of social change, or is it best understood through different development models? Let’s explore.
In the 1950s and 60s, the term “development” referred to economic growth, understood primarily in quantitative terms. Economist Walt Rostow viewed development as an evolutionary process of social change, where regions progress through five distinct “stages of development”.
Economist Simon Kuznets, on the other hand, hypothesised an inverted U-shaped relationship between inequality and economic growth. He posited that as countries develop, inequality initially increases but begins to reduce after a certain point. In this view, as a country transitions from an agrarian to an industrial economy, inequality rises with urban jobs offering higher wages and leading to rural-urban biases.
For development economist Michael Lipton, such development policies with “urban bias” disproportionately favour the urban middle class while neglecting the rural poor. On the other hand, feminist economists like Claudia Goldin suggest that women’s labour force participation follows a U-shaped curve historically – being higher in pre-industrial agrarian societies, and declining during early industrialisation as it created more jobs for men.
The 1987 Brundtland Report introduced a key concept of “sustainable development”, referring to growth “that meets the present needs without compromising the needs of the future”. The concept emerged in response to concerns that the rate of economic growth was unsustainable as it was depleting arable land, water, and other natural resources.
Thus, the concept of development has many facets – economic, social, regional, class, gender, etc.
A development model can be defined as a framework that outlines the stages or phases of growth. But there is no single model of development that countries have followed.
For example, capitalist development in countries like England in the 1840s was characterised by rapid industrialisation that led to mass urbanisation, rise in factory employment, introduction of new machinery and steam power, and an increase in industrial production. This process generated substantial profits for capitalists, and facilitated capital accumulation. But wages for workers were kept low.
In the 1960s, the East Asian Tigers of Singapore, Hong Kong, Taiwan, and South Korea saw rapid industrialisation and economic growth, with export-oriented policies and significant government intervention in promoting development.
India, however, followed a development model of mixed economy through its Five-Year Plans. The economic reforms in the early 1990s saw a shift to market-oriented economy, privatisation, and competition.
After World War II and the establishment of the Bretton Woods system, the newly independent countries of Asia, Africa, and Latin America faced the challenge of weak industrial foundations. These economies were dependent on the exports of primary commodities or agricultural products.
Empirical evidence suggests that, over the long run, the price of primary commodities declines relative to that of manufactured goods, thereby deteriorating the terms of trade – defined as the ratio of export prices to import prices – of these countries.
In development studies, the Prebisch-Singer hypothesis posits that the terms of trade move against the developing countries, prompting them to export large amounts of primary products to import manufactured goods from industrially developed countries. Hence, the role of the state became significant in the development policies of the newly independent countries.
Similarly, the infant industry argument suggests that temporary protectionist policies, such as tariffs and subsidies, are important in protecting new domestic industries from foreign competition. The post-colonial state-led development model, thus, placed the state at the core of nation-building through intervention, planning, protection, and the expansion of the public sector.
However, developing economies often experience market failures, inaccurate information, weak competitive structures, and incomplete markets (that are either underdeveloped or do not exist). From the 1980s onwards, the Bretton Woods institutions advanced a new policy framework – known as the Washington Consensus – which prescribed a set of market-oriented reforms for these developing countries. These policies focused on trade liberalisation, privatisation, and financial liberalisation.
Two other concepts that are also important in understanding development models are centralised and non-centralised approaches. In a centralised model, decision-making power, resource allocation, and planning rest with the central government.
India’s Five-Year Plans, China’s centrally-planned economy, and the Soviet Union’s Five-Year Plans help us understand how centralised models operate. For instance, China’s Sixth Five-Year Plan (1981-1985), under Deng Xiaoping, established Special Economic Zones (SEZs) to promote trade, attract foreign investment, and achieve an average annual growth rate of 5 per cent in industrial and agricultural products.
Interestingly, the centralised model was also effective in China in diffusing industrial and agricultural technologies. In contrast, decentralised models of development shift decision-making, planning, and resource allocation to local governments.
Nevertheless, many developing countries over the past four decades introduced reforms to decentralise development planning. China’s healthcare reforms during the Cultural Revolution present an earlier example of decentralisation, when urban hospitals and medical schools established clinics and centres in rural communes. Mobile medical teams and “barefoot doctors”, familiar with local conditions, provided grassroots healthcare, medical education, and treatment for common illnesses.
The 73rd and 74th Constitutional Amendments in 1992 also provide a good example of decentralisation reforms, as it conferred the constitutional status upon rural local bodies (panchayats) and urban local bodies (municipalities). The three-tier system of local self-governance at the village, intermediate, and district levels through the establishment of Panchayati Raj Institutions (PRI), these amendments sought to decentralise decision-making, promote local participation, and strengthen grassroot democracy.
Such models of development and governance encourage transparency, community ownership, as well as inclusivity like like greater representation of women in the decision-making processes.
However, structural challenges often persist even within decentralised models of governance and development. It has also been argued that local governments, driven by growth and revenue incentives, may distort markets for self-interest and subsidise specific industries to attract investment or expropriate land for industrial projects. In such cases, local autonomy may undermine the national integration of markets.
But contemporary development models recognise that development is a complex process. For instance, India’s development agenda aimed at achieving Sustainable Development Goals (SDGs) reflects a blend of both centralised and decentralised approaches.
The National Nutrition Mission, or the Poshan Abhiyaan – aligned with SDG 3 – good health and well-being – launched in 2018, seeks to improve nutritional outcomes for children, pregnant women, and lactating mothers by reducing malnutrition, stunting, and anemia. The programme was later merged with the Saksham Anganwadi and Poshan 2.0 initiative to create an integrated nutrition support programme.
While Poshan 2.0 is a centrally-sponsored programme, its implementation is carried out through state governments. The key drivers of the initiative at the grassroots levels are the Anganwadi or community-based, predominantly female frontline workers who deliver services focused on health, nutrition, and early childhood education. Despite being underpaid, these workers have emerged as the backbone of child and women’s healthcare in rural India.
Contemporary development models, thus, integrate centralised policy-making with decentralised execution. However, decision-making and problem-solving responsibilities often remain detached from the source of local information and execution.
For instance, the decision-making apparatus to address the Covid-19 in India was considerably centralised, even though the frontline health workers played a crucial role during the pandemic. The procurement and distribution of vaccines were largely centralised, with key decisions, such as the identification of priority groups and the requirement of nationwide registration, taken at the central level.
At the same time, local health workers carried out door-to-door vaccination drives in remote areas, like Kargil. While the execution remained decentralised, mandatory registration through the CoWIN portal excluded many citizens lacking digital access or even literacy. It revealed a gap between centralised designs and local realities.
Decentralisation may help reduce these structural barriers by granting local governments greater decision-making autonomy and resources to tailor policies to local needs. However, the effectiveness of such policies depends on the capacity of local institutions, and the alignment of local interests with national development goals.
While the centralised decision-making and local execution remain an important part of contemporary development models, it is equally crucial to strengthen local institutional autonomy in the decision-making processes, as well as budgetary control. Furthermore, local capacity-building through training and infrastructure development can also provide an efficient way of delivering and monitoring development programmes.
In contemporary development models, decision-making and problem-solving responsibilities are not located close to the source of information and execution defeating the objectives of development.” Critically evaluate.
Explain a country’s transition from an agrarian economy to an industrial economy through Kuznets Curve.
Bretton Woods institutions advanced a new policy framework – known as the Washington Consensus – which prescribed a set of market-oriented reforms for developing countries, focussing on trade liberalisation, privatisation, and financial liberalisation. How did this shape the development trajectories of the Global South?
Decentralisation can help reduce structural barriers by granting local governments greater decision-making autonomy and resources to tailor policies to local needs. But how could the effectiveness of such policies be ensured?
(Ritwika Patgiri is a doctoral candidate at the Faculty of Economics, South Asian University.)
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