- Jean Baneth: I used to know both Bhagwati and Sen quite well and I like them. I think it was Jagdish whom I heard refer to narcissistic reflection: Economists have theories and preferences, see lots of data, and these, for them, reflect their pet theories. You are interested in "human development" and think Kerala has good policies, your theories are comforted by high literacy, low infant mortality, high life expectancy there. (Forget that Kerala was already outstanding in those respects a century ago). You are economic liberal and interested in growth, like Modi, and find confirmation that his policies are good (forget about recent dramatic improvements in Bihar...). Anyway, comparing Gujarat to all-India is like saying the Governor of Texas is obviously better than Obama because in the past five years Texas grew faster than the US.
Sardul Singh Minhas What is a better gauge of Mr. Modi's performance on the development front, if we can't rely on Prof. Panagarya's metrics?
Nikhil Desai Sardul Singh Minhas: Developmentalism, like nationalism, is yesterday's ideology. Gujaratis were never attached much to either. Indicators are cheap economists' routines for strip dancing - catering to the demand for titillation and leading to bar fights.
Of course, girls who do lap dancing are also narcissistic. Understandably.
Just that Arvind will have to pay me to watch him. (BTW, Jagdish Bhagwati has a sharp tongue and pen, and would've called Arvind one of those folks who becomes pre-maturely prominent).
Let's, on the other hand, count Mr Modi's encounters, and ask who killed Haren Pandya.
Sardul Singh Minhas No, Nikhil, I disagree. Metrics of economic development are real and important. They can't and shouldn't be ridiculed away. Why would you mock the accomplishments of a scholar like Prof. Panagariyn, who holds an earned Ph.D. From Princeton, holds a professorship at Columbia, was the Chief Economist at Asian Development Bank, and so on. It is very hard to pin you down on anything. Some folk have earned the right to be taken seriously. You can't laugh them off.
Nikhil Desai Sardul Singh Minhas: Decades ago, Simon Kuznets coined the term Modern Economic Eoch. He was of course an economist but wove a rich history of politics, technology, demography, knowledge to arrive at " structural transformations" of Modern Economic Growth - a sustained, long-term trend in increasing human productivity and well-being.
What happened 1970s on is a bastardized pop econ "indicators of development". The World Bank publishes those every two years (WDI), and UNDP also publishes about the same (HDR and HDI).
Those numbers are important to some people; as for their "real" character, I don't know. I might choose to look at child labor, street people, trade in human organs, bribe rates for different crimes, reliability of power and water supply or ambulance and policy services.
I have known enough credentialed scholars. Some are even close friends of mine. But not all of their work is good. In fact, if I say a good word about anybody's work, his/her first reaction is to call me up and ask if I was joking.
To me, Panagariya's opinion piece is a hack job. But you remember I also said the same of Raghuram Rajan committee.
Statistics and their interpretation are demanding jobs. People have shouting matches about them all the time. I don't think you should be surprised that I find their political use disgusting.
Panagariya was probably made the Chief Economist at ADB because, among other things, he can cater to the demand for political statistics.
To make a change in infant or maternal mortality takes a lot more than a regime change.
Nikhil Desai Sardul Singh Minhas: Take a look at http://www.eia.gov/.../carbon/pdf/2012_co2analysis.pdf.
What would you say if some people claim that US energy-related CO2 emissions since 2008 are creditable to Barack Obama policies (especially considering that the policies he championed, and even included in his very first budget exercise in January 2009 so as to show how carbon permits could be auctioned and the revenues used to balance the budget, failed)?
The temptation to use a "report card" should be left in school, except for proper auditors. Otherwise they become rhetorical tools.
Panagariya's "Gujarat Story" and Sen's "Kerala Story" are not that different. Persuasive tales for those ready to believe.
Academic economics became a cult from 1960s on. PhDs are commodities, reminding me of Pierro Sraffa's elegant book "Production of Commodities by Means of Commodities". By and large, the bubble sustained so long as college and graduate enrollments grew and the demand for "policy analysts" also grew, in response to greater public policy reliance on convenient economics and convenient economists.
Both these markets are getting saturated, or growing rather slowly.
Whoever said "correlations do not imply causality" didn't realize that instead of actual events, you can always generate indices and indicators.
Economics in public policy schools is a mixed basket - sometimes realistic, and sometimes fraudulent.
Nikhil Desai I will spare you the technical details - some I don't understand - but an abstract from a recent American Economic Review paper is telling:
"A growing literature establishes that high quality early childhood interventions targeted toward disadvantaged children have substantial impacts on later life outcomes. Little is known about the mechanisms producing these impacts."
The paper is about analyzing and distinguishing different influences. My point is simply that some "development indicators" are historically linked (childhood to adult to late age) and the mechanisms of interactions are poorly understood.
My short slogan is, "Process matters as much as substance". I might even say if one doesn't understand the process, talking about substance is superfluous. As true in air pollution and climate, or macro monetary or fiscal policies, or technological change and adaptation.
Heckman, James, Rodrigo Pinto, and Peter Savelyev. 2013. "Understanding the Mechanisms through Which an Influential Early Childhood Program Boosted Adult Outcomes." , AER 103(6): 2052-86.
I am usually the first to know my ignorance; works better than others showing me up (which too happens, of course).
I think someone has got the numbers on NaMo marketing expenses. A US PR firm, I believe.
Panagariya does have a value - keeping people from following Sen too much.
On the other hand, also see Sen on women in India - says, "In many ways India can be seen as a collection of distinct countries with diverse records, experiences, and problems." But still goes on to divide India between the north and west, on the one hand, and east and south, on the other. Female infanticide may have historical roots in agricultural practices, in turn affecting the value of female labor. THere's another paper on that subject for Europe in 1400-1700, I think. Sen, however, scores some convenient points without saying much new.
http://www.nybooks.com/.../oct/10/indias-women-mixed-truth/
Nikhil Desai I posted this on my timeline, but may be useful here too.
Sen-Dreze v. Bhagwati-Panagariya explained.
"There is much about this shadow-boxing that makes one wonder if Bhagwati, moving like many intellectual elites between the bubble of universities and think tanks and the private hothouse of professional rivalry, has lost touch with how the other half—or the 99 percent—lives."
Economists and their discontents.
http://www.nybooks.com/.../2013/nov/21/which-india-matters/
www.nybooks.com
In 1961, soon after arriving in Japan as the American ambassador, Edwin O. Reischauer held a public conversation with the Japanese economist Nakayama Ichiro.1 Their differences of perception illuminate many dilemmas of a developing nation like India today. The American diplomat, a particularly sangu...
Thursday, October 31, 2013
Economists and their discontents
Continuing Facebook commentary on Panagariya and uses of statistics. That Sen-Dreze and Bhagwati-Panagariya come to define the ideological battles is itself a sad commentary on Indian thinking these days.
Wednesday, October 30, 2013
Panagariya and Gujarat story without history
Someone posted on Facebook Arvind Panagariya's piece in Business Standard
http://www.business-standard.com/article/opinion/arvind-panagariya-narendra-modi-s-real-report-card-113102801007_1.html
My initial reaction:
Someone else posted disagreement with Panagariya and a praise for Bhagwati. So my answer:
Then the original poster challenged me to rebut Panagariya's conclusions:
As I said, I find Arvind below my intellectual dignity to even criticise. But I can put out some fundamental problems with this rhetorical nonsense that flows from "eminent economists" whose brains stopped years ago.
For one, poverty comparisons that do not take into account different consumption baskets and price structure. Poverty of the salt producers in Kutchh or the western coast of Gujarat is different from that of the urban slum dwellers that from Bihar or Konkan landless laborers.
Two, positives or negatives are difficult to associate with an individual. In particular when there is a mixed economy or, in case of Gujarat, a heavily private-sector oriented economy, a good part of it from investments in other parts of the country or the world (but whose returns to the investor get counted as Gujarati income if s/he is resident there.) When folks came down on NaMo for low nutrition levels, I did argue that the poor chap had little to do with it, that social and economic injustices are deeply ingrained in Indian culture and there are many reasons the poor are also victims of mal/under-nutrition. (One of which is urbanization and different consumption basket, price structure, etc.) So, Arvind's writing about NaMo report card is pure bakwas and would have been even if it concluded the opposite. (You may remember I didn't like the report from the RBI Governor's committee either. Perhaps that exchange was on the Dianuke site and not with you.)
Third, there are many determinants of nutrition and weight, and government actions as such play no direct role unless there are special rations and school meals. India's first school meal program was started in Gujarat by the Congress CM Madhavsinh Solanki and what you might be seeing in the ICDS data is that the NEXT generation of children - i.e., children of those who got school meals in the 1970s and 1980s - are simply healthier children and suffer less events of weight loss. It may also be that this subsequent generation effect also shows up in greater school enrollment rates, in turn contributing to a long-term trend of virtuous cycle.
Fourth, the Muslim poverty rate is difficult to analyze without additional demographic data. Could be that poorer Muslims have left Gujarat. Or that Muslim businesses have concentrated in some sectors - say, poultry-farming and selling eggs and chicken, which pious Gujaratis merrily eat but would not stoop to killing the birds - that have grown rapidly along with the wealth.
I don't know where to stop. Yes, Arvind is just the most moronic Indian economist I have had the pleasure to listen to, but there are many more of them.
There is a market in nonsense. Nicholas Stern down. Panagariya is crowing about the "Gujarat story". Without knowing a bit about Gujarat history. That Gujarat didn't exist until 1960 and that the entrepreneurs of Mumbai took away some of the talent from southern Gujarat, Saurashtra and Kutchh and in turn created a "Gujarat story" that is essentially Mumbai in origin (with Gujarati speakers and readers distributed among Parsis, Muslims, Hindus, Christians because of incomes and education levels).
It is Bhagwati - from Ahmedabad but a Mumbai student, then in Cambridge - who has this imagined "Gujarat story" of market liberalism that Panagariya has been parroting and BJP has found useful. A lot of Bhagwati's passion, in turn, derives from his opposition to Sen's "Kerala model", again equally imagined (but attractive to a Bengali with fondness for Communism because in the late 1950s, CPM had the power in Kerala).
So these are Central Planning vs. Market Liberalism fights of two overly arrogant men in their 80s. I don't think they or their chamchaas (Panagariya) will have an iota of a difference in the polls. Economists like roaming around with puffed chests and crowing "It's morning, it's morning", then believing it's them who wake the world, not sunlight.
Roosters also have to be made into dinner.
------------
They were looking for state GDP growth rates, remembering Punjab used to have the highest GDP per capita in 1991. My response:
Don't bother with state GDP per capita (can be looked up easily on the web). Distributional issues are more important for electoral politics and the HDI indicators of Gujarat are disappointingly low, at least until 2010 when I last looked.
Anyway, there is no denying Gujarat growth, or for that matter most other states'. What I found interesting was that the the delta or the second delta in some cases was lower for Gujarat than for other states in both state GDP as well as other indicators.
But then, too, I know how these indicators are derived and what the conceptual and methodological issues are, so inter-state comparisons need to be made carefully and not for the purposes of boasting or ashaming.
Gujarat government also is said to facilitate new ideas from NGOs; I don't know enough to say much.
Check out http://indiasanitationportal.org/.../statecity-news/gujarat.
http://www.business-standard.com/article/opinion/arvind-panagariya-narendra-modi-s-real-report-card-113102801007_1.html
My initial reaction:
I am sorry to say Aravind is a hack. I have disagreements with folks, but when I heard this man for the first time some seven years ago, I was thoroughly let down.
Taking his lines one by one and finding faults is a waste of time. He is a man of crdentials with bureaucrtic success, like Nick Stern but with a thousandth of Nick's competence.
Maybe the tenth. Why should I play Nick up so much?
Give economists some numbers and s/he will give you any story you pay for.
Been ther, done that.
Taking his lines one by one and finding faults is a waste of time. He is a man of crdentials with bureaucrtic success, like Nick Stern but with a thousandth of Nick's competence.
Maybe the tenth. Why should I play Nick up so much?
Give economists some numbers and s/he will give you any story you pay for.
Been ther, done that.
------------
Someone else posted disagreement with Panagariya and a praise for Bhagwati. So my answer:
Bhagwati was my teacher and had an animus toward Sen for decades. Panagariya can't match him in any way.
Sen isn't fraud, he is a philosopher with frequent errors in empirical work with numbers and interpretation. He and JNB have ideological feuds that can only be understood as 1960s CPM vs Swatantra Party (though neitherwere party members).
At one level, their disagreements are simple - AKS says, "You can't have sustainable growth without humnac capital." JNB says, "You won't have the money to invest in human capital if you didn't have tax revenues from growt." To describe AKS as an egalitarian and JNB as a proponent of trickle down is crude; neither has much knowledge and understanding. They move around in high penthouse circles, read academic claptrap and give lectures or fight.
Panagariya probably carries JNB's water bottle. I would rather listen to Ted Cruz any day.
Sen isn't fraud, he is a philosopher with frequent errors in empirical work with numbers and interpretation. He and JNB have ideological feuds that can only be understood as 1960s CPM vs Swatantra Party (though neitherwere party members).
At one level, their disagreements are simple - AKS says, "You can't have sustainable growth without humnac capital." JNB says, "You won't have the money to invest in human capital if you didn't have tax revenues from growt." To describe AKS as an egalitarian and JNB as a proponent of trickle down is crude; neither has much knowledge and understanding. They move around in high penthouse circles, read academic claptrap and give lectures or fight.
Panagariya probably carries JNB's water bottle. I would rather listen to Ted Cruz any day.
----------
Then the original poster challenged me to rebut Panagariya's conclusions:
As I said, I find Arvind below my intellectual dignity to even criticise. But I can put out some fundamental problems with this rhetorical nonsense that flows from "eminent economists" whose brains stopped years ago.
For one, poverty comparisons that do not take into account different consumption baskets and price structure. Poverty of the salt producers in Kutchh or the western coast of Gujarat is different from that of the urban slum dwellers that from Bihar or Konkan landless laborers.
Two, positives or negatives are difficult to associate with an individual. In particular when there is a mixed economy or, in case of Gujarat, a heavily private-sector oriented economy, a good part of it from investments in other parts of the country or the world (but whose returns to the investor get counted as Gujarati income if s/he is resident there.) When folks came down on NaMo for low nutrition levels, I did argue that the poor chap had little to do with it, that social and economic injustices are deeply ingrained in Indian culture and there are many reasons the poor are also victims of mal/under-nutrition. (One of which is urbanization and different consumption basket, price structure, etc.) So, Arvind's writing about NaMo report card is pure bakwas and would have been even if it concluded the opposite. (You may remember I didn't like the report from the RBI Governor's committee either. Perhaps that exchange was on the Dianuke site and not with you.)
Third, there are many determinants of nutrition and weight, and government actions as such play no direct role unless there are special rations and school meals. India's first school meal program was started in Gujarat by the Congress CM Madhavsinh Solanki and what you might be seeing in the ICDS data is that the NEXT generation of children - i.e., children of those who got school meals in the 1970s and 1980s - are simply healthier children and suffer less events of weight loss. It may also be that this subsequent generation effect also shows up in greater school enrollment rates, in turn contributing to a long-term trend of virtuous cycle.
Fourth, the Muslim poverty rate is difficult to analyze without additional demographic data. Could be that poorer Muslims have left Gujarat. Or that Muslim businesses have concentrated in some sectors - say, poultry-farming and selling eggs and chicken, which pious Gujaratis merrily eat but would not stoop to killing the birds - that have grown rapidly along with the wealth.
I don't know where to stop. Yes, Arvind is just the most moronic Indian economist I have had the pleasure to listen to, but there are many more of them.
There is a market in nonsense. Nicholas Stern down. Panagariya is crowing about the "Gujarat story". Without knowing a bit about Gujarat history. That Gujarat didn't exist until 1960 and that the entrepreneurs of Mumbai took away some of the talent from southern Gujarat, Saurashtra and Kutchh and in turn created a "Gujarat story" that is essentially Mumbai in origin (with Gujarati speakers and readers distributed among Parsis, Muslims, Hindus, Christians because of incomes and education levels).
It is Bhagwati - from Ahmedabad but a Mumbai student, then in Cambridge - who has this imagined "Gujarat story" of market liberalism that Panagariya has been parroting and BJP has found useful. A lot of Bhagwati's passion, in turn, derives from his opposition to Sen's "Kerala model", again equally imagined (but attractive to a Bengali with fondness for Communism because in the late 1950s, CPM had the power in Kerala).
So these are Central Planning vs. Market Liberalism fights of two overly arrogant men in their 80s. I don't think they or their chamchaas (Panagariya) will have an iota of a difference in the polls. Economists like roaming around with puffed chests and crowing "It's morning, it's morning", then believing it's them who wake the world, not sunlight.
Roosters also have to be made into dinner.
------------
They were looking for state GDP growth rates, remembering Punjab used to have the highest GDP per capita in 1991. My response:
Don't bother with state GDP per capita (can be looked up easily on the web). Distributional issues are more important for electoral politics and the HDI indicators of Gujarat are disappointingly low, at least until 2010 when I last looked.
Anyway, there is no denying Gujarat growth, or for that matter most other states'. What I found interesting was that the the delta or the second delta in some cases was lower for Gujarat than for other states in both state GDP as well as other indicators.
But then, too, I know how these indicators are derived and what the conceptual and methodological issues are, so inter-state comparisons need to be made carefully and not for the purposes of boasting or ashaming.
Gujarat government also is said to facilitate new ideas from NGOs; I don't know enough to say much.
Check out http://indiasanitationportal.org/.../statecity-news/gujarat.
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