by Pranab Bardhan
In the middle 1990’s my friend from the September Group, Sam Bowles, and I were invited by the Chicago-based MacArthur Foundation to form an inter-disciplinary and international research network to study the effects of Economic Inequality, with the two of us as co-Directors. I have known Sam for nearly four decades now. He is one of the brightest economists I know, with a large vision and wide-ranging interests that are often lacking in many bright economists. His landmark 2013 book Cooperative Species with his frequent co-author Herb Gintis uses experimental data and evolutionary science to show how genetic and cultural evolution has produced a human species where large numbers make sacrifices to uphold cooperative social norms. He himself has been socially alert and active in public causes all through his life, starting from writing background papers for Martin Luther King’s 1968 Poor People’s March to most recently providing leadership in the revamping of undergraduate Economics curriculum to include upfront non-standard issues like inequality, the environment and reciprocity and altruism in human behavior, and making it available free online worldwide. He is also one of the most generous and genial people I know.
When his father was US Ambassador to India, his parents sent him to a local Indian school, which at that time did not even have a building, only a large tent. Prime Minister Jawaharlal Nehru, his father’s friend, once invited the family to tea in the garden at his home, and encouraged him and his siblings to explore the interior of the house. At that time he discovered in Nehru’s bedside table a framed passage from Robert Frost’s poem (“I have promises to keep/And miles to go before I sleep”), which the 11-year old immediately recognized, as Frost was a fellow New Englander he knew about. He says he was pretty average in his Delhi school, and there were some Indian kids who were smarter, and yet, he asked his mother one day, why were most Indians so poor? (In his small Connecticut hometown where he had grown up there were only two people who were really poor, one was an alcoholic, the other had mental problems). The same question kept on bugging him when about a decade later, after his undergraduate education at Yale, he started teaching in a school in northern Nigeria.
The question that Sam and I posed in our research proposal to the MacArthur Foundation was why inequality, contrary to the impression created in traditional Economics as being necessary for the incentives for people to strive for economic prosperity, can actually be quite harmful for the economy; in many important situations equity and efficiency can be complementary. In particular we spelled out the need for theoretical and empirical work in both rich and poor countries on four questions:
How do inequalities affect the efficiency and productivity of farms, firms, and other entities, and are there more efficient forms of governance that can be promoted?
How does inequality affect cooperation in local communities, and thus have an impact on the local environment and other public goods, like neighborhood safety and other residential amenities, irrigation water, fisheries, forestry, and grazing lands?
How do economic disparities among citizens affect bargaining, policy making, and economic performance at a national level?
What principles can guide the design of efficient and politically viable policies to alleviate poverty and enhance economic opportunity for the less well-off?
Our network had economists, sociologists, anthropologists and political scientists from different countries, looking at these questions from different angles. Some of the economists in our group have now become quite well-known, like Thomas Piketty from Paris or the recent Nobel laureates like Esther Duflo, Abhijit Banerjee and Michael Kramer from Cambridge, Mass. Our group funded some of the early work of Piketty in the tax archives in France, just as we funded a lot of the experimental work of those Nobel laureates in India, Kenya and elsewhere. (Esther was the youngest member of our group, she had not yet finished her Ph.D. at MIT when she joined). We also had well-known sociologists like Erik Olin Wright, anthropologists like Katherine Newman and political scientists like Adam Przeworski.
The group was generously funded by the MacArthur Foundation for more than 10 years starting from the middle 1990’s, and administered by the Institute of International Studies in Berkeley. Twice a year we had meetings in different parts of the world, where we presented our research results for critical scrutiny and also invited other scholars working on related subjects to present their results. In the US we mostly met in Berkeley, Chicago or Cambridge, Mass., but we also met in some developing countries, including in Beijing, Delhi, Rio de Janeiro and San José (Costa Rica).
We had taken a decision to let individual authors to publish their research papers as they saw fit; we had no collective output where our results were centralized (except in a summary form for our periodic research reports to the Foundation). A few of us did edit some collections of essays, like Sam and I (and the late Michael Wallerstein) edited a volume on Globalization and Egalitarian Redistribution and (with Jean-Marie Baland) a volume on Inequality, Cooperation and Environmental Sustainability, both published by Princeton University Press; Abhijit Banerjee, Roland Bénabou and Dilip Mookherjee edited a volume on Understanding Poverty, published by Oxford University Press. Looking back, not having a central reference volume or point of publication for the whole group may not have been a wise decision, as in its absence many people now do not know that some of the major work on inequality was done under the auspices of this network, long before the current upsurge in work on inequality.
My own research work in this network was mainly of two kinds. One was the study of the impact of inequality on cooperation in management of irrigation water particularly in resolution of water conflicts among farmers (both the theoretical and empirical work was published as some chapters in my 2004 book Scarcity, Conflicts and Cooperation published by MIT Press), and on some empirical projects on deforestation in the Himalayan foothills (in collaboration with Dilip Mookherjee). The second kind was on the political economy of governance, in particular with respect to decentralization, in a large multi-year project with Dilip Mookherjee. We collected detailed survey and administrative data from 89 villages in West Bengal and analyzed them and published papers in journals both in India and abroad. In 2006 Dilip and I edited a collection of essays on decentralization in different countries in Asia, Africa and Latin America, titled Decentralization to Local Governments in Developing Countries: A Comparative Perspective, published by MIT Press.
As a political and institutional economist I had been interested in decentralization for a long time, as I was skeptical of the easy reliance of my leftist friends on the top-down or centralized state. (Among the major leftist political leaders in India a persistent advocate of decentralization was E.M.S. Namboodiripad, who was the Chief Minister of Kerala in 1957-59 and again in 1967-69. When I was in Kerala K.N. Raj introduced me to him, I did not have much chance to talk with him, but I had read several of his articles on decentralization). Yet, unlike some Gandhians and other communitarians I knew, I was wary also about the pitfalls of local governments and communities. Some of these conflicting issues needed detailed empirical work to resolve.
I knew Dilip had been interested in theoretical issues of decentralization in the context of corporate governance of a firm. I talked intensively with him to make him interested in issues of decentralization in the context of development governance. I consider it as some achievement on my part to persuade an accomplished theorist like Dilip to take the plunge in the messy matter of village data collection and analysis to glean insights on the pros and cons of decentralized development. West Bengal at that time provided an appropriate locale for this research, as the ruling Left government in West Bengal had carried out some significant steps toward decentralized governance. With some local collaborators (particularly Sandip Mitra at the Indian Statistical Institute) we carried out large-scale village and household surveys in West Bengal, mainly to study the impact of elected village councils (panchayats) on land reforms and various types of anti-poverty programs, along with general agricultural performance.
Apart from our own research, for more than 10 years the 18-member MacArthur network gave me the opportunity to interact with some of the finest minds in social science, and to benefit from the extremely high quality and analytical rigor of the discussion. There was quite a bit of differences of opinion, cogently argued and expressed, examined and dissected, but there was a degree of convergence on some passionate intellectual commitment to do something about the excruciating problems of inequality and social injustice in the world.
For me my work with Dilip in West Bengal was also in some sense a continuation of my earlier work there with Ashok Rudra when we had tried to understand the various land relations and institutions at the ground level on the basis of surveys of 110 sample villages. Even as the MacArthur projects ended, Dilip and I continued studying some of our sample villages. Altogether about 3 decades of detailed micro-level village survey data analysis had given me some understanding of the ground realities in West Bengal economy and polity.
The Left government ruled West Bengal much of this period, continuously for 34 years (1977-2011)—an unprecedented case in the world of a democratically elected communist party rule, over a size of population much larger than that of France or UK, at the state, district, municipal and village council levels. To be frank, it was not really a communist party except in rhetoric and some Leninist methods of intra-party discipline and control; on major policies it was trying at best to be a social democratic party. On the basis of my perception of the ground realities and citing our survey data I wrote often in the popular Bengali newspapers about things that the Left government was doing right, and more often doing wrong or doing an inadequate job. The young people who were working in our village survey team often reported to me how they saw even in remote villages people at tea stalls were discussing my articles, with the newspaper pages open in front of them. I personally knew many of the leaders in the government (including top Ministers), and needless to say the leading Left Party often bristled at my pieces. (One Minister openly told me: “Our Party does not consider you a friend”; I told him that I was not keen on the Party’s friendship, but I wanted it to pay attention to what I was saying for its own good).
Let me narrate now some of my intensive interactions with the Party particularly in the 1990’s and the decade after. Once in Kolkata in the early 1990’s I got a phone call from the personal secretary of the Chief Minister Jyoti Basu; he said that at that time it so happened that both Amartya Sen and myself were in Kolkata, so the Chief Minister wanted to take this opportunity to have a lengthy discussion with the two of us together. We agreed and went one morning to a hotel room where he and some Party leaders and Ministers were present in a small private gathering. He said that after the fall of the Soviet Union they wanted to understand which way things were moving, and if and how their Party should change directions in the face of this storm. Amartya-da wanted me to start.
I decided to take this opportunity to be quite blunt, particularly as the media were not there, and discussed the international situation rather cursorily, and concentrated on the kind of mistakes and wrong directions in my judgment they were taking in West Bengal. I spoke for almost an hour; the leaders were mostly silent, except for occasional interruptions by the Chief Minister, who pleasantly surprised me by mainly agreeing with me and even giving examples from his experience to supplement some of the points I was making. Then Amartya-da spoke, and after that general discussion followed. I was struck by the remarkable measure of agreement in the room or at least silence on the part of those who disagreed. The meeting went on, with a short lunch break, until late in the afternoon, when the Chief Minister excused himself as he had to go and give a public speech in a large gathering in the city center. Next morning I read the Chief Minister’s speech in the Party newspaper; it was full of the usual stale rhetoric and catechisms. I noted the gulf between their public front and the internal unsettled state of thinking. Later I also faced the same public front from other Ministers when I spoke in public panel discussions with them on different occasions.
Another time an important Minister (Nirupam Sen, who rose in the Party from the grassroots level and whom I found out to be one of the most thoughtful among the leaders) called me and said that he’d like to come over to my apartment in Kolkata and privately discuss various controversial issues arising at that time out of land acquisition for building new industries. We had a good and candid discussion. A few weeks later the Bengali newspaper where I used to write arranged for a long conversation between me and Nirupam Sen, and with only some small changes requested by Sen, they published the transcript. This was in 2009, and I could see that by then the days of the Left Party were numbered. Nirupam Sen showed me some unpublished articles he had written on the issues we discussed—he said even if their Party were to be defeated in the next election he wanted to leave for posterity some evidence that he had thought through some things, just could not implement them.
One of the central contradictions I have repeatedly pointed out to the Party leaders was that they, and particularly their militant trade unions, were anti-capitalist in their ideology, and yet they had not shown in their programs and actions any viable positive alternative to capitalism. For example, the Left in India have very few successful cases of running cooperatives or other such non-capitalist organizations like worker-owned or –managed firms or farms on any large scale. Their usual slogans for nationalization and state take-overs of firms are not credible any more with a long history of state failures in business where there is competition, and in the case of some public monopolies the profits, if any, are often dissipated in different forms of political patronage distribution. Successful management of some state firms under leftist rule would have improved their credibility and created useful examples for people to look up to.
After the Party was defeated in 2011, Dilip and I analyzed the reasons for the defeat from some data and opinion polls in our subsequent village surveys. I also wrote up a couple of pieces in the popular Bengali press. After the fall of the Soviet Union I had written an article in EPW titled “The Avoidable Tragedy of the Left in India”; after their defeat in West Bengal I wrote up a sequel to the earlier article there. Now, of course, both the Left and the Liberals in India (along with assorted Gandhians) are facing an even more harrowing tragedy with the triumphal march of the marauding Right pushing the agenda of hateful sectarianism and tyranny.