by Arvind Subramanian, Peterson Institute for International Economics
Op-ed in the Business Standard, New Delhi
March 28, 2012
© Business Standard
The evenhandedness that stems from Katherine Boo's natural and abundant empathy is one of the many appeals of Behind the Beautiful Forevers, her gorgeous book on one of Mumbai's slums, Annawadi. Thus, both cassandras-cum-state interventionists such as Amartya Sen and hope purveyors-cum-market enthusiasts such as the late management guru C. K. Prahalad can claim vindication in the book.
Life at the bottom of even a growing pyramid, Boo shows us, can be nasty, brutish, and, sometimes self-inflictedly, short. One young girl, after routine toilet-side socializing, proceeds to commit suicide because the only real freedom that life affords is the ability to terminate it.
And yet, India's generalized economic dynamism, which allows the book's teenage protagonist, Abdul, to support a family of 11, leavens life with hope and entrepreneurial possibilities. Prahalad's point was that the poor had exploitable purchasing power, and the explosive sales of cheap and small-sized sachets of washing powder, paan and other consumables over these last few decades seemed corroborative evidence. Boo's book shows that the Prahalad strategy works in part because the poor can acquire purchasing power in unlikely ways.
First, by hustling in waste: One might say that for many Annawadi residents, life is all about crap and scrap. In a nice twist, globalization plays a key positive role in this hustling. When global commodity prices boom, so does the value of commodity-related waste—aluminum, plastic, copper, steel—the scavenging for which provides sustenance for the slum dwellers. Similarly, when foreign tourist traffic slows down, the supply of waste declines, thus depressing slum incomes. Blinkered to the lives of the marginalized, we instinctively equate globalization with the free flow of goods, forgetting that "bads" such as detritus—which are not bad at all for the poor—are globalized too.
Second, the poor acquire purchasing power by partaking of the venality and corruption of those in power. The book is a reminder that the perpetrators of corruption are not its exclusive beneficiaries. As Boo writes: "For the poor of a country where corruption thieved a great deal of opportunity, corruption was one of the genuine opportunities that remained."
The trickle-down of public funds looted is a source of income for some of the poor. Electoral politics compels venal politicians to share their loot even if, or especially because, it is ill-gotten. After all, Jayalalithaa and Karunanidhi have spread TV ownership in Tamil Nadu despite their motives and means being thoroughly dubious. Trickle-down must also occur because of the pseudo-accountability required of poverty interventions. To allow donors to feel good about themselves, they must see firsthand the changing reality on the ground. Some collateral benefit, even if cosmetic, is unavoidable.
But the most important and depressing development insight that Behind the Beautiful Forevers offers is this: The related pathologies we variously call weak public institutions, ineffective governance, and corruption are especially costly, and most difficult to escape from, for the poorest.
Boo perceptively notes that succumbing to the narrative of jugaad—the creative entrepreneurial spirit associated with circumventing regulation and corruption—growth-addled India is in danger of overlooking the colossal costs for the poor of deteriorating Indian governance. And her explanation of these costs is novel. It is not just that navigating, say, the Indian judicial system can be time-consuming, financially draining, and livelihood-destroying. The Indian system severs the link between effort and result, engendering deep despair: "‘We try so many things,' as one Annawadi girl put it, ‘but the world does not move in our favour.' "
Worse, since life at the bottom has a dog-eat-dog quality, a collective action trap condemns the poor to coping with, rather than having any chance of reforming, India's institutions. "Instead of uniting, poor people competed ferociously with one another for gains as slender as they were provisional," Boo writes. As a result, "the gates of the rich, intermittently rattled, remained unbreached... The poor took down one another and the world's great cities soldiered on in relative peace."
What does all this have to do with China? Behind the Beautiful Forevers is a salutary warning against a serious misreading of China's phenomenal growth experience. Within China, all the preoccupation is with the need for reform and the rollback of the state. That is entirely appropriate because China's state continues to be an economic drag and a political yoke.
But what distinguishes China from other countries is not that it has turned more to markets than others. Indeed, quite the opposite is true: On every measure of market reform—be it privatization of state-owned enterprises, deregulation of domestic and foreign finance, or liberalization of trade—China lags countries in Asia, Africa, and Latin America. What distinguishes China is that in the Communist Party, it has had a resoundingly effective state/public institution, better than in any other part of the developing world, with regard to delivering certain essentials for development: social stability; rule of law; basic services such as health, education, and sanitation; and enviable physical infrastructure. And these essentials have protected those at the bottom of the heap while facilitating transformational possibilities for them.
Katherine Boo's book suggests that in India, both market enthusiasts and the current standard-bearers of equity miss the important point. Annawadi is not lacking in thriving markets—for waste, for female flesh, and for justice in which "innocence and guilt could be bought and sold like a kilo of polyurethane bags." Annawadi is not lacking in well-intentioned state intervention either: For example, public funds for improving education are amply provided and minimal female political representation in local institutions is also guaranteed.
The book contains a particularly important message for those who have monopolized the ear of the Indian government's key leaders, and who place their hopes for the poor in financial handouts and empowerment through legal rights. The benefits of these targeted efforts for most Annawadi residents are largely illusory. What they need is some basics from the state, as in China: teachers showing up in schools, less police harassment, and access to basic sanitation and running water. Provision of these basics would enable the Hobbesian threshold to be crossed so that life at the bottom of the scrapheap can cease to be nasty, brutish, and short.
If his house were a little less crooked and less crumbling, and the land on which it sits a little less uneven, Boo seems to imply, young Abdul's life could be bright even if not beautiful forever.
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