INDIAN INEQUALITY

Oxfam India’s latest report revealed that 84 percent of the country suffered a decline in wealth in 2022, even as the number of billionaires grew from 102 to 142. The report notes reduced state investment in public education and healthcare, along with an increased reliance on indirect rather than corporate taxes to raise revenue. 

In their 2013 book, JEAN DRÈZE and AMARTYA SEN analyze the aftermath of the liberalization of India’s economy in the early-1990s, arguing that even as the country recorded major growth, it had fallen behind in living standards. 

From the book:

“Contrary to the increasingly used rhetoric which suggests that India is well on its way to becoming an economic ‘superpower’, this is far from the real picture, even in terms of per capita income. In fact, despite rapid economic expansion in recent years, India remains one of the poorest countries among those outside sub-Saharan Africa. According to the World Bank, only 15 countries outside sub-Saharan Africa had a ‘gross national income per capita’ lower than India’s in 2011: Afghanistan, Bangladesh, Burma, Cambodia, Haiti, Kyrgyzstan, Laos, Moldova, Nepal, Pakistan, Papua New Guinea, Tajikistan, Uzbekistan, Vietnam and Yemen. India does indeed have a large gap in world living standards to overcome, as was discussed in the last chapter. What is disturbing, given the past, is not India’s comparatively low position in terms of income per head among the countries in the world outside sub- Saharan Africa, but how badly India does in terms of non-income features of living standards even within this group of poorest non-African countries.”

Link to the text.

+  “Liberalization and high growth in India drove inequality upwards after the 1980s, due to the pattern of private investment, the less interventionist state and a rather flexible labour market.” A 2018 article by Gerry Rodgers. Link. And Sripad Motiram and Karthikeya Naraparaju study why economic growth in India has not been inclusive. Link. 

+  “The inability or unwillingness to to collect taxes from large corporations and rich individuals has several adverse consequences.” C.P. Chandrasekhar and Jayati Ghosh on India’s corporate tax laws. Link. 

+  “The picture that emerges is one of comprehensive and persistent disadvantage for the scheduled caste and scheduled tribe groups in contemporary India.” Vamsi Vakulabharanam and Ajit Zacharias on wealth inequality and caste divisions. Link.

NEW RESEARCHER

Latrine Construction & Water Quality

KAZUKI MOTOHASHI is a PhD candidate in the Economics and Public Policy at Tufts University. In a recent paper, he examines the negative externalities of latrine construction on water quality and health in India.

From the abstract: 

“Developing countries have increased sanitation investment to reduce diarrheal diseases. However, the direct health benefits of latrine construction can be offset by water pollution and negative health effects due to poor treatment of fecal sludge. I estimate these negative externalities of a sanitation policy in India that subsidized the construction of over 100 million latrines. Exploiting geographical variation in soil characteristics and the differential increase in latrine coverage across districts, I find that the policy increases river pollution by 72%. While it reduces diarrheal mortality overall, this positive health effect is two-thirds smaller in areas with lower capacities for treatment of fecal sludge where water pollution externalities are consequently larger.”

Link to the text, link to Motohashi’s website.  

+ + +

+   “Central banks cannot have it both ways: they cannot equally fight both inflationary and recessionary forces if they are to preserve institutional expectations.” New on PW, Manuela Moschella on the Fed, the ECB, and the limits of reputation. Link. 

+   “The first Bush administration continued to link export controls to non-proliferation and proceeded to strengthen trade ties with the PRC, prioritizing American high-tech firms in the wake of the Tiananmen massacre.” Also new on PW, Ella Coon reviews Daniels and Krige’s Knowledge Regulation and National Security in Postwar America. Link. 

+   The International Energy Agency’s new report on the global manufacturing of clean energy technologies. Link. 

+   Matthew A. Kraft, Megan Lane Conklin, and Grace T. Falken examine the labor supply decisions of of substitute teachers in Chicago public schools. Link.

+   “The decade-long, House Republican-driven budget cuts have created dysfunction at the IRS, where relatively few millionaires are now audited.” By Chuck Marr. Link. 

+   Four ways the Biden Administration can ensure offshore wind development benefits tribes and indigenous people. Link.

+  “We show that the case law on the legality of bond purchases by Eurosystem central banks is partly based on the economic theory of monetarism.” From our friends at Dezernat Zukunft. Link to the paper, and link to a thread by co-author Philipp Orphal. 

+   “The Federal Reserve is consistent in its view that low interest rates (and by extension, economic expansion and lower unemployment) is contingent on the radical post-1970s ‘decline in workers bargaining power.’ ” PW contributing editor Tim Barker shares a 1996 memo from Janet Yellen. Link. 

+   “Local authorities, both as landowners and planning authorities, have the opportunity to sidestep the private property trap.” Kate Swade on rural regeneration in the UK. Link. 

+   “This article examines banditry, embezzlement, and other insider crimes along Egyptian railway lines during a period when British officials exerted centralized control over the Egyptian railway and financial austerity had a negative impact on the rail sector. By exploring the motives and tactics of railway crimes, I posit that criminals, by making claims on and use of the technology outside the purview of state regulations, expressed their heterogeneous desires to redistribute social wealth, repurpose the technological promise of modern railways, and confound intentions of colonial governance.” By Xiaoyue Li. Link. 

Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org