Dealing with inequality
Rapid economic progress leads to a demand for much greater participation in politics
Persistent inequality of different kinds is not good for development. If those who are at the bottom of the income distribution scale don’t see any particular improvement in their situation relative to those who are better-off, it builds up resentment. In those situations where political institutions are poorly developed, relative deprivation usually shows itself in the form of agitation. It retards political progress, a fact pointed out by the Harvard University’s political scientist, Samuel P Huntington, decades ago in his seminal work, Political Order in Changing Societies.
I came to know Huntington well during my seven years of off-and-on stay at the Harvard University. He included me in a team of half a dozen scholars he had assembled to study the interaction between political change and economic development in developing societies. I was the only economist and the only non-American on the Huntington team and we talked at some length about the experiment President Ayub Khan had begun right after taking over the reins of power. The discussion about Pakistan took place about the time the Ayub regime was celebrating what it called the decade of development.
Pakistan was not the only place where the success of the model of development adopted by the Ayub Khan government was being celebrated. This was also happening in Harvard that had published a number of books authored by the economists sent out by the university to help Pakistan develop its economic strategy. Notable among the books that appeared was Gustav F Papanek’s book titled Pakistan’s Development: Social Goals and Private Incentives. A long quote from the opening pages of the book will help us understand the way an important segment of the international community viewed Pakistan. “At independence, Pakistan — simultaneously created and disrupted by the partition of British India — was widely considered an economic monstrosity. The country was among the poorest in the world and had no industries to speak of, almost no industrial raw materials, no significant industrial or commercial groups. It was difficult to see how Pakistan’s economy could grow more rapidly, than its population. Economic chaos and political disintegration seemed more likely. The 1950s was a period of stagnation and mounting problems, when early dire predictions seemed to be fulfilled. Prophets of gloom and doom were disappointed by radical economic changes which began in the late 1950s. By the middle of 1960s, the rate of economic growth was more than double the rate of population growth …In the face of its pitiful resource and capital endowment at independence, and in comparison with other countries, Pakistan’s performance was outstanding.”
Going a bit into Pakistan’s political history helps us understand why those who govern the country at any point in time need to be mindful of how important it is for them to remain focused on the incidence of inequality. I brought to Huntington this passage along with some other assessments by Harvard scholars of the economic situation in Pakistan. He asked me about the pace of political development in the country. I told him that President Ayub Khan had introduced a system that he called “basic democracies” that allowed very limited participation in the political process to the citizenry. “I doubt that such an approach is sustainable,” he remarked. He was of the view that rapid economic progress would lead to a demand for much greater participation in politics. “You will see, people will demand it,” he told me. This is precisely what happened.
The military leader came tumbling down when the political scene was lit by a minor spark — a sharp increase in the price of sugar. People came out on the street, first in Rawalpindi, the seat of the military, and then in other major cities. The Economist, while reporting on the change in Pakistan titled its story, “From Tweedledum to Tweedledee”, drawing the correct conclusion that there was only a change of personnel and not in the system as was demanded by the people. That, as I will discuss next week, was not the case.
Published in The Express Tribune, November 10th, 2014.
I came to know Huntington well during my seven years of off-and-on stay at the Harvard University. He included me in a team of half a dozen scholars he had assembled to study the interaction between political change and economic development in developing societies. I was the only economist and the only non-American on the Huntington team and we talked at some length about the experiment President Ayub Khan had begun right after taking over the reins of power. The discussion about Pakistan took place about the time the Ayub regime was celebrating what it called the decade of development.
Pakistan was not the only place where the success of the model of development adopted by the Ayub Khan government was being celebrated. This was also happening in Harvard that had published a number of books authored by the economists sent out by the university to help Pakistan develop its economic strategy. Notable among the books that appeared was Gustav F Papanek’s book titled Pakistan’s Development: Social Goals and Private Incentives. A long quote from the opening pages of the book will help us understand the way an important segment of the international community viewed Pakistan. “At independence, Pakistan — simultaneously created and disrupted by the partition of British India — was widely considered an economic monstrosity. The country was among the poorest in the world and had no industries to speak of, almost no industrial raw materials, no significant industrial or commercial groups. It was difficult to see how Pakistan’s economy could grow more rapidly, than its population. Economic chaos and political disintegration seemed more likely. The 1950s was a period of stagnation and mounting problems, when early dire predictions seemed to be fulfilled. Prophets of gloom and doom were disappointed by radical economic changes which began in the late 1950s. By the middle of 1960s, the rate of economic growth was more than double the rate of population growth …In the face of its pitiful resource and capital endowment at independence, and in comparison with other countries, Pakistan’s performance was outstanding.”
Going a bit into Pakistan’s political history helps us understand why those who govern the country at any point in time need to be mindful of how important it is for them to remain focused on the incidence of inequality. I brought to Huntington this passage along with some other assessments by Harvard scholars of the economic situation in Pakistan. He asked me about the pace of political development in the country. I told him that President Ayub Khan had introduced a system that he called “basic democracies” that allowed very limited participation in the political process to the citizenry. “I doubt that such an approach is sustainable,” he remarked. He was of the view that rapid economic progress would lead to a demand for much greater participation in politics. “You will see, people will demand it,” he told me. This is precisely what happened.
The military leader came tumbling down when the political scene was lit by a minor spark — a sharp increase in the price of sugar. People came out on the street, first in Rawalpindi, the seat of the military, and then in other major cities. The Economist, while reporting on the change in Pakistan titled its story, “From Tweedledum to Tweedledee”, drawing the correct conclusion that there was only a change of personnel and not in the system as was demanded by the people. That, as I will discuss next week, was not the case.
Published in The Express Tribune, November 10th, 2014.