Economic Democracy through Pro-poor Growth (review)

South Asia as a region has several commonalities. Several countries, including India — the emerging giant from the region — Bangladesh, Pakistan and Sri Lanka, share a common history as erstwhile colonies of the British and gaining independence at around the same time. Indeed, they could be said to share a common culture too. Post-independence, they undertook broadly comparable development strategies with an emphasis on central planning and industrialization. With such strategies not yielding the desired results, somewhere around the beginning of the 1980s, a course correction in their policies came into play, with most of these economies gradually opening up and liberalizing. Having travelled along the path of economic reforms for an effective two decades now (albeit separately), South Asia, on the whole, has grown by nearly 6 per cent per annum on average over this period. Despite such growth rates, which appear to be impressive by all means, the region disturbingly still remains home to the world’s “largest concentration of poor people with nearly 500 million people living on less than $1.25 a day” (World Bank, 2011).¹

While concerted and coordinated efforts are being taken at all levels — national, regional and international — to address the growing polarization in these countries (which appears to have become an endemic problem in all countries embracing “neoliberal” economic growth prescriptions), a group of social activists and scholars from South Asia have been trying to develop an “alternative paradigm” (over the last two decades) that challenges the existing set of “mainstream development” strategies and the set of assumptions it operates on. Their ideas seem to emanate from their conviction that “top-down approaches” to economic development that have been (and are being) practised have “failed” to “trickle down” and ensure “distributive equity”, which forces one to look beyond conventional growth models to address and eradicate poverty. The South Asian Perspectives Network Association (SAPNA), established in 1984, has been in the forefront of this “alternative paradigm”, with the network having come out with eight back-to-back studies that lay out the policy options to achieve economic growth and equity. The most recent compilation of the case studies coming out of this network is Economic Democracy through Pro-poor Growth. Through a series of illustrative case studies drawn from the field across five different countries in South Asia, this book offers a refreshing alternative perspective of economic development that seeks to convince the reader of the feasibility of a world that one would commonly disregard as utopian.

The concept of “pro-poor growth” has gained increasing attention since the 1990s, when there were concerns over the growing trade-offs between growth and equity. Though there is no consensus yet among academics or practitioners as to what the exact definition of “pro-poor growth” is (or should be), there seems to be a greater convergence among them on the broad contours of such an idea. To be sure, the central focus in this literature has been on generating growth that provides and expands the “opportunities and capabilities” of the poor which would in turn enable them to “participate” and benefit from productive economic activities (Saad-Filho 2002; Ravallion 2004; Ludy 2008; Wiggins and Higgins 2008). The most influential theoretical premise that comes to mind is Amartya Sen’s Capabilities Approach, which suggests that the most important objective of development should be the expansion of human capabilities (Sen 1985; Clark 2006).

As the literature in the field points out, there are two possible ways of thinking about “pro-poor growth” — the first one in absolute terms and the second one in relative terms. The absolute definition implies that a growth process can be termed pro-poor when it dents absolute poverty even if it means that the benefits that the poor reap from such policies are proportionally less than their non-poor counterparts. The relative definition stresses the equality aspect where the objective is to minimize the gap between the mean income of the poor and the mean aggregate...