Do Literacy And Health Spark Growth?


By Amartya Sen

Knopf 366pp $27.50

When economist Amartya Sen was growing up in Bangladesh, a poor Muslim day laborer stumbled into the garden where Sen was playing. Bleeding profusely and screaming, the man said that he had been knifed by some thugs in the largely Hindu neighborhood. Sen, just 10 years old, fetched him water, and his father rushed the victim to the hospital. Before he died, the man moaned that his wife had warned him not to go into a hostile neighborhood, but because his family had nothing to eat, he had to take any job he could find. "The experience was devastating for me," Sen says. "The penalty of his economic `unfreedom' turned out to be death."

Nearly a half-century later, Sen, who in 1998 received the Nobel Memorial Prize in Economic Science for his studies on the causes of poverty and famine, is still moved by the extreme want he witnessed as a youth. Long recognized as one of the most compassionate voices in development economics, the Cambridge University dean has just completed a book, Development as Freedom, that presents a new approach to combating these ills. Traditionally, success in the fight against privation has been gauged by the rise in income levels. But Sen argues that economic growth translates into better, longer lives for people only if governments embark upon well-thought-out social-development programs that guarantee certain liberties: freedom from hunger, illiteracy, premature death from lack of health care, and the tyranny of undemocratic governments, which tend to ignore the poorest.

It's a refreshing, thoughtful, and human approach, and this idea-laden book is sure to spark renewed debate. For some time now, many governments have taken a hands-off, free-market attitude toward poverty: The globalization of the world economy, they say, should spur growth and incomes, lifting up the poor. East Asia was the poster child: There, economies grew 7% to 10% annually from the mid-'70s to the mid-'90s, and severe poverty was reduced from 60% of the population to 20%. But the recent financial crisis shows that globalization can be a two-edged sword for countries not fully prepared to compete. The World Bank says as many as 60 million Asians may fall back onto the lowest rungs of the income ladder.

Ultimately, though, East Asia should do well, Sen says. Why? During the years of high economic growth, its governments invested heavily in schooling and medical care--even before they had conquered poverty. That, argues Sen, refutes the belief "in some policy circles that human development is really a kind of luxury that only richer countries can afford." On the contrary, poor nations cannot afford to ignore social ills if they want to be competitive today.

But many governments, under pressure from the International Monetary Fund to cut their budgets, have postponed social spending. That's a mistake. "If the world's population is half illiterate, and women are kept in their households, then you will have a world in which globalization opportunities are seized by some but completely useless, or maybe even worse, for others," he says. To illustrate the point, he contrasts China and India. "While pre-reform China was deeply skeptical of markets, it was not skeptical of basic education and widely shared health care," Sen notes. So when China began turning to open markets back in 1979, it already had a well-educated workforce. Not so in India, where the introduction of market reforms in 1991 found half of India's adults illiterate and therefore less able to seize the opportunity.

Sen has been criticized for taking too broad an approach. Indeed, this book's wide-ranging discussion of everything from military spending to food production is dense in parts and may appeal more to academics and policymakers than to general readers. But Sen's optimism and no-nonsense proposals leave one feeling that perhaps there is a solution. Readers may feel they're sitting in on one of his university lectures, complete with colorful references to Charles Dickens, Adam Smith, and Aristotle. Still, the abstractness of Sen's "freedoms" argument sometimes leads to apparent contradictions: While he criticizes repressive China for its one-child policy, he praises its record on education and health care, leaving one to wonder whether Sen is right about democracy's key role in the eradication of poverty.

Do Literacy and Health Spark Growth?

Although the sheer numbers of people living in poverty seem overwhelming--at least 3 billion subsist on less than $2 a day--Sen is optimistic that real progress can be made over the next few generations. "It's within our power to eliminate poverty," he told me during a recent telephone conversation. "But whether we do it or not depends on whether we seize the problem the right way." The world's "rich" nations can help by moving ahead with debt-pardoning schemes, so that countries, such as many in Africa, are not forced to spend as much as 40% of their income on debt service, Sen says. But governments in developing countries also must cut back on military spending and corruption and spend more on health and education, especially for women.

In the end, he says, it boils down to why countries seek economic growth in the first place. In Sen's mind, such growth and development are meaningless unless they enhance "our capability to lead the kind of lives we have reason to value."

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