Economic Growth and Development

(singke) #1

unemployment. The ribbon loom was resisted Europe-wide in contrast to its
more rapid adoption in Lancashire, England after 1816. In France and else-
where printing and cotton textiles were among the industries in which new
techniques were successfully resisted by pressure groups (Mokyr, 1990: 258).
One solution could be for the government to allow the innovation and then
tax the beneficiaries to compensate those losing out. There are parallels here
with the conflicts in contemporary India surrounding compensation for agri-
cultural land acquired for conversion to industrial use (Chapter 10). In India
the huge number of those potentially losing out (thousands of small farmers
and landless labourers) and the weak capacity of the state make this a very
difficult task. In some historical cases landlords allowed industrialization;
some grew rich from coal mining or building factories on their large aristo-
cratic estates. In other cases they opposed industrialization for fear this would
create a new class of politically influential industrialists. Remember Chapter 7.
The Chinese undertook seven major naval expeditions in the early fifteenth
century to explore the Indian Ocean. The expeditions comprised hundreds of
vessels and tens of thousands of men but came to an abrupt halt in the 1430s,
and further maritime adventure was banned. The rise of merchant-traders was
feared by traditional groups in the court as a threat to their powers (Landes,
1998).
Chapter 6 discussed an effort to improve the quality of basic village-level
health care in rural Rajasthan, India. Here there was no obvious shortage of
primary health care facilities or qualified staff. The NGO Seva Mandir moni-
tored the attendance of nurses with time-clocks,using the data to fine staff for
excessive absence. Over the first six months staff attendance doubled and after
sixteen months attendance dropped back to its original low levels. Over time
the political influence of nurses proved more potent than any pressures from
the poor who actually used the health system. This, according to Acemoglu and
Robinson (2006) demonstrates the difficulty of implementing meaningful
changes when institutions are the cause of the problems in the first place. The
problem was that institutions were controlled by an elite and used to distribute
resources to that same small elite, which here included government-employed
health care professionals. Banerjee and Duflo (2013) have a less pessimistic
view of this case study. The underlying problem, they argue, was not deep
political economy but the fact that the ‘official job requirement was crazy’.
Nurses were expected to come to work six days a week, sign in, walk up to
three miles a day to reach a distant hamlet in baking temperatures and go from
house to house to check the health status of women and children. After five or
six hours of this, then to walk back to the health centre, sign out and take a two-
hour bus home. The more mundane problems were those job requirements that
were developed without any regard to local conditions and lazy thinking at the
stage of policy design. Banerjee and Duflo argue that promoting good policies
can in turn promote good politics; or in the language of this book,good policy
can promote good institutions. Big changes can result from sustained efforts to
invite more people to village meetings to discuss local service provision, by


296 Patterns and Determinants of Economic Growth

Free download pdf