Mukti

Bangladesh Paradox

Posted in development, economic history, economics, macro, political economy by jrahman on February 24, 2019

 

A new initiative, led by Asif Shibgat Bhuiyan.

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The middle

Posted in democracy, economics, elections, governance, political economy, politics by jrahman on November 3, 2017

The Middle is an American sitcom about a middle class family’s struggle in the wake of the Great Recession.  I never watched the show beyond the first episode in 2009.  At that time, it seemed to me to be a poor derivative of Malcolm in the Middle and Roseanne.  Facebook tells me that this will be the final season of The Middle.  Maybe I should watch the show.  Set in the mid-western state of Indiana, the protagonist white family might have been just the type that put Donald Trump where he is.  Aristotle wrote that …those states are likely to be well-administered in which the middle class is large.  Some argue that stagnation of the American middle class lies behind the rise of Trump.  I am not so sure — perhaps tribes matter more than class.

I don’t want to spend precious time and energy pondering about the plight of the white American middle class.  Instead, let me talk about the role of the middle class in Bangladeshi politics.  The term Bangladesh paradox is now at least half a decade old, and refers to the idea that Bangladesh has been surprisingly good at improving the lives of its poor despite dysfunctional politics and a stunted private sector — that’s from the Economist.  William B Milam, former American envoy to Dhaka and Islamabad and a keen observer of both countries, often talks about another Bangladesh paradox:

….Bangladesh should have become, over the past 25 years, a modernized democracy, knocking on the door of entry into the middle income category of developing countries. Its economy has grown for most of the last two decades around 5-6 % per year, and its social development indices have improved rapidly and now are generally better than most other South Asian countries except Sri Lanka. Instead, over those same two decades, Bangladesh has regressed along the democracy/authoritarian axis no matter which of the two major parties was in power.

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Missing the mark about feeling good

Posted in development, economic history, economics by jrahman on February 18, 2014

Professor MA Taslim of Dhaka University is my favourite commentator on Bangladesh economy.  I would readily recommend most of his Off the mark columns.  However, even the great have an off day once a while, and Prof Taslim definitely missed the mark with this piece about Bangladesh’s development record.

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Decoding The Bangladesh Paradox — A Research Agenda

Posted in development, economic history, economics, institutions, labour, macro, political economy, trade by jrahman on December 2, 2013

The macroeconomic fact is, in the last decade, under all three governments, per capita GDP have grown by around 4½ per cent a year. At that rate, average real (that is, inflation-adjusted) income doubles in 16 years. …. This is impressive stuff, for which every recent government deserves some credit.

That’s the conclusion from the post on real GDP per capita growth under different governments. Of course, real GDP per capita is a means to the end, not the end in itself. What we really care more about is the standard of living that higher real GDP per capita entails —that is, it’s the development record, and not just the growth, under different governments that we want to know.

This, however, raises two questions. First, how do we attribute to any particular government the growth and development record when policies under any particular government are likely to have long term consequences? And second, how do we explain the Bangladesh Paradox:

The belief that growth brings development with it—the “Washington consensus”—is often criticised on the basis that some countries have had good growth but little poverty reduction. Bangladesh embodies the inverse of that: it has had disproportionate poverty reduction for its amount of growth.

That quote is from a November 2012 Economist article. That article, and accompanying editorial, had a go at explaining the paradox. Joseph Allchin had a crack more recently at the NY Times. The suspects are usual: garments, remittance, NGOs. But we economists are a parsimonious lot, or so we like to think. We would like to know exactly what contribution each of these factors made, what was the channel through which the factors affected growth and development, what role, if any, did government policy play, and what all that means for future.

I haven’t seen a comprehensive analysis of the Bangladesh Paradox. And no, I am not going to provide the answer in this post. Rather, over the fold is a research agenda on how to analyse the Paradox.

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