Isobel Coleman

Democracy in Development

Coleman maps the intersections between political reform, economic growth, and U.S. policy in the developing world.

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Missing Pieces: India’s Cash Transfers, Goals for 2030, and More

by Isobel Coleman
January 11, 2013

Chief of India's ruling Congress party Sonia Gandhi (R) presents the 210 millionth biometric card to Vali (L), a villager residing in the desert Indian state of Rajasthan, during the national launch of a scheme to make direct cash transfers to the poor, at Dudu town in Rajasthan, India, October 20, 2012 (Vinay Joshi/Courtesy Reuters).


In this edition of Missing Pieces, Charles Landow looks at items on India, Africa, the post-2015 agenda, and economic growth. Enjoy the reading and the weekend.
  • India’s Cash Transfers: The new year brought a new development program in India with revolutionary potential. Under the scheme, Voice of America reports, “245,000 people across 20 districts… are getting pension and scholarship money transferred directly into their bank accounts, instead of having to wait to receive it from post offices or bank officials.” The aim is to eliminate skimming. And the current effort could be just a start. The real test would be using cash transfers to replace India’s massive distribution of subsidized food and fuel. Some analysts enthusiastically support doing so. Others, including Nobel laureate Amartya Sen, caution that food rations tend to benefit families—especially girls—while cash might not. Scaling up cash transfers also requires giving bank accounts and reliable identification to hundreds of millions of Indians, which is no easy task.
  • Goals for 2030: A report from Save the Children UK proposes ten objectives to follow the Millennium Development Goals. “For the first time in history,” it says, “the world is at a point where a number of full-scale breakthroughs are possible.” Six goals deal with “the foundations of human development;” the rest focus on “supportive and sustainable environments.” Under the first heading come calls to end such ills as extreme poverty, hunger, and “preventable child and maternal mortality;” achieve universal healthcare and access to “good-quality education;” protect all children from violence and conflict; and make governance more open and accountable. Goals under the second heading aim to forge “robust global partnerships” for development resources, bolster societies’ disaster resilience, increase environmental sustainability for a growing world, and ensure universal access to energy. CFR’s Development Channel has offered many compelling perspectives on the post-2015 debate.
  • Africa Rising? Although many observers crow about Africa’s rise, says an article on Foreign Policy’s Democracy Lab, the continent’s industrialization is lagging, jeopardizing job creation and broader development. The share of manufactured goods among African exports is falling, the article says. And what manufacturing exists tends to depend on natural resources, “an indication of both [Africa’s] low level of economic diversification and low level of technological sophistication in production.” A rebuttal piece cites India, which “has boomed for 30 years without industrialization,” showing that services-led growth can boost prosperity. It also argues that Africa’s commodity wealth is funding improvements in infrastructure and human capital that will enable industry to grow. The articles agree that industrial policy would help.
  • Middle-Income Trap: Can China and other emerging stars maintain strong growth as they reach middle-income status? A paper from the National Bureau of Economic Research takes a look. It examines historical cases in which fast-growing countries experienced a significant slowdown in average annual growth. Factors such as a relatively high per capita income, high levels of investment, and “undervalued exchange rates” correlate with the chance of a slowdown. Interestingly, transitions toward democracy also seem to make slowdowns more likely in subsequent years, perhaps because democracies allow labor costs to increase. And unsurprisingly, countries with more citizens who complete secondary school or higher can better sustain growth. China, the authors say, exhibits some signs of susceptibility to a slowdown, though the relative technological sophistication of its exports bodes well. Much depends on whether its schools can produce highly skilled graduates.

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