Behind all sustainable economic development success stories lies one common factor – ensuring accountability at all levels of governance.
This applies to all ruling regimes, whether democratic, authoritarian or a mixture of both.
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“And even when democratic institutions are weak, having enough space for civic activism and free media can ensure considerable accountability of a legitimacy-seeking regime,” said Prof. Wahiduddin Mahmud at a public lecture yesterday.
“This will at least ensure some government accountability,” he said in his talk organized by the Bangladesh Institute of Development Studies (BIDS) at the capital’s Lakeshore Hotel.
He said that under the once authoritarian regimes in East Asia, bureaucracies were “technically sealed off from patronage policies” and their policies were subject to performance-based scrutiny to ensure accountability.
In China, he said, the government reforms introduced in the wake of economic liberalization have created a hierarchical system of strict accountability within the Communist Party’s bureaucracy for the achievement of economic goals.
Citing the opinion of one commentator on China, the country aptly highlighted the contrast in the structure of performance incentives under democratic and authoritarian regimes – in a democracy, politics is interesting, while bureaucracy is boring. In China, the opposite is the case.
“Bangladesh could be a mixture of both at the moment.”
Leading economists and policy makers such as Prime Minister’s Economic Advisor Mashiur Rahman, Center for Policy Dialogue Chair Prof Debapriya Bhattacharya and Prof Mustafizur Rahman also attended the event, which was moderated by BIDS Director General Binayak Sen.
In his talk, “Rethinking Economics from a Developing Country Perspective: Some Exploratory Ideas,” Wahiduddin highlighted various shortcomings in economic discipline and the current global economic order, which is plagued by instability and unprecedented inequality.
And it poses a threat to the sustainability of the global environmental habitat.
He said economics as a discipline was rightly or wrongly ridiculed for seeming to give legitimacy to this market system that has no compassion and falls victim to private corporate interests.
“Students and policy makers are also becoming increasingly frustrated with a visible gap between real events and the business studies they study or the economic policy advice they receive.
“These concerns have rethought economics as a discipline, but much of it has arisen in the context of Western economies.”
His talk was based on his recently published book “Markets, Morals and Development: Rethinking Economics from a Developing Country Perspective”.
Wahiduddin said his aim behind the book is to add a developing country perspective that is largely absent in debates about new economic thinking.
He said that knowledge in development policy analysis, as in economics and other disciplines in general, comes from institutions in rich countries, adding that western-borne business textbooks are full of examples for US families, companies, and unions Government activities are.
“For students from developing countries, this is certainly not the ideal way to relate textbook economics to real world experience,” he said, adding that students cannot relate economics to its socio-economic context.
He also said that an economy’s performance largely depends on whether markets are functioning poorly or efficiently.
“And the functioning of markets, in turn, is determined not only by the quality of the regulatory framework in which they operate, but also by the socio-cultural institutions in which they are embedded,” he added, citing examples such as mixing water in milk to increase the amount and use of calcium carbide in fruits for early ripening.
In that regard, he said, selfish behavior depends on the socio-cultural attitudes in which the system is embedded.
Wahiduddin also raised the issue of the fairness of the global economic system, adding that market transactions between parties with unequal economic power could be viewed as “exploitative”.
He said globalization advocates typically argue that poor countries would be poorer without free trade.
Critics, on the other hand, point to the various prejudices in global agreements, such as the World Trade Organization, in favor of richer and more powerful countries.
“The distortions are reflected, for example, in the enforcement of patent rights or in the selective liberalization of global markets, in which exports from industrialized countries have more to gain while the restrictions for less developed countries are retained.”
The economist, also a former professor in the economics department of Dhaka University, also spoke about inequality and wealth concentration.
“One of the main sources of dissatisfaction with economics is that it has little to say in its theoretical constructs about equity and fairness in income distribution at a time of unprecedented wealth concentration in the global economy.”
Citing Cambridge economist Sir Partha Dasgupta, he put forward the moral arguments for income redistribution.
“No country is so poor that it does not have the means to provide for the basic welfare of its entire population,” he said, citing Partha.
BIDS DG Binayak said it was possible to eradicate extreme poverty if 3-5 percent of the national income could be distributed among the poor.
PPRC’s Hossain Zillur Rahman said the economy in Bangladesh is growing and it is necessary to know the path to prosperity.
He also questioned the much discussed word “resilience”.
“The job of the poor is to be resilient without support,” he said, citing the lockdowns put in place to contain the spread of the coronavirus and more work for less wages.