Accountability at the core
Behind all success stories of sustained economic development, there is a common factor -- ensuring accountability at all tiers of governance.
This applies across the nature of ruling regimes, whether democratic, authoritarian or a mix of the two.
"And even if democratic institutions are weak, the existence of enough space for civic activism and free media may ensure considerable accountability of a legitimacy-seeking regime," said Prof Wahiduddin Mahmud at a public lecture yesterday.
"This will at least ensure some accountability of a government," he said in his lecture that was organised by Bangladesh Institute of Development Studies (BIDS) in the capital's Lakeshore Hotel.
He said under the erstwhile authoritarian regimes in East Asia, bureaucracies were "technically insulated" from patronage politics and whose policies were subject to performance-based scrutiny in order to ensure accountability.
In China, he said, the governance reforms introduced in the wake of economic liberalisation have put in place a hierarchical system of strict accountability within the communist party's bureaucracy regarding achieving economic targets.
Citing a commentator's view on China, he said, the country aptly brought out the contrast in the structure of performance incentives under democratic and authoritarian regimes -- in democracy, politics is interesting while bureaucracy is boring. In China, the reverse is true.
"Bangladesh at the moment may represent a mix of the two."
Leading economists and policymakers such as the Prime Minister's Economic Affairs Adviser Mashiur Rahman, Centre for Policy Dialogue Chairman Prof Rehman Sobhan, Centre for Urban Studies Chairman Professor Nazrul Islam, Power and Participation Research Centre (PPRC) Executive Chairman Hossain Zillur Rahman, CPD Distinguished Fellows Debapriya Bhattacharya and Prof Mustafizur Rahman were also present at the event, which was moderated by BIDS Director General Binayak Sen.
In his lecture, "Rethinking Economics from a Developing Country Perspective: Some Exploratory Ideas", Wahiduddin pointed out various inadequacies in economic discipline and the contemporary global economic order characterised by instability and unprecedented inequality amidst plenty.
And it is posing a threat to the very sustainability of the global environmental habitat.
He said economics as a discipline is derided, rightly or wrongly, for seeming to lend legitimacy to this market system that lacks compassion and is prey to private corporate interest.
"Students and policymakers are also increasingly becoming frustrated by a visible disconnect between real-life happenings and the economics they study or the economic policy advice they get.
"These concerns have led to a rethinking of economics as a discipline, but much of it has arisen in the context of the Western economies."
His lecture was based on his recent book "Markets, Morals and Development: Rethinking Economics from a Developing Country Perspective".
Wahiduddin said his objective behind the book was to add a developing country's perspective that is largely missing in debates regarding new economic thinking.
He said knowledge in development policy analysis, as in economics and other disciplines generally, originates from rich-country institutions and added that economics textbooks originating from the West are full of examples of US families, firms, labour unions and government activities.
"For the developing country students, this is certainly not the ideal way of relating textbook economics to real life experience," he said, adding that students cannot relate economics to their socio-economic contexts.
He also said the performance of an economy depends, to a large extent, on whether markets work badly or efficiently.
"And the functioning of markets, in turn, is determined not only by the quality of the regulatory framework under 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 amount and using calcium carbide in fruit for early ripening.
In this regard, he said, self-seeking behaviour depends on the socio-cultural settings into which the system is embedded.
Wahiduddin also brought the issue of fairness of the global economic system and added that market transactions between parties with unequal economic power may be regarded as "exploitative".
He said the proponents of globalisation typically argue that poor countries would be poorer without freer trade.
Critics, on the other hand, point out the various biases in the global arrangements, such as under the World Trade Organisation, in favour of richer and more powerful countries.
"The biases are reflected, for example, in the way patent rights are enforced or in selective liberalisation of global markets in which exports from industrialised countries have more to gain, while keeping restrictions on items of interest for less developed countries."
The economist, also a former professor of the economics department at Dhaka University, also spoke about inequality and wealth concentration.
"One of the major sources of discontent with the discipline of economics is that it has not got much to say in its theoretical constructs about justice and fairness in income distribution at a time of unprecedented concentration of wealth in the global economy."
Citing Cambridge Economist Sir Partha Dasgupta, he raised the moral case for income redistribution.
"No country is so poor that it does not have the means to provide for the basic well-being of its entire population," he said citing Partha.
BIDS DG Binayak said it is possible to eliminate extreme poverty if 3-5 percent of the national income can be distributed among the poor.
PPRC's Hossain Zillur Rahman said Bangladesh's economy is growing and it is necessary to know the pathways toward prosperity.
He also questioned the much-talked about word "resilience".
"The poor have been given the task of being resilient without support," he said citing the lockdowns imposed to curb the spread of coronavirus and higher labour for less pay.