Measuring Empowerment: Cross-Disciplinary Perspectives

By Deepa Narayan | Go to book overview

Chapter 17
Democracy and Poverty

Ashutosh Varshney

Two embarrassments mark the record of development since World War II: one pertaining to the market forces, another concerning democracy. In the mid1980s, and especially in the decade of the 1990s, more and more countries embraced the logic of market-oriented economics. The argument for a freer acceptance of market-based economic strategies stemmed partly from the failure of dirigisme, the erstwhile dominant economic strategy, and partly from the assumption that the economic growth generated by market forces would lead to mass well-being and was a surer way of conquering poverty.

One can debate whether poverty has declined or not, and by how many percentage points. Even if one agrees that poverty has indeed come down in the era of globalization—which I happen to believe—the fact remains that global poverty is still extensive. As much as a third of the world, perhaps slightly less, could still be below the $1 a day poverty line set by the World Bank.1 Those who made a fervent case for the embrace of market forces might still say in their defense that the situation would have been better if governments had been more resolute in their embrace of neoliberalism. But it can’t be denied that markets have been much freer in the past 20 years than at any time since World War II (Sachs and Warner 1995). And if a third, or even a fourth, of the world is still below the poverty line, one can only call it an embarrassment for those who thought markets would deliver the masses out of poverty (Stiglitz 2002). Markets may well be necessary for poverty reduction, but they are patently not sufficient, at least in the short to medium run. We need to make them work better for poor people. After the experiences of the 1990s, we need a humble admission of this basic point.

This chapter, however, is not about the “market embarrassment.” It is primarily about the embarrassment of democratic development. What is the nature of this latter embarrassment?

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