Abhijit Banerjee delivers 1st Shaibal Gupta memorial lecture

Nobel laureate Abhijit Vinayak Banerjee on Monday said that sometimes change is purely due to inertia and sometimes due to persistence, emphasising that formal rules matter in bringing about change.

He was delivering the first Shaibal Gupta Memorial Lecture on the topic “under the thumb of history”, organised by the Asian Development Research Institute (ADRI) and the Centre for Economic Survey and Public Finance (CEPPF)

A Ford Foundation International Professor of Economics at the Massachussets Institute of Technology, Banerjee discussed the two leading views of history and political institutions – one, that institutions are mainly products of historical logic and, second, that accidents, leaders, and decisions have a significant impact.

“Shaibal Gupta felt proud of talking about the long history of Bihar. I am also close to Shaibal’s interest. History and culture do have an impact and studies have also shown it. It is the institutional framework that persists such as the persistence of extractive institutions set-up during the colonial period and the impacts of zamindari systems even decades after its abolishment,” he added.

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Maintaining that transition does not just happen and there is no need to get easily pessimistic, Banerjee referred to women’s participation in the panchayati raj institutions and the 73rd amendment bill, which was to ensure 33% quota for women in the legislative assemblies and Lok Sabha.

“You change the rule and the performance changes. Mandated representation of women in PRIs has affected political decisions, short-medium term outcomes and impact. If you look back, a lot has been done, though a lot more needs to done,” he said, adding that beyond policies, even small accidents or natural calamities have long-term impacts.

He concluded by saying that in the end, the choice facing the field of political economy is very simple. “It can embrace grand theories that will offer us the satisfaction of strong and simple answers. We need to be eclectic in choosing indicators in what the political constraints may be and make the best economic analysis and use the best data possible to improve the efficiency of government programs for the welfare of the people,” he added.

Chief secretary Tripurari Sharan invited Banerjee to Bihar for his inputs and cited an example of rabi procurement that how at times the policy designs get thwarted at the ground level by vested interests. Others who spoke on the occasion included Dr Harish Khare, chairperson, ADRI, finance department principal secretary Dr S Siddharth, who is also the CEPPF director and ADRI member secretary Professor PP Ghosh.