Abstract
Ashok Kotwal, who passed away in April 2022, is known to the profession as an eminent development economist. To us and many of the contributors to this volume, he was much more—a friend, philosopher and guide; a raconteur par excellence; a perennial source of inspiration, ideas and joie de vivre. Although an engineer by training, Ashok’s intellectual character was shaped by effervescent debates on politics and society he encountered in his own family. He changed course, obtained a doctorate in economics from Boston University, and became a professor at the University of British Columbia. It is here that his long collaboration with Mukesh Eswaran and others produced some classic papers in development economics. It also brought many of us under his spell as students, colleagues or passers-by.
This issue of the journal is dedicated to the memory of Ashok Kotwal and the mark he has left on the thinking of many. We are grateful to Sahana Roy Chowdhury, the editor-in-chief, for giving us the opportunity to create a small playground for ideas that spring from Ashok’s own contributions to the discipline. We imagine that going through these empathetic essays would have brought him considerable joy, and hope that they will give the reader a glimpse into his unique way of looking at the world.
The opening essay by Debraj Ray builds on two seminal papers that appeared in the early 1980s, dealing with equilibrium unemployment (Shapiro & Stiglitz, 1984) and two-tiered labour markets (Eswaran & Kotwal, 1985a). These papers posit that employers try to prevent moral hazard not by handing out piece-rate contracts but by wielding the stick of dismissal when shirking is detected. The theory relies on workers getting endogenously stratified into jobs that produce different utility levels. By introducing firm heterogeneity into a labour-discipline model characterized by diseconomies of monitoring, Ray draws our attention to new testable implications of these well-known theories of the labour market. Among them: larger firms should offer higher wages and utility; they should also be more capital-intensive. Empirical labour economists should find much food for thought here.
Some of Ashok’s early work shows a fascination with the contractual arrangements in poor, agrarian economies, why they differ from the observed patterns in more advanced countries, and to what extent they can be viewed as both the cause and effect of underdevelopment. Eswaran and Kotwal (1985b) elegantly explain why sharecropping persists in poorer nations despite the distortion created by a marginal tax on the tenant’s effort and inputs (Marshall, 1890). If the tenant and the landlord have a comparative advantage in different aspects of the farming enterprise, sharecropping can be a second-best partnership arrangement. Maitreesh Ghatak and Dilip Mookherjee ask—Can this theory also explain the productivity-boosting impact (Banerjee et al., 2002) of Operation Barga in West Bengal? This was a policy intervention that increased the security of tenure and imposed a legal floor on the tenant’s share of output. The answer is in the affirmative in a world of wealth constraints, though not in a frictionless Coasian setup.
Ashok was a voracious consumer of news about politics and world affairs; he explored the intertwined nature of politics and policy in his own later research (Anderson et al., 2015). The global rise of strongmen and illiberal democracies bothered him deeply from its earliest days. In their contribution to this issue, Chris Bidner and Patrick Francois explore the roots of this drift towards democratic crisis. A megalomaniacal leader may seek to perpetuate his grip on power by bundling populist policies with anti-democratic actions. The policies reinforce the leader’s support among his base but confuse opponents about the true motive behind the continued backing. The result is an escalating cycle of suspicion among supporters and opponents—suspicion that the other side wants to subvert democracy and must be stopped first, by anti-democratic means if possible. The sobering lesson is that democratic backsliding may occur even in a world populated by democrats if that fact is not common knowledge.
Politics matters because justice and equality matter. Ashok’s intellectual pursuits were always driven by a desire to see a reduction in the enormous differences in opportunity and power that still exist between nations, groups and individuals. In her essay, Siwan Anderson surveys the literature on gender disparities in India, a country notorious for its patriarchal norms and ‘missing women’ (Sen, 1992). Stark inequalities notwithstanding, India has also seen a spate of progressive legislation designed to empower women. Staggered implementation of these policies provides us the opportunity to carry out proper impact evaluation, which many studies have exploited. The good news is that policy interventions do seem to move the needle of attitudes and outcomes. The bad news is that they can also increase intra-household conflict and patriarchal backlash, sometimes spilling over into increased violence. A key takeaway is that social context and policy design matter a lot for interventions to be successful.
Absolute poverty was one of Ashok’s lifelong concerns, having grown up in Mumbai where great wealth exists side-by-side with extreme poverty, showing very little sign of trickle-down. Though primarily a theorist, who wrote about the underpinnings of persistent poverty (Eswaran & Kotwal, 1997), Ashok had a scientist’s abiding faith in data as the final arbiter of truth. The essay on poverty measurement by Jean Drèze and Anmol Somanchi builds on a shorter piece that first appeared in Ideas for India, an online portal Ashok founded to promote evidence-based policymaking. Tracking poverty in India has become a difficult task ever since the government decided to withhold data from the 2017–2018 round of the National Sample Survey. Researchers have tried to fill the gap by drawing on the Consumer Pyramid Household Survey, which raises data compatibility issues. Drèze and Somanchi provide a critique of the ‘maximum entropy’ method that has been applied to solve the problem (Roy & van der Weide, 2022). They show that estimated poverty reductions in the last decade are much lower if the necessary corrections are applied.
We hope this little collection of essays gives the reader some sense of the wide range of Ashok’s interests. He marvelled at the baffling quirks that underdeveloped economies often throw up and has contributed much to our understanding of these angularities. But behind his academic curiosities lay a silent passion—the desire to see all human beings reach their full potential. How can we reshape societies to make that happen? Ashok taught us that this is a question whose answer must be doggedly pursued.