RIVAL ECONOMISTS IN PUBLIC BATTLE OVER CURE FOR INDIA’S POVERTY

Gardiner Harris in the NYT:

India’s inability to pull Kamlesh and hundreds of millions of others out of desperate poverty despite decades of robust economic growth has been one of history’s great governance failures and economic mysteries.
Does India simply need more time for growth to work its magic, or is there something fundamentally wrong with its formula? Do improvements in health and literacy create growth or simply derive from it? And would India’s people have better lives if the government focused on improving workers’ skills or on bettering investors’ opportunities?
Those are some of the questions behind an unusually nasty fight between two of this nation’s greatest economists. It is a fight that has echoes in poor countries across the globe.
The battle between Amartya Sen, a Nobel Prize winner and Harvard professor, and Jagdish Bhagwati, an eminent professor at Columbia University, has broken out just as India’s economy seems to be coming undone. The rupee has plunged to historical lows against the dollar, and extraordinary efforts by the government to stem the slide, including limits on investments abroad by Indian companies, appear to be having little effect. Growth has fallen to 5 percent annually, and Prime Minister Manmohan Singh recently admitted that it was unlikely to snap back soon. Foreign investors are turning away, and the nation’s stock market has recently swooned.
Into this combustible mix came Mr. Sen and Mr. Bhagwati.